Farms.com Home   News

Farm Income Losses Vary Year to Year

Farm Income Losses Vary Year to Year

By Pat Melgares

Even when times are good, some Kansas farmers are losing money. It’s the nature of a business that is often at the mercy of weather, disease, fluctuating markets and more.

But a 10-year analysis by Kansas State University farm management economist Greg Ibendahl indicates that it is not the same set of farms that are losing money regularly.

“Things like weather and pricing and marketing decisions have an influence on what happens to net farm income,” Ibendahl said, “and those are the things that change a farmers’ ability to earn a profit in any given year.”

“Farmers are sometimes good at marketing, and sometimes they’re not. Sometimes it depends on when they pull the trigger (on selling their crops or livestock).”

Ibendahl studied data available through the Kansas Farm Management Association, an organization that has provided individual service to the state’s farmers for more than 80 years.

For this particular analysis, he used KFMA data from 2011 to 2020 to look at the average net farm income in Kansas, including the number of farms that experienced losses.

“Even in the very best years, we always have a group of farms with negative net income,” Ibendahl said. “For example, 2020 was a really good year for farm profitability in Kansas. But we still had 9% of farms that had negative net farm income.”

The losses, however, are more pronounced in down years. In 2015, Ibendahl said 40% of Kansas farms studied had negative net income.

“So my question was when I looked at our data… is this the same set of farms, because if it is, I don’t think they’re going to stay in business,” Ibendahl said.

Turns out, it was not the same farms losing money year after year.

“We found out that if you take the 10 year average of all farms (studied in the KFMA database), only 5.5% of those farms had a 10 year average below zero,” Ibendahl said.

During the 10 years studied, roughly two-thirds of Kansas farms lost money two or fewer years. “There’s really only a handful of farms during that time that had negative net farm income for five years or more. And there could be more factors at play,” Ibendahl said.

The analysis did not take into account an increase in land values over the same period, so Ibendahl says farmers’ losses may not be exactly as the statistics indicate.

Source : k-state.edu

Trending Video

U.S.-China Trade “Truce” + U.S. Fed Cuts Rates Again

Video: U.S.-China Trade “Truce” + U.S. Fed Cuts Rates Again


The market was hoping for a US-China trade deal, but we got a trade “truce” for now from the keenly awaited Trump-Xi meeting at the APEC Summit.
China commits to minimum purchase commitments of 12 MMT of U.S. soybeans during the “current season” and a minimum of 25 MMT annually through 2028.
U.S. Treasury Sec Bessent said other Asian countries have agreed to buy additional 19 MMT of US soybean.
Soybean futures trading above $11 now- they normally tend to rally to $12.
As expected, US Fed cuts interest rates by -0.25% again in October to 3.75%–4.00%. No further cuts promised for this year but trade looking out to the Dec FOMC.
The Bank of Canada cut interest rates to 2.25% but raised concern over trade war damage.
Soy meal futures, remarkably, have had 14 consecutive higher close sessions. A bull market in soybeans is a bull market in soy meal!
Cattle futures lower as funds unwind out of cattle for now due to Trump headlines and objective to lower beef prices.
All major stock indices climb to new record highs. It was Mag 7 reporting week, which had mixed results. But we now have the first $5 trillion company in Nvidia!