MN Farming Game

MN’s Agricultural Regions

Arrowhead

Dairy Belt

Corn Belt

Red River Valley

Polk

Stearns

Martin

Renville

Fillmore

MN

Farm

ing

Gam

e

MN Farms with Livestock

Estimated Farms and Size 1984

1972-73MN Farming

Game

Major MN Crops 1973

MN Soybean Acreage 1955-73

1973 Farming Headlines

• 1973 was a record-breaking year!• Corn and soybeans both

experience record harvests• Minnesota’s wheat harvest was

largest since 1899!• Oat production up 15%• Barley harvest up 18%• Sunflower harvest up 9%• The average MN farmer made

$19,337 – a new record

1977-78MN Farming

Game

Departure from Normal Precipitation

1978

Minnesota Crop Yields

Major MN Crops 1977-78

MN Crop Production Changes 1977-78

Corn Production 1978

Soybean Production 1978

1978 Farm Headlines• Farm production costs increase because of

rising oil prices (fuel, fertilizer and chemicals)• Good growing conditions throughout MN!• Record yields for corn!• Above normal yields for soybeans &

sunflowers• Wheat, barley and oat crops down

significantly• Big news was rapid expansion of sunflowers

into MN• Many farmers took advantage of Payment-In-

Kind (PIK) and reduced acreages• Average MN farmer made $15,865!

1983-84MN Farming

Game

1984 Farm Headlines• Farm production costs increase because of

spiking oil prices (Iran-Iraq War)

1984 Farm Headlines

• Excellent growing conditions throughout MN• Soybean crop breaks 1982 production record• Corn production 88% higher than 1983• Record-breaking year for small grains• Wheat & barley yields beat old records by 7

bushels/acre• Barley production exceeds previous record set in

1935

• Farm production costs increase because of spiking oil prices (Iran-Iraq War)

MN Leading Ag Counties 1984

Corn Production 1984

Soybeans Production 1984

Wheat Production 1984

Oats Production 1984

1984 Farm Headlines

• Big farm news in 1984 was low prices

• 1979 Russian grain embargo had created a vast surplus of crops

• Prices received below those of 1972!

• Yet farm production costs up 300% from 1973

• Farm bankruptcies common

• 592 MN farmers lost their farms in 1984

Farm Bankruptcies 1981-84Minnesota, North and South Dakota

175

475 500 525

0

100

200

300

400

500

600

1981 1982 1983 1984

Nu

mb

er

of

Ba

nk

rup

tcie

s

Midwest Farm Bankruptcies 1984

Ohio208

3.9%

North Dakota131

2.5%

South Dakota244

4.6%

Nebraska429

8.1%

Kansas190

3.5%

Missouri382

8.9%

Iowa1,30124.6%

Minnesota692

11.2%Wisconsin

2946.4%

Illinois205

5.6%

Indiana321

8.1%

Michigan85

1.6%

1983-84 Farm Journal

• What crops were most profitable for farmers in your region during this time?

• What was the main reason so few farmers made money during this period?

1987-88MN Farming

Game

1988 Farm Headlines

Crude Oil Prices 1970-2008

1988 Farm Headlines• Farm production costs decline with lower oil

prices• Energy prices down 27% since 1979

Departure from Normal Precipitation

1988

1988 Farm Headlines

• MN faces worst drought since 1934!• Temps reach 110o at Brown’s Valley in late June

• Farm production costs decline with oil prices lower• Energy prices down 27% since 1979

Corn YieldsMinnesota and United States

Soybean YieldsMinnesota and United States

Effects of 1988 MN Drought

1988 Farm Headlines

• Low yields for all crops• Corn and soybeans lowest since 1976• Small grains yields lowest since 1966• Oat crop smallest since 1879!

• Farm production costs decline with oil prices lower• Energy prices down 27% since 1979• MN faces worst drought since 1934!• Temps reach 110o at Brown’s Valley in late June

Corn Production 1988

Soybeans Production 1988

Wheat Production 1988

Barley Production 1988

MN Leading Ag Counties 1988

MN Farm Income

MN Farm Income/Government Payments

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

1982 1983 1984 1985 1986 1987

Total Farm Income

GovernmentPayments

Stability of MN Farm Income

Over 4 Decades

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

0 1 2 3 4 5 6 7 8 9

Year of Decade

1950s

1960s

1970s

1980s

1988 Farm Headlines

• Prices up only slightly• Government payments (PIK) soar!• Average MN farmer made $16,546 in 1988

• Farm production costs decline with oil prices lower

• Energy prices down 27% since 1979• MN faces worst drought since 1934!• Temps reach 110o at Brown’s Valley in late June• Low yields for all crops• Corn and soybeans lowest since 1976• Small grains yields lowest since 1966• Oat crop smallest since 1879!

