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May 13, 2004 On Average, 2003 was an Excellent Year for North Dakota Farmers A good barley and wheat crop, strong crop prices and improved livestock profit pushed North Dakota net farm income to its highest level in the past 10 years, according to Andrew Swenson, a farm management specialist with the North Dakota State University Extension Service. Average net farm income for North Dakota farms, outside of the Red River Valley, was $65,700 in 2003. The increase in profit occurred despite higher expenditures, particularly for fertilizer, chemicals, fuel and repairs. The analysis is from 431 farms enrolled in North Dakota’s Farm Business Management Education Program. The average size farm was 2,500 acres, including 780 acres of pasture. The net farm income for 2003 is a strong increase from $44,220 in 2002 and $32,400 in 2001. However, Swenson cautions that not all of the increase was because of profit from raising commodities in 2003. About $14,300 was federal disaster payments for crop losses in 2001 and 2002, but the legislation was not passed until 2003. Net farm income generally increased throughout the state. Profit exploded for some farms in east central North Dakota that experienced possibly once in a lifetime crop yields coupled with strong prices. For example, the average profit of 61 farms in Wells, Foster, Eddy and Griggs counties was $121,100. These farms averaged about 2,400 crop and 480 pasture acres. Profit was more subdued in the western half of the state because of dry weather. The 171 farms in this large area averaged $41,900 net farm income. In 2001, profit was similar for different types of farms but, in 2002 and again in 2003, crop farms were much more profitable than either beef or dairy farms. Actually the profit of both beef and dairy farms increased in 2003, but crop farms recorded historically high net farm income of $102,200. Barley producers enjoyed high yields, quality and prices to garner an average profit of over $50 per acre on cash rented land, not including direct government payments. Confectionery sunflower and pinto bean growers achieved even higher profit. Most other crops such as soybeans, canola, flax, corn, spring wheat and durum were also profitable. The average of farms with profits in the middle 60 percent may be more representative of the typical farm, Swenson says. That’s because a few very high profit farms can greatly influence the average of all farms. In 2003, the average net farm income of farms in the middle 60 percent of profits was $47,700 which is $18,000 less than the average of all farms. The difference between high and low profit farms was the largest that the Farm Business Management Education Program has ever shown. The 20 percent of farms with the highest profit returned $191,200 on average, whereas the 20 percent of farms with the lowest profit lost $7,200 per farm. High profit farms averaged 3,830 acres in size with 3,160 crop acres and low profit farms averaged 1,880 acres with 1,160 crop acres. Net farm income is cash revenue less cash expenses plus adjustments for inventory changes and depreciation. Income taxes and family living expenses are not used in the calculation. Net farm income represents the return to the farm family for labor, management and equity investment used in the farm business. The state farm Business Management summary will be available on the Web at www.ndfarmmanagement.com. It can be ordered from Farm Business Management, P.O. Box 6022, Bismarck, ND 58506 for $6, which includes postage and handling. The telephone number is (701) 328-9640. Regional summaries for western, north central, and south central North Dakota and the Red River Valley of Minnesota and North Dakota are also available. In addition to whole-farm financial information, these books detail costs and returns for livestock and crop enterprises. ### Source: Andrew
Swenson, (701) 231-7379, aswenson@ndsuext.nodak.edu |
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North Dakota State University |
