Despite the challenges of COVID-19, Minnesota farms saw improved profitability in 2020, primarily due to higher commodity prices in the third and fourth quarters of 2020.
Median net farm income for Minnesota farms reached $106,969 in 2020, a welcome increase after seven years of low profitability. When adjusted for inflation, 2020 farm profits were above average compared to the historical records tracked by University of Minnesota Extension and the Minnesota State Agricultural Centers of Excellence. Overall, the average Minnesota farm saw improved working capital, positive earned net worth change and improved debt coverage.
Improved commodity prices are expected to continue in 2021. But operating expenses will likely trend up, related to higher energy and increased input prices. As spring nears, many farmers are optimistic for a more “normal” year after the uncertainty and challenges of 2020. But many unknowns remain related to the pandemic and our nation’s economic recovery.
