Minnesota’s crop farmers posted their best year in decades in 2012, dodging a nationwide drought with a near-perfect combination: a big harvest and high grain prices.
Median incomes surged 50 percent from the previous year, according to an annual report released Thursday by the state’s two big university systems.
The robust agricultural earnings have been a boon for Minnesota’s farm country economy, as farm equipment dealers, fertilizer vendors, seed sellers, and even car dealerships and restaurants share in the gain.
“That money just kind of spreads out like an entire river delta,” said Michael Swanson, an agricultural economist in Minneapolis with Wells Fargo. “When you have revenue, there’s a certain percentage that goes to suppliers. And that’s local. It’s a big win.”
Growers of corn, soybeans and other field crops had a median income of $254,800 last year, up 72 percent from 2011, according to the analysis coproduced by University of Minnesota Extension and Minnesota State Colleges and Universities (MnSCU).
Profits also grew for the state’s livestock farmers despite spiking feed costs — a downside of high grain prices.
Including both crop and livestock growers, Minnesota’s median net farm income in 2012 was $187,200, up from $124,400 a year earlier, the report said.
The universities’ analysis is based on data from 2,310 Minnesota farmers, and it measures income after payment of all operating costs of running a farm.
Corn and soybeans are, respectively, the state’s leading crops, and both benefitted from rising prices. Corn futures prices were about $5 a bushel last spring but shot up to $8 a bushel by August and stayed high into the fall, while farmers came through with their largest corn crop on record.
The state’s soybean production rose 9 percent over 2011, while bean prices also soared.