Kansas net farm income continued to slide in 2013
Kansas farmers took a one-two punch with drought and lower grain prices in 2013 and the result was a drop in average net income to its lowest level since 2009, according to data from the Kansas Farm Management Association’s annual PROFITLINK Analysis.
Net income across 1,194 KFMA-member farms averaged $135,429 in 2013, down from $159,352 in 2012 and $166,375 in 2011. The figure is also below the five-year average of $145,096.
The biggest drop was primarily in western Kansas, which experienced the worst of the state’s drought conditions, said Gregg Ibendahl, Kansas State University associate professor of agricultural economics. However, the major grain-producing areas of the country did not experience drought and as a result U.S. grain production was good and this pushed down prices.
Not all Kansas farmers are members of the KFMA, but the annual report provides a glimpse of financial conditions for producers across the state, especially when comparing one year to the next.
The data showed that about 23 percent of the farms had net income of $200,000 or higher, while 42 percent had income of $50,000 to $200,000. Twenty-nine percent had net farm income of $0 to $50,000 and almost 14 percent operated at a loss.
“A big chunk of our farms are making $0 to $55,000 a year. Most people are not getting rich,” Ibendahl said. “Even in the best years, the majority of farms make under $100,000.”
A tale of six regions
“Northwest Kansas fared the worst, partly because of the drought, but also because grain prices went down so much,” Ibendahl said. “All of a sudden the value of the grain inventory was down. Because the study considers net income on an accrual basis, the lower inventory was reflected in lower farm income.”
The average price of U.S. corn in 2013 was $4.50 a bushel, down from $6.89 in 2012, according to the U.S. Department of Agriculture. The average price of soybeans last year was $12.70 per bushel, down from $14.40 a bushel in 2012.
Net farm income numbers varied widely by regions across the state, with northwest Kansas averaging $35,791, southwest at $71,633 and southeast at $161,776. Income in north central Kansas averaged $136,045; south central at $151,303; and northeast at $154,867.
Dryland net farm income across 855 farms was $156,991, down from $169,061 a year earlier and about the same as $157,296 two years earlier.
Net income for the 59 farms that irrigate crops averaged $118,974, well below $347,315 in 2012 and $449,115 in 2011.