Reminder: Ethanol is not subsidized

EthanolIf you’re going to criticize ethanol, at least make sure you’re criticizing something about it that actually exists.

A recent piece from The Motley Fool, published on the USA Today’s website, stated that ethanol is “not cost-competitive without government subsidies.” Problem is, ethanol is not subsidized. An ethanol tax credit ended in 2011.

As Media Matters highlights in this piece, The Motley Fool may have confused the Renewable Fuel Standard (RFS) with a subsidy. The RFS sets targets for the amount of ethanol blended into gasoline in order to reduce tailpipe emissions. It does not provide a tax break or any other type of monetary incentive or subsidy.

If The Motley Fool (and USA Today) was truly concerned about government subsidies, it should have written about the billions in subsidies enjoyed by the Oil Industry every year.

Ethanol is not subsidized. Unfortunately, that hasn’t stopped lazy commentators, quack websites and Big Oil from continuing to propagate this myth.

Print Friendly
Share

The sights and sounds of Ag Awareness Day 2015

The Minnesota Corn Growers Association visited with students and faculty during Ag Awareness Day 2015 at the University of Minnesota.

The Minnesota Corn Growers Association visited with students and faculty during Ag Awareness Day 2015 at the University of Minnesota.

A little bad weather wasn’t going to slow down Ag Awareness Day 2015 at the University of Minnesota.

The Minnesota Corn Growers Association (MCGA), together with about 15 other farmer-led organizations and agriculture-related groups, braved temperatures in the 30s, occasional snow showers and high winds to participate in Ag Awareness Day 2015 on the campus of the University of Minnesota on Tuesday.

Students on their way to and from class stopped by the MCGA booth to play a game of corn toss for a chance to win a fuel card from Holiday. They also had the opportunity to view a display highlighting everything produced from a bushel of corn (livestock feed, ethanol, distillers dried grains, corn oil, gluten feed, consumer products, etc.) and learn more about the many ways Minnesota’s corn farmers work to protect our land, water and soil resources.

MCGA answered all types of  questions from students and faculty at the event. Examples included:

  • What’s the difference between the corn eaten by livestock and corn on the cob?
  • Can ethanol run in classic cars?
  • How popular is no-till?
  • Is it better for cows to eat grass instead of corn?
  • Are farmers planting yet?
  • Why is it so cold? (we didn’t have a good answer for this one.)

The MCGA booth was located next to a booth staffed by Dr. Padmanaban Krishnan of South Dakota State University and one of his students. With support from MCGA, Krishnan is using distillers dried grains (DDG) — a high-protein by-product of the ethanol-making process most commonly used as livestock feed — in human foods like cookies, flatbreads and snack foods. You can learn more about Krishnan’s efforts here.

Krishnan game away 800 cookies that had 5 percent of the flour replaced with DDG at Ag Awareness Day. He also explained his research and his process to everyone visiting his booth.

Despite the cold, snow and wind, Ag Awareness Day 2015 was a success. It was a great opportunity to get a positive message about food and farming on an urban college campus. Here are some more photos from the day:

Petting the llamas was a big hit at Ag Awareness 2015.

Petting the llamas was a big hit at Ag Awareness 2015.

ddddddd

Dr. Padmanaban Krishnan of South Dakota State University talks about his DDG cookies at Ag Awareness 2015.

MCGA Agvocate and University of Minnesota Student talking corn farming and ethanol at Ag Awareness 2015.

MCGA Agvocate and University of Minnesota Student Maria Wingert (left) talking corn farming and ethanol at Ag Awareness 2015.

The MN Bison Association wasn't far from MCGA's booth at Ag Awareness 2015.

The MN Bison Association wasn’t far from MCGA’s booth at Ag Awareness 2015.

 

Print Friendly
Share

This week’s ag update from the Minnesota state capitol

Anna Boroff

Anna Boroff, MCGA Public Policy Director.

