NEWS for North Dakotans
Agriculture Communication, North Dakota State
University
7 Morrill Hall, Fargo, ND 58105-5665
March 19, 1998
Average net farm income of Red River Valley farms enrolled in the North Dakota and Minnesota Farm Business Education program plummeted 62 percent last year, according to a new report. Average income for these farms dropped from $97,000 in 1996an exceptionally good year in the southern valleyto $37,000 in 1997.
"Last year more than a quarter of the farms in the program had a negative net farm income," says Andrew Swenson, farm management specialist for the North Dakota State University Extension Service.
Most farms had gross sales between $200,000 and $500,000, and the average net farm income for this group was $27,555. For the roughly one-quarter of farms with gross sales greater than $500,000, average net farm income was about $84,000.
In large part, the low incomes resulted from staggering losses on wheat and barley acres.
Farmers in the study lost, on average, $45 on every wheat acre they plantedand this figure takes into account only actual costs incurred, with nothing subtracted for operator labor, management or equity investment.
Average loss on every acre of barley was $46.
"Though small grain yields and quality were devastating," says Swenson, "high costs of production also played havoc with net income. At current commodity prices, profit will be very difficult to come by in the future unless costs can be contained.
"For instance, on cash-rented land in 1997, 47 bushels of wheat were needed just to break even with costs. For barley, 80 bushels were needed to break even."
Swenson says this study is designed to help Red River Valley farmers make management decisions by providing measures of comparison to other farms in the area. Detailed 1997 costs and returns for each crop enterprise are given. The study also might be useful to educators, bankers and consultants.
The report costs $5 plus handling and shipping, and can be ordered from Farm Business Management, P.O. Box 6022, Bismarck, ND 58506, telephone (701) 328-3162; or from Robert Bollesen, Northland Technical College, Highway 1 East, Thief River Falls, MN 56701, (218) 681-0797.
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Source: Andrew Swenson (701) 231-7379
Editor: Barry Brissman (701) 231-7866
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