Minnesota farms saw improved profitability in 2020, despite the challenges created by COVID-19.
Increased profitability for all major farm types in Minnesota are attributed to:
- Favorable growing conditions
- Increased commodity prices
- Government payments
These improved financial measures speak to the stark improvement in Minnesota farm financial footing during the past year.
Median net farm income for Minnesota farms reached $106,969 in 2020. The increase was welcome after seven years of low profitability.
Working capital drastically improved with an average farm increase of $115,419 in 2020.
Term debt coverage was also much improved year over year. The average Minnesota farm had a term debt coverage ratio of 2.73:1 in 2020.
The average farm’s net worth increased by about $192,000, with an average rate of return on assets of 7.8% for the year. These improved financial measures speak to the stark improvement in Minnesota farm financial footing during the past year.
Government payments played a crucial support role in 2020 for MN farms. Total government payments were up 123% in 2020. The average farm received $114,335 of government program support in 2020. This increase is attributed to several USDA programs including disasters experienced in the 2018 and 2019 crop years, trade related programs, as well as low market prices and other challenges related to COVID-19 during the year.
View the 2020 FINBIN Report on Minnesota Farm Finances to learn more details about the financial health of the state’s agriculture industry. Query FINBIN directly to see reports specific to an area or type of agriculture at http://www.finbin.umn.edu/.