Written by Anna Boroff
Minnesota Corn Growers Association (MCGA) Policy Director

Avian influenza and buffers remained the most-publicized agriculture issue at the state capitol last week, but as usual, there were plenty of other ag issues farmers should be aware of as well. Here is this week’s legislative update:

Buffers
Not much new to report on Gov. Dayton’s buffer proposal. The governor met with Northfield farmer and MCGA President Bruce Peterson, along with several other leaders from Minnesota’s farm and commodity groups, to discuss his proposal on Friday. We’ll continue to keep everyone updated on the buffer issue here at MinnesotaCornerstone.com.

Nitrogen Fertilizer Management Plan
The Minnesota Department of Agriculture released the final version of its 2015 Nitrogen Fertilizer Management Plan (you can read the whole thing here). It’s important for farmers to understand that the rule making process will last 2-3 years before this plan is implemented.

However, now is the time when farmers should begin to consider how this plan might affect fertilizer management on their farms. Rule making will consist of two parts:

  • Restriction of fall application of nitrogen fertilizer and the application of fertilizer to frozen soils in areas that are vulnerable to groundwater contamination.
  • Defining the regulatory process and options for regulation based on regional and site-specific conditions and considering input from a local advisory team, rules will be applied to an area with elevated nitrate through the use of a Commissioner’s Order as outlined in the Groundwater Protection Act.

As I mentioned earlier, the rule making process will take 2-3 years, but now is the time for farmers to consider if these news rules will affect their farms and plan accordingly. If you have any questions about the plan, I encourage you to contact Dr. Paul Meints, MCGA’s Research Director.

MCGA will closely monitor the rule making process and provide input when necessary.

Property taxes
In the House Republican tax bill, farmers would be refunded half of what landowners pay for school construction bonding projects. This proposal would give landowners some much-needed relief when construction bonding levies are introduced in rural areas without shifting the burden onto other homeowners.

House Environment Bill
One new development to note from the House Environment Bill: An amendment would remove the requirement that farmers applying for an irrigation permit need to do their own inventory of existing wells in the area. Instead, the Department of Natural Resources and Department of Health would do this work since they have most of the information already.

Senate Ag, Environment, Natural Resources & Jobs omnibus bill
Highlights include:

  • $16 million for agricultural productivity research
  • Resources to study the cause of growth or decline of poultry and livestock production in Minnesota
  • $5 million for production-based incentives for renewable chemicals, advanced biofuels and biomass thermal energy (this is part of the Bioeconomy bill. Look for more info on that bill later this week).
  • Additional funds for groundwater monitoring (including analysis to assist in groundwater permitting decisions).
  • Soil and Water Conservation District funding for buffers, erosion control, water retention and other high priority conservation practices.

Federal issues
Last week was a busy one on the federal side. Here are the highlights:

  • Congressional leaders introduced a bill on Trade Promotion Authority (TPA) that allows free trade agreements to be submitted to Congress from the President for a straight up or down vote without any amendments. TPA’s passage would go a long way toward opening new markets for U.S. farmers. To make your voice heard on this issue and encourage TPA’s swift passage, click here.
  • The 2014 Farm Bill requires farmers to file conservation compliance with their local USDA service center by June 1 in order to remain eligible for crop insurance premium support. The final conservation compliance rule was posted to the USDA website last week.
  • On Wednesday of last week, a bill that would require the Environmental Protection Agency (EPA) to come up with a new Waters of the United States (WOTUS) rule passed out of a House committee. Look for a full House vote on the bill before Memorial Day. The Senate also will likely introduce its own WOTUS bill in sometime in the near future, mainly to push back on the currently proposed WOTUS rule that is being evaluated by the Office of Management & Budget and is expected to be released later this spring or summer.
  • As I highlighted last week, EPA agreed to a court-enforced timeline for establishing Renewable Volume Obligations under the Renewable Fuel Standard for 2014 and 2015. Both numbers, along with proposed numbers for 2016, need to be finalized by Nov. 30. Read the full notice here.
  • MCGA signed onto a letter supporting the Pompeo/Butterfield GMO labeling bill. This bill would ensure all food labeling is uniform and based on sound science. It would also help cut through the confusion of the numerous state-driven labeling initiatives out there and develop a national, voluntary food labeling standard for products containing GMOs. More info on the bill can be read here.
Print Friendly
Share

Provider Pals connects farmers with classrooms in the Twin Cities

Provider Pals

Dan Erickson shows students at Centinnial Elementary in Lino Lakes a pail of his “cow salad” concoction during Provider Pal day.

