NEWS for North Dakotans
Agriculture Communication, North Dakota State
University
7 Morrill Hall, Fargo, ND 58105-5665
April 9, 1998
Average net farm income of south central North Dakota farms enrolled in the North Dakota Farm Business Management Education Program dropped to $10,194 in 1997, down 78 percent from the previous year.
That's the most dismal performance of all the state's four regions—south central, north central, west and Red River Valley—according to a new analysis of 175 farms located in the southern two-thirds of North Dakota, between the Red River Valley and the Missouri River.
"As is always true," said Andrew Swenson, farm management specialist for the North Dakota State University Extension Service, "some farms did much better than others. However, even the most profitable 20 percent, which averaged $68,102 in net farm income, earned less than half as much as high-profit farms earned the previous year.
"Overall, 1997 did not discriminate between crop and livestock, or small and large farms. All groups did poorly."
Farms in the study averaged 1,846 acres, $222,000 gross cash income, but only slightly over $10,000 in net farm income. The profit margin was the lowest Swenson has seen in the seven years he has been reviewing the education program reports.
"Two sobering statistics," he noted, "are that 38 percent of farms had negative net farm income, and those farms lost an average of nearly $40,000 of equity. Loss of equity makes it more difficult for a farm business to weather future adverse situations, and will have serious ramifications beyond 1997. It is easy to understand why some farmers have opted to exit farming to preserve their remaining equity."
As with other regions of the state, he said, failures of the wheat and barley crops were the principal causes of low profit. Average loss on wheat for the region was $18.50 per acre, average loss on barley nearly $7.
These losses were difficult to overcome, said Swenson, despite the fact that farmers generally made a profit on sunflowers, corn, soybeans and canola.
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Source: Andrew Swenson (701) 231-7379
Editor: Barry Brissman (701) 231-7866
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