US meat producers' income plunges 63% in 2009

Farm income in Minnesota dropped a whopping 63% in 2009 - one of the largest declines in recent history - with pork, beef and dairy producers getting hammered particularly hard, according to a report.

Farmers were hurt by the lacklustre economy. Demand was relatively weak, but supply continued unabated, pushing prices down.

The decline has put some farmers out of business, particularly hog farmers, which have been operating with steep losses. In Minnesota last year, the median hog producer lost US$73,525 in 2009, compared with earning US$4,876 the previous year, the report said.

With some producers out of business, and others cutting production, supply levels are now more in sync with demand. Plus, pork exports have picked up, which have also helped buoy prices, said Dave Preisler, executive director of the Minnesota Pork Producers Association.

Preisler noted that hog prices started rising slowly in January and February and have moved up considerably in the last couple of weeks.

Median net farm income - money left over to pay for living expenses, taxes, retirement contributions and business reinvestment - was US$33,417, down from US$91,242 in 2008, according to a joint study of 3,000 farms by the Minnesota State Colleges and Universities system and University of Minnesota Extension.

The average farmer earned