As Dan Erickson started talking about day-to-day life on his corn, soybean and livestock family farm near Alden, Minn., it didn’t take long for hands to start raising.

“How long does it take you to plant corn?”

“Where do the cobs end up after they go through the combine?”

“How do you know when one of your cows is sick?”

“How do you make your money?”

“Where do you take the corn you don’t feed to your cows?”

Those are just a few of the many questions Erickson received Monday while spending the day talking about his farm at Centennial Middle School in Lino Lakes, about 20 miles north of the Twin Cities. Erickson is part of Provider Pals, which brings rural-based “resource providers” like farmers, fisherman and loggers into urban schools to build connections and develop a better understanding of the work they do and the opportunities their professions provide.

Before appearing in-person at Centennial Middle School, Erickson sent students videos from his farm. The videos featured a Q & A with Erickson, as well as a first-hand look at how he and his family operate their farm.

That’s how Centennial students first learned of Erickson’s “cow salad” concoction. “Cow salad” is a mixture of corn silage, alfalfa and distillers dried grains (a high-protein cattle feed that’s a by-product of the ethanol-making process). Erickson’s cows love it, and the Centennial students loved the idea of a “cow salad.”

Erickson even brought an ice-cream pail of “cow salad” to the classroom on Monday.

“The kids thought it smelled a little funny, but it was one way to bring a piece of the farm into the classroom.”

Erickson also had jars filled with soil from his fields, ethanol fuel made from corn, corn oil and distillers dried grains. Also on the table at the front of the classroom were toy tractors, combines and planters to represent the real machinery he uses on his farm every day.

“I even had products like tennis shoes and lipstick to show them all the consumer products that contain corn as an ingredient,” Erickson said.

The use of technology on the farm also served as a bridge to engage students, many of whom had never been on a farm before. Erickson recently installed solar panels to provide power for his entire operation. He also shared pictures and details of how he uses iPads, GPS mapping systems and other technology on his farm.

“You have more technology in today’s tractors than in the first space shuttle,” Erickson said. “It’s amazing.”

Gary Purath grows corn and raises cattle in Red Lake Falls, Minn. Before farming, Purath was an elementary school teacher. The Provider Pals day in Lino Lakes was Purath’s first time back in a classroom in 35 years.

“We have friends out there,” Purath said. “It’s up to farmes to keep working to get the word out. This program is a great opportunity to reach the next generation of consumers and build connections between farmers and non-farmers that can last a lifetime.”

You can listen to Erickson and Purath talk about their Provider Pals experience in the below audio clip.

Print Friendly
Share

Corn farmers spend day at state capitol talking buffers and other ag issues

Day on the Hill

Rep. Pat Garofolo from Farmington meets with Ryan Buck, a farmer near Goodhue and Les Anderson, a farmer near Cannon Falls.

About 15 farmer-leaders from the Minnesota Corn Growers Association (MCGA) spent a day last week at the state capitol meeting with legislators and sharing their point of view on issues and legislation that impacts Minnesota’s 25,000 corn farmers.

Legislative visits are a great way for corn farmers to ensure that issues important to them remain a priority for lawmakers during busy legislative sessions. It’s also another example of MCGA’s grassroots activities.

“Now more than ever before, we need to make sure our voices are heard in St. Paul,” said Bruce Peterson, a farmer in Northfield and MCGA President. “It’s up to corn farmers to stand up and speak out. Nobody is going to do it for us.”

The most prominent issue at the state capitol continues to be Gov. Dayton’s proposal to require 50-foot buffers along Minnesota waterways. In addition to last week’s day at the capitol, MCGA farmer-leaders are attending town hall meetings and using media outlets to highlight why they support the use of buffers where needed, but not the governor’s one-size-fits-all proposal.

But buffers aren’t the only issue high on the radar for corn farmers. They’re also supporting a bioeconomy bill that would support an emerging industry that uses crop residue to make biofuels and other advanced bioproducts.

Corn farmers also support a bill that would provide valuable research funding to the University of Minnesota that would address emerging plant and animal diseases, as well as ag education initiatives.