2007FUTURES CONTRACT

MN Farming Game

March 1, 2007 Futures ContractMN County Agricultural Cooperative

(MNCAC) offers farmers the opportunity to sell their entire crop at

the following prices:

Corn:

$3.16/bu

Soybeans:

$6.75/bu

Sugar Beets:

$47.50/ton

Alfalfa Hay:

$91.00/ton

Barley:

$3.06/bu

Spring Wheat:

$4.79/bu

Oats:

$2.34/bu

2008FUTURES CONTRACT

MN Farming Game

March 1, 2008 Futures ContractMN County Agricultural Cooperative

(MNCAC) offers farmers the opportunity to sell their entire crop at

the following prices:

Corn:

$4.56/bu

Soybeans:

$11.30/bu

Sugar Beets:

$47.20/ton

Alfalfa Hay:

$130.00/ton

Barley:

$3.81/bu

Spring Wheat:

$9.55/bu

Oats:

$3.18/bu

2007-08MN Farming

Game

2008 Farm Headlines

• The drought of 2006-07 ended in August 2007 when heavy rains cause flooding in SE MN

Median Net MN Farm Income

Crop Production Costs

2008 Farm Headlines

• The drought of 2006-07 ended in August when heavy rains cause flooding in SE MN

• Farm production costs skyrocket with rapid increases in oil prices

• Crop prices rise steadily to new records only to have them collapse in July with oil prices and other commodities

• Farmers who sold on futures contracts made out like bandits

MN Farming Game

Summary

MN Farming Cash Receipts 2005

MN Farm Game Conclusions

• Corn = #1• Soybeans = #2• Hogs makes most $

MN Leading Ag Counties 2007

1st 2nd 3rd 4th 5th

All Crops Martin Renville Stearns Blue Earth Kandiyohi

Corn Renville Martin Faribault Redwood Kandiyohi

Soybeans Redwood Polk Faribault Nobles Martin

Wheat Polk Marshall Kittson Norman Clay

Oats Otter Tail Todd Roseau Fillmore Goodhue

Barley Marshall Roseau Polk Pennington Kittson

Sugar Beets Polk Norman Clay Marshall Wilkin

Hay Stearns Otter Tail Winona Morrison Wabasha

Hogs 2002

Number of Hogs

MN Farm Game Conclusions

• Corn, soybeans and hogs concentrated in Corn Belt counties

• Corn = #1• Soybeans = #2• Hogs makes most $

Sugar Beet Production 2002

Total Tons

MN Farm Game Conclusions

• Corn = #1• Soybeans = #2• Hogs makes most $• Corn, soybeans and hogs concentrated in Corn

Belt counties• Small grains (spring wheat, barley and

sunflowers) and sugar beets concentrated in Red River Valley

Dairy Cattle 2002

Number of Dairy Cows

Beef Cattle 2002

Number of Beef Cattle

Chickens 2002

Number of Chickens

MN Farm Game Conclusions

• Corn = #1• Soybeans = #2• Hogs makes most $ • Corn, soybeans and hogs concentrated in Corn

Belt• Small grains (spring wheat, barley and

sunflowers) and sugar beets concentrated in Red River Valley

• Hay, oats, dairy and beef cattle, chickens and turkeys concentrated in Dairy Belt

MN Farm Game Conclusions

• Many factors out of the farmer’s control• Profit depends on weather and market

conditions• Good weather does not guarantee success• Prices highest when product in short supply• Farm income increasingly unpredictable• Markets increasingly influenced by world

events

Average MN Farm Size 1935-2007

0

50,000

100,000

150,000

200,000

250,000

1935

1940

1945

1950

1954

1959

1964

1969

1974

1980

1984

1990

1995

2001

2007

Nu

mb

er o

f F

arm

s

0

50

100

150

200

250

300

350

400

Ave

rag

e F

arm

Siz

e (A

cres

)

Number of Farms

Average Size

MN Farm Size 2002

MN Farm Game Conclusions

• Number of farms declining• Remaining farms getting larger (1972 = 272

acres, 2007 = 347 acres)

Farm Population as a Percent of Total Population

0

10

20

30

40

50

1900 1910 1920 1930 1940 1950 1960 1970 1980

Per

cent

age

US

MN

MN Farm Game Conclusions

• Number of farms declining• Average farm size increasing (1972 = 272 acres,

2007 = 347 acres)

• Fewer people involved in farming

MN County Population Change 2000-2005

MN Farm Game Conclusions

• Number of farms declining• Average farm size increasing (1972 = 272 acres,

2007 = 347 acres)• Fewer people involved in farming• Population decline occurring in many

farming counties

MN Farm Game Conclusions

• Number of farms declining• Average farm size increasing (1972 = 272 acres,

2007 = 347 acres)• Fewer people involved in farming• Population decline occurring in many farming

counties• Many leaving farms for higher paying jobs in

the Twin Cities

2007 MN Farmland Values

Average Price Market Per Acre: Value: