Report analyzes financial position of MN farms
Editor’s note: As part of its mission to identify opportunities for farmers while improving quality of life, Minnesota Corn is committed to increasing public understanding of the state’s agriculture economy. The organization does this through targeted public outreach and educational efforts.
A critical component of agriculture is farm finances. For many family farmers, 2024 was a challenging year. The following story summarizes the financial picture for the state’s family farmers. Look for additional information about farm finances on our website in the coming weeks.
For Minnesota farms, 2024 was their least profitable year in decades, and it was a particularly bad year for crop producers, according to a University of Minnesota analysis.
Farms have robust—though declining—levels of working capital to meet short-term obligations, according to the analysis, which was conducted by the Center for Farm Financial Management. (Working capital is considered cash and assets such as grain, inputs, and accounts receivable that can easily be converted to cash without losing their value.) Farms also generally have adequate levels of assets to meet long-term obligations, the analysis found.
Pauline Van Nurden, a University of Minnesota Extension economist and coauthor of the analysis, said the report shows that farms are relatively well positioned to withstand another potentially challenging year in 2025.
But Van Nurden also said she thinks this past winter was a difficult one for many farmers as they sought operating loans and that 2025 will present financial challenges for growers.
Precipitous income drop
Each year, the Center for Farm Management conducts the analysis utilizing data from Minnesota farms enrolled in a farm business management education program. For 2024, the analysis incorporated data from 2,349 operations, including 1,359 crop farms.
The median income for farms in the dataset was $21,964 in 2024, down 51% year over year and at the lowest level since at least 2000. For crop farms, the drop in median income was even more precipitous at 95%—down to just $2,371. For comparison, the median net farm income for crop producers just two years prior was $236,508.
The analysis attributed the dramatic decline in crop farm profitability to lower crop prices, difficulties in grain marketing, and widespread yield issues from a very wet spring and late summer drought. For example, the average corn yield of farms in the database was down 6% year over year, and corn prices received dropped 26%.
The analysis also notes that without payments from the American Relief Act, crop farms would have lost money in 2024. (The analysis counts American Relief Act payments as 2024 income, even though they won’t be received until 2025.)
Livestock farms fared better, given that commodity prices rose and costs, especially feed costs, declined, according to the analysis. The median net dairy farm income rose over 300% to $126,897, according to the analysis, and the median net hog operation income increased to $101,079 in 2024. (The median hog operation lost $33,041 in 2023.)
For beef operations, the median net farm income fell from $46,172 in 2023 to $29,282 in 2024.
In total, the median farm in the dataset finished the year with over $383,000 in working capital, down 16% from 2023. Still, given median gross revenue, and median operating expenses, that was considered a strong amount of working capital, according to the analysis.
Meanwhile, the median net worth of farms in the dataset was nearly $2.9 million, up $150,000 from 2023. That was considered adequate, according to the analysis, given levels of debt and median equity in an operation.
Family living expenses benchmarked
The analysis also benchmarks family expenses for farm operations in the dataset. For 2024, it included expenses from 364 operations, with the average farm family spending $74,078 on living expenses, including over $11,400 on food and meals and $10,200 on medical care and health insurance. The average farm also spent $25,791 on income and social security taxes, and $13,763 on non-farm real estate, household items, and personal vehicles.
In total, a farm needed over $113,000 to cover family consumption and taxes, the analysis found. Farms partially offset these costs with nonfarm income—the median nonfarm income among the 364 operations was $47,992. But for the median crop farm, working capital was likely required to cover tens of thousands of dollars in family expenses.
About the Center for Farm Financial Management
Operated out of the University of Minnesota’s Department of Applied Economics, the Center for Farm Financial Management develops applications and educational programs that provide educators, lenders, and farmers resources to manage their operations. That includes FINPACK, the center’s flagship software product.
The center maintains a database of aggregate farm finances drawn from farm business management programs throughout the country that use FINPACK. The database is known as FINBIN.
Learn more about FINBIN here.