Other prominent issues include property taxes, MPCA Citizen’s Board reform, irrigation and groundwater permitting and Wetlands Conservation Act changes.

To stay up to date on the latest corn and farm legislative happenings, be sure to read Anna Boroff’s weekly legislative updates.

Print Friendly
Share

This week’s ag update from the Minnesota state capitol

Anna Boroff

Anna Boroff, MCGA Public Policy Director.

Written by Anna Boroff
Minnesota Corn Growers Association (MCGA) Policy Director

Gov. Dayton’s buffer proposal and the bioeconomy bill once again lead this week’s ag update from the Minnesota state capitol. On the federal side, we have a Renewable Fuel Standard update and news on the Waters of the United States legislation.

Before getting to this week’s update, I’d like to thank the farmer-leaders from Minnesota Corn who spent Tuesday at the capitol visiting legislators and meeting with agency leaders. The grassroots action of MCGA farmer-leaders continues to amaze me! Look for a recap of these visits early next week on MinnesotaCornerstone.com.

Also, congrats to Past MCGA President Ryan Buck for being honored with a special House resolution on Tuesday. More details can be read here.

Now, onto this week’s update:

Buffer update
On Tuesday Gov. Dayton included $20 million in his bonding bill for the Minnesota Board of Water and Soil Resources for a state match on USDA’s Conservation Reserve Enhancement Program to purchase permanent conservation easements to try and move his buffer proposal forward. Here is an exact description of the proposal from the governor’s office: “to improve water quality and habitat through a targeted, voluntary approach that leverages CREP dollars to purchase permanent conservation easements and restore land.”

Bonding bills must originate in the House, and as of now, the House GOP says they have no plans for a bonding bill, but haven’t ruled out the possibility. You can read more about the bonding bill, buffers, and the MCGA response in this AP story.

We also watched the Governor deliver his State of the State address, in which he identified his buffer proposal as one of his top three priorities this session. (MCGA’s Dan Erickson was there as a guest of Rep. Peggy Bennett). Here’s a full transcript and video from Dayton’s State of the State address, including his comments on buffers.

Bioeconomy bill
There seems to be many questions regarding the bioeconomy bill, so let me (hopefully) clear up any misconceptions:

  • The bill does not provide subsidies for traditional corn ethanol plants. Our current ethanol industry no longer receives producer payments.
  • The bill does NOT require that any cellulosic project in the state to have a 30 percent perennial requirement. The only cellulosic projects requiring 30 percent perennials are those who want to access funds through the producer payment program.
  • The 30 percent perennial requirement also would not apply to sugar or starch advanced biofuels projects, as well as another class of cellulosic ethanol from corn fiber.
  • Please allow me to editorialize for a minute: By creating new markets, there’s a lot of value in this bill for corn farmers. But the bill’s value goes beyond just corn farmers. As this Star Tribune editorial states, this bill means in-state jobs and increased economic opportunity. Yes, we’ve made some compromises along the way on this bill, but they’re compromises we can live with. This bill has also been a great bridge to find common ground and connect with legislators and environmental groups who often are in opposition to bills we support.

Omnibus ag finance bill
The omnibus ag finance bill had its first day in committee late last week. Here are a few highlights:

  • The Ag committee budget did get some additional funds for the next biennium, but not enough to provide for several of the ag community’s biggest priorities with general fund dollars, including the ag productivity research funding we’ve been working on restoring to the University of Minnesota.
  • In order to provide some level of funding for this important priority, Ag Finance Committee Chair Rod Hamilton had to find money within the current budget to re-direct towards this purpose. The ag productivity funding receives $10 million total, but it comes mostly from the AGRI fund at the Minnesota Department of Agriculture. We would have liked to see this priority funded with general fund dollars, but we appreciate Chair Hamilton recognizing the need for this important research funding and we hope we can continue to work on the bill and funding mechanisms as it moves forward.
  • The bioeconomy bill mentioned above receives $2 million dollars in funding, also from existing AGRI funds. This is an important step forward into making this bill a reality.
  • The bill also includes additional ag education funding, language pertaining to the Agriculture Fertilizer Research and Education Council, and a livestock industry study, among other items.

