Minnesota farm incomes drop dramatically in 2013
Feed factors reduce livestock profits
Livestock farms faced high feed costs for much of the year; feed prices did not decline substantially until harvest. While the price of milk, pork and beef were all up from the previous year, the combination of high feed costs and lower values of feed inventories reduced livestock farm profits. Milk sold for $20.34 per hundredweight compared to $19.63 in 2012. With a cost of production of $19.92, dairy farmers made 42 cents on every hundred pounds produced or about 5 cents per gallon on average. Market hog prices increased from $63 per hundred pounds in 2012 to $66 in 2013. Market beef prices increased from $122 per hundredweight in 2012 to $125 in 2013.
Prospects for livestock producers are better for the coming year. After several years of high feed costs that benefited crop producers, the tables will likely be turned in 2014.
"Prices are projected to be strong for all major livestock sectors this year," Nordquist said. "And feed costs will be much lower so livestock producers should have a very good year."
The one wildcard for pork producers is the spread of porcine epidemic diarrhea virus (PEDV). While the virus is not transferred to humans, it can be devastating to pig herds and cause severe financial consequences.
2014: Tighter margins ahead
Crop producers will see much tighter margins in 2014.
"The good thing is that most crop producers come in to the year with very strong working capital positions," Dvergsten said. "Another plus is that fertilizer prices are down. But other costs, including land rent, are projected to increase. It is likely that many crop producers will have to use some of their working capital to cover losses in the coming year."
The statewide results are compiled by the Center for Farm Financial Management into the FINBIN database which can be queried at www.finbin.umn.edu. 2013 regional reports and reports from previous years can be found on the MnSCU Farm Business Management website at www.fbm.mnscu.edu.
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