Minnesota farmers face challenges as farm incomes continue to decline

Minnesota farmers are bracing themselves while planning for the 2025 crop year after experiencing declining net farm incomes in 2024. 

According to new data from the University of Minnesota and Minnesota State, the median net farm income for Minnesota farms statewide dropped to $21,964 in 2024 — the lowest level this century. Farm incomes have dropped significantly since 2022, leaving many farmers in a challenging financial position. 

“We saw not only challenged prices, but also challenged yields given a very wet planting season and then just the challenges that then developed during the year with some drier conditions towards the end of the year,” said Pauline Van Nurden, economist at the University of Minnesota Extension’s Center for Farm Financial Management.

Van Nurden said the hope is that crops can get planted on time this spring, without abnormally high rainfall or floods keeping farmers from planting.

“Hopefully we’ll see a more normal spring where crops can get planted in a timely fashion,” she said. “There certainly is uncertainty out there, and there’s just a lot of factors at play that feed into that. I think farmers are pushing the pencil to their own personal numbers and trying to make the right decisions for their farming operation.”

Crop producers experienced some of the most financial difficulties in 2024, according to the report. The median net farm income for crop producers was nearly at zero dollars. They lost about 25 percent of working capital last year and dipped into cash reserves to make loan payments.

Cash crop sale prices reduced 20 percent or more for major crops in Minnesota. The outlook for 2025 doesn’t look much better, with many producers facing negative margins and challenges in securing yearly financing. 

Livestock, dairy and beef producers had a better financial year, though. Livestock producers saw improved profitability across all types of livestock operations in the state due to lower feed costs and higher livestock commodity pricing.

Dairy and beef producers also experienced improved profitability. Diversified farms fared better financially than specialized crop farms in 2024. 

The latest U.S. Department of Agriculture Farm Income Forecast predicts an increase in net cash farm income for this year, and relief is expected from supplemental and ad hoc disaster relief government program assistance. Despite this, farm profitability in 2025 in Minnesota is still uncertain with tariffs, high interest rates and general economic conditions.

Van Nurden said many growers and producers are preparing for the cyclical nature of profitability on their farming operations and are navigating the agricultural landscape the best they can, though the stress isn’t easy on them. She adds it’s important that there are options available and that it’s not all “doom and gloom.”

“I always like to remind people of some of the options and some things that growers and farmers can do to manage through situations like this,” she said. “So digging into the cost of production for their specific farming operation, the crops, the livestock they’re growing, looking at opportunities to trim expenses just even a little bit can make a difference. Taking advantage of marketing opportunities, and just having a plan, and monitoring that plan throughout the year, and then just adjusting as needed.”

The report includes data representing about 13 percent of the state’s farms with gross incomes over $250,000 annually, with 2,198 participants in the Minnesota State Farm Business Management programs and 115 members of the Southwest Farm Business Management Association. 

Farmers who are struggling with stress, anxiety and depression are also encouraged to contact the Minnesota Agricultural Mental Health Specialists who offer free mental health services. The Minnesota Farm & Rural Helpline provides free, confidential counseling 24/7 at (833) 600-2670 or by texting FARMSTRESS to 898211.