Farms are becoming more scarce, and the money is drying up like a field in a drought.
That’s the latest snapshot of farming in the United States, according to the 2017 Census of Agriculture, released April 11 by the USDA and the National Agriculture Statistics Service.
“Both the farm numbers and farm incomes dropping are related to the low prices we have seen in agriculture,” said Gary Wertish, president of the Minnesota Farmers Union. “We have been in an extended period of low prices for over six years now and with the high cost of inputs and the large amount of capital required in a farming operation this has led to not only a loss of income, but also a loss of farms.”
The census, taken every five years, is data gathered in 2017.
Nationally, the number of farms has dropped from 2,109,303 in 2012 — a 4.33 percent drop from 2007 — to 2,042,220 in 2017, another 3.18 percent decrease. Based on acreage, only farms from 1 to 10 acres and farms larger than 2,000 acres increased in numbers.
That change in the number of farms, a drop of 67,083 farms over the last five-year census period, saw a corresponding drop in number of acres operated, from 914.5 million acres to 900.2 million acres, a 1.56 percent decrease.
Those trends are essentially followed in both Iowa and Minnesota.
The census shows a drop of 2,533 (2.86 percent decrease) all farms in Iowa from 88,637 in 2012, with increases only in the very small farms, 1 to 10 acres and the very large, more than 2,000 acres. However, Iowa also saw a small increase in the number of farms from 180-499 acres.
In Minnesota, the decrease in farms was even greater, with a decrease from 2012’s 74,542 farms to 68,822 in 2017. That drop of 5,720 farms is a 7.67 percent decline.
Meanwhile, Minnesota saw more than half a million fewer acres in operation, a 1.99 percent decrease. Iowa’s acreage loss was less pronounced, with a 58,853 drop in acres operated, a 0.19 percent decrease in farmland from 2012 to 2017.
Income from farm operations
Most damaging to farmers is the change in net income on the farms.
Overall, Minnesota’s net income dropped in 2017 to $4.525 billion from a high-water mark of $7.032 billion reported in 2012. When measured per farm, that amounts to a drop of $28,592 from 2012 to 2017, when net income per farm in Minnesota was reported at $65,753 per operation.
Iowa’s net income saw a less pronounced drop, from $9.779 billion in 2012 to $7.480 billion in 2017. Net income per operation fell from $110,329 to $86,878, a difference of $23,451, but only a 21.3 percent decline vs. a 30.3 percent drop for Minnesota farmers.
The most positive thing for the farmers would be to receive a fair price for their labor and investment, Wertish said. Unfortunately, the census shows 56 percent of U.S. farmers had negative income in 2017.
Wertish pointed to a few positives from the census, including a higher number of women producers and more information about direct-market and value-added farm practices.
Impacting that net income were several expenses that rose across the region.
Labor rose as a percentage of operating expenses in Minnesota from 4.5 percent in 2012 to 5.5 percent in 2017, and overall labor costs in the state jumped $139.6 million, an increase of 20.2 percent. Ag services and utilities increased 31.5 million, an overall increase of 11.5 percent and a 0.2 increase as a percentage of overall operating expenses.
Not every price went up in Minnesota. Supplies and repairs (excluding lubricants) saw a slight decrease from $964.2 million to $889.5 million, a drop of 7.75 percent in total dollars spent and a 0.3 percent decrease to the overall percentage of operating expenses.
The amount spent on feed also fell, from $2.961 billion to $2.668 billion. As a percentage of operating expenses, that represented a 1.5 percent decrease in inputs.
“All sectors have been hurt some,,” Wertish said, “with dairy suffering the worst and continuing to this day with the dairy farmer receiving a price that is below their cost of production.”