Because the AGRI fund is so heavily cut and contains many items MCGA sees as important, we continue to watch this bill and have hopes that these funding cuts can be restored and general fund money can be found to fund additional requests. We are still watching for the Senate to release their bills with agriculture funding, and their work will be equally important as we head into conference committee.

The House Ag Finance Committee will continue its markup of the bill on Tuesday evening. The House Environment Committtee will also begin it’s omnibus bill work this week, and released it’s bill on Saturday. It contains many items pertaining to corn farmers, such as the much debated funding of Soil & Water Conservation Districts (SWCD) we’ve seen come up numerous times in the buffer debate (Chair Denny McNamara funds SWCDs to the tune of $1.2 million per year to do cost sharing for buffers, water retention projects, and other high priority conservation practices).

It also includes language on the MPCA Citizen’s Board reforms, irrigation/groundwater permitting, Wetland Conservation Act changes, and also requires that the DNR look at large scale water retention demonstration projects and recommend projects of this nature to the Lessard Sams Outdoor Heritage committee. (There’s more, but perhaps I’ll focus an upcoming column on this bill).

Renewable Fuel Standard
Late Friday afternoon we got word that a proposed consent decree brought against the Environmental Protection Agency (EPA) by the oil industry would establish a schedule that would require EPA to to propose volume requirements for the Renewable Fuel Standard (RFS) volume requirements for 2015 by June 1. By Nov. 30, EPA would have to finalize volume requirements for 2014 and 2015.

Outside of the consent decree, EPA committed to proposing 2016 volume requirements by June 1 and finalized by Nov. 30.

We’re happy to see EPA finally commit to resolving this issue. The constant delays are harmful to the emerging biofuels industry. We will continue working with the National Corn Growers, Congress and EPA to ensure that the final numbers are consistent with the intent of Congress when it passed the RFS to reduce our dependence on foreign oil and provide Americans with homegrown and cleaner choice at the pump.

Waters of the United States
A new Waters of the United States (WOTUS) bill was released last week that, basically, gives federal agencies 30 days to withdraw the currently proposed WOTUS rule and come up with a new one. The new bill will be marked up by the Transportation Committee this week.

Print Friendly
Share

Setting the record straight on converting Minnesota wetlands to crops

MN restored wetland

A restored wetland on a farm in Southern Minnesota.

A recent study from the University of Wisconsin – Madison claims that Minnesota converted more wetlands into farmland than any other state from 2008-12. Unfortunately, many media outlets reported the findings of this study without scrutinizing the study’s methodologies or questioning why it wasn’t peer-reviewed by fellow scientists instead of just an editor or editorial board.

If the UW-Madison study received the scrutiny it deserved, here’s what we would have learned:

  • The study’s authors mainly used data from an outdated U.S. Department of Agriculture (USDA) satellite imaging system last updated in 2006. This type of data has been proven to be inaccurate unless cross-checked with more recent images or on-the-ground analysis, which the study’s authors did not appear to do.
  • Using USDA’s Land Capability Classification (LCC) categories, the study claims converted land was considered “marginal” for farming. Unfortunately, the study’s authors do not appear to understand LCC terminology and its eight classes of land designation. Land classified in the first four classes is considered suitable for cropland. The study’s authors outright changed the definition of classes 3 and 4 by labeling them as having severe to very severe limitations in order to fit their definition of “marginal.”
  • On another note, there are several federal and state laws that prevent farmers from draining, filling and excavating wetlands. For example, Minnesota has had a no net-loss wetlands policy since 1991, meaning any wetlands acres that are lost must be replaced. According to a recent Minnesota Department of Natural Resources study, Minnesota actually gained 2,080 acres of wetlands from 2006-11.
  • The study claims that carbon emissions from the converted land equal a year of emissions from 34 coal-fired power plants. The authors do not share how they arrived at this conclusion and do not address accredited Life Cycle Analysis modeling research (that, unlike the UW-Madison study, has actually been peer-reviewed) that disproves this claim.
  • The study does not address urbanization. Urban land areas grew by 15.7 million acres in the U.S. from 2000-10, dwarfing any estimated expansion of land for farming. Also, farmland can be, and is, rotated in and out of service. Once land is converted to urbanization, it can no longer be farmed or store carbon.
  • Actually, land used principally for farming has decreased from 350 million acres nationwide in the 1980s to 320 million today.

Unfortunately, the UW-Madison “study” appears to be just another example of critics of modern agriculture coming up with a pre-determined set of results, then sitting behind a computer, massaging the numbers and designing a biased study to validate those pre-determined results.

It’s frustrating that farmers seem to always be put in a defensive position on land use and conservation issues. Unaccredited studies like the one out of UW-Madison make wild and unsubstantiated claims, grab all the headlines, then force farmers to refute the claims by using technical information and dry data points that aren’t as conducive to a catchy headline.

Are farmers perfect when it comes to conservation and land use? Of course not. But technology and a reliance on actual science – peer-reviewed and tested on the farm in real-world conditions – have helped farmers come a long way. Today’s farmers grow more food, feed, fiber and fuel on less land than ever before and using fewer inputs like fertilizers and pesticides to do it.

In the future, media outlets need to scrutinize studies like the one released by UW-Madison. Studies filled with bias and inaccuracy do nothing to improve conservation practices, or move farming forward.

Print Friendly
Share

Fellow farmers: Tell your story and meet growing consumer demand for information

Kristie Swenson

Kristie Swenson is a family farmer in Trimont and CommonGround volunteer.

Written by Kristie Swenson

Recently, I had one of the most intimidating experiences of my entire life: I did multiple live media interviews about agriculture.

Along with three other CommonGround volunteer farm women, I traveled to New York City to give TV and radio interviews about agriculture. During one of the interviews, we rattled off the eight GMO crops, and the interviewer was clearly surprised. “Wow,” he said.  “I had no idea there were only eight. It seems like there are many more than that because you hear about it all the time.”

THAT is exactly why it is so important for farmers to be sharing our stories. THAT is exactly why it is so important for farmers to raise our voices and answer questions. And THAT is exactly why it is so important that we, as farmers, become more willing to connect with consumers.

Farmers have an awesome and unique story to tell. How many times have you seen the sun rise in the East, set in the West, and stars fill the night sky – all in the same day? How many times have you planted seeds, waited, and watched for them to break through the ground? How many times have you been one of the VIPs watching (or helping) a mama animal give birth, and then cheering when the newborn gets to its feet for the first time? How many times have your children or grandchildren ridden with you in the tractor and fallen asleep on the buddy seat?

Farmers are blessed with these opportunities. They may seem “normal” or “everyday” to us, but to the average consumer who has never seen an animal being born or ridden in a tractor, these experiences are nothing short of exotic and rare. Farmers are some of the select few who get to see nature’s beauty at her finest hours. We have a deep appreciation for the earth and for the cycle of life. We understand that we need to care for and respect our environment, our soil, and our livestock, because we rely on them for our livelihood.

These are things that can be difficult to understand for the average consumer. The average consumer is bombarded with information and is ill-equipped to sort through it all for a simple, clear, and straightforward answer.

CommonGround

Kristie Swenson, left, recently talked food and farming during a media tour in New York City.

This is where we, as farmers, can answer questions and help clear up the misinformation. Farmers can be – no, farmers should be — the people consumers turn to when they have questions about how food is grown and raised.

What’s stopping us? Too busy? Not interested in that facemail twittergram stuff? Fear?

I can relate to those things. I have two small children, my husband and I farm with my parents, plus I have a full-time job. I’m only on Facebook and LinkedIn, and it is scary for me or my family to be attacked online. But even though speaking up for agriculture can be nerve-wracking, it’s necessary.

I am fiercely proud and honored to have grown up on a farm. I am privileged that my husband and I get to farm the same land that my parents and grandparents farmed. We want our children to have the opportunity to farm. My passion for agriculture and my desire for my children to have the opportunity to farm outweigh the excuses that “I’m too busy”, “I’m not interested in social media”, and “I’m afraid of receiving hateful comments”.

Fellow farmers: Becoming a voice of truth, encouragement, and clarity is critical. Farmers have often responded to consumer demands, and one of those demands now is to simply know more about how food is grown and raised. Most consumers don’t work with it every day; they don’t know what lengths farmers go to raise safe, healthy animals and crops. So let’s meet this demand, answer questions, talk about concerns, and help build understanding in what we do and why we do it.

Will you help me? Will you be a voice for agriculture?


Kristie Swenson is a CommonGround volunteer who farms in Trimont, Minn., and also works as an ag lender. You can follow Kristie on Facebook here.

Print Friendly
Share

Incomes up for livestock farmers in 2014, down for crop farmers

Dale Nordquist

written by Jonathan Eisenthal

Researchers found that net farm income in Minnesota was down drastically for crop farmers, while livestock farmers managed to turn handsome profits in 2014. However, livestock sales in Minnesota this year are not meeting the cost of production, according to Dale Nordquist, Extension economist at the University of Minnesota’s Center for Farm Financial Management.

The Center for Farm Financial Management runs an education program that includes a full analysis of farmer financial records. About 2,200 farmers —approximately 10 percent of the state’s commercial farming operations —take part. These financials are compiled in a database that Nordquist analyzes.

“There’s just been a tremendous amount of income variability in the returns for farmers over the last few years,” Nordquist said. “Volatility is very wild. Farmers have kind of gotten used to that. You never get used to losing money, but they aren’t surprised by it.”

Here is the breakdown of prices received in the database:

  • The average price received for corn sold by participating producers declined from $6.28 per bushel in 2013 to $4.37 in 2014. With costs of production averaging $4.57, the average corn producer lost money on each bushel of corn produced.
  • Sugar beet producers in the Red River Valley and West Central Minnesota did not fare any better. In 2012, the average value of beets was $64 per ton. By 2014, it had fallen to $35 per ton. The average producer lost $230 on beets in 2014.
  • Soybeans sold for $11.67 per bushel, down from $13.59 the previous year.
  • Wheat sold for $6.33 per bushel compared to $7.66 in 2013.

The database shows that Minnesota crop farmers’ median income was $17,003 dollars in 2014, down from $48,120 in 2013 and $260,940 the year before that.

Nordquist explained that in 2012, drought impacted almost the entire Farm Belt, while leaving Minnesota relatively untouched — crop farmers here benefitted from high prices and high yields at the same time in that year.

Nordquist noted that the general public sees income figures for farmers and may think these are comparable to non-farm wages. This is true to the extent that farmers support their families with this income, but they also have to grow the capital that’s in the business in order to ensure long term survival of the farm business.

MN Farm Income“A good rate of return on investments is the standard benchmark (farms should try to achieve),” Nordquist said. “Last year, the rate of return on assets was 4 percent and this year it was under 3 percent. When you compare that to what most of us are earning on our savings accounts it sounds pretty good, but it’s not an outstanding return for a business. Previous to that, in those really good years, we were seeing returns of 15 percent. Those were just exceptional returns  on investments —especially 2010 through 2012.

The years 2007-12 (except for 2009) offered good returns to farm investments in Minnesota, Nordquist reported, while in 2013-14 crop farmers saw both a decline in prices and a drop in yield, a double hit to their return on investment.

“The one thing you can do to combat that high volatility is to have substantial working capital, have a strong balance sheet,” Nordquist said. “That’s what most of our farmers still have. They have used up some working capital in the last year for sure, to try to make ends meet, but they still are in a pretty strong position. Maintaining working capital. Trying to build working capital, that’s a lesson we keep teaching going forward. What that means is you really have to forgo buying that new piece of capital equipment that you might need, or really want, at least. That’s the trade off. Invest in that piece of equipment or hold onto that working capital until the next turnaround.”

On-farm storage facilities are the key to crop farmers’ balance sheets, Nordquist said.

“A big part of the liquidity for farmers is the grain that they have in the bin,” Nordquist said. “That is really where their money is tied up, in working capital. (On farm storage) gives them marketing flexibility for sure. That gives them the ability to price their grain from lots of months before they plant all the way until harvest. You hope you find a price during that period that covers your cost. That’s really a challenge this year, to find a price that’s going to cover your cost. We might be looking at minimizing loss this year, on the crop side.”

In contrast to the challenges faced by crop farmers in 2014, Minnesota livestock farmers saw median income rise in 2014 to $138,037, up from $38,479 in 2013 and $97,669 in 2012.

The study showed this breakdown of livestock prices garnered by Minnesota farmers: The average price received for milk increased from $20.36 per hundred pounds in 2013 to $24.42. With the average cost of production around $20.00, dairy producers netted about $1,200 per cow compared to $300 in 2013. Beef and pork producers experienced much the same results. The price of market weight beef increased from $1.25 per pound in 2013 to $1.51 in 2014. Lean pork prices increased from 89 cents per pound to $1.01.

The coming year does not look as promising for animal ag in Minnesota.

“Milk, pork and beef prices in Minnesota hit all-time highs during 2014,” Nordquist said. “This year, dairy prices are already down below cost of production. We came out with a cost of production of about $20 dollars (per hundred pounds of milk) last year. Futures are down around $17, but I think farmers are getting a little bit more than that. We’re under cost of production also on pork. Those two sides (milk and pork) look like it’s not going to be a great year. Beef prices are still high. So that’s the one positive.”

Poultry is not well represented in the study, but nearly a dozen outbreaks of avian flu are clouding the economic picture for Minnesota’s turkey producers.

You can read the full 2014 Minnesota farm income report here.

Want more insight from Nordquist on the farm income report? We asked Nordquist to discuss the corn aspects of the report in greater depth on the weekly Corn Update segment on the Linder Farm Network. Listen below:

 

Print Friendly
Share

Goodhue County corn and soybean family farmer honored by House Agriculture Finance Committee

Ryan Buck resolution

Goodhue County farmer Ryan Buck receives a standing ovation after being recognized at the House Agriculture Finance committee.

The Agriculture Finance Committee in the Minnesota House of Representatives honored Ryan Buck, a family corn and soybean farmer near Goodhue, for his contributions to agriculture with a special resolution on Tuesday, April 7 at the state capitol.

Buck has been farming for 11 years and is Past President of the Minnesota Corn Growers Association (MCGA). Buck’s family, along with his wife Lauren’s family, have been farming and involved in agriculture for multiple generations.

Even though Buck has been in a wheel chair since 2008 following a snowmobile accident, he’s continued farming and serving as a grower-leader with MCGA. When he’s not farming, Buck sells crop insurance and enjoys spending time outdoors.

“We’re a proud farming family and it was an honor to be recognized by the House Agriculture Finance Committee,” Buck said. “I wasn’t going to let my accident stop me from doing what I love. Farming is in my blood and I take great responsibility in not only growing food, feed, fiber and fuel for the entire world, but also preserving the land we farm for the next generation.”

MCGA President Ryan Buck

Past MCGA President Ryan Buck

Buck received a standing ovation from committee members, fellow farmers and others in attendance at the meeting. The resolution honoring Buck was read by House Agriculture Finance Committee Chair Rod Hamilton (R – Mountain Lake).

“We like to recognize people from all across the state who have inspired or done great things in agriculture,” Hamilton said. “Ryan is someone that’s inspired me. Thanks to proud, responsible family farmers like Ryan, we live better lives with more nutritious food options.”

Buck served as President of MCGA from Oct. 1, 2013 to Sept. 30, 2014 and remains on the MCGA board of directors. As a famer-leader with MCGA, Buck speaks at events to connect with non-farmers, spends time in Washington D.C. and St. Paul visiting with legislators on agriculture issues and helps oversee a farmer-funded research portfolio that focuses on environmental stewardship, finding new uses for corn, biofuels and agronomy.

“It’s important that corn farmers make their voices hear on issues that are important to them,” Buck said. “MCGA helps corn farmers amplify their voices, tell their own story and creating a better future for corn farming and our rural communities.”

Goodhue County farmer Ryan Buck installed this 160-foot diversionin the fall of 2013. It prevents soil runoff over the hillside by collecting water and safely draining it through a six-foot pipe.

Goodhue County farmer Ryan Buck installed this 160-foot diversionin the fall of 2013. It prevents soil runoff over the hillside by collecting water and safely draining it through a six-foot pipe.

Print Friendly
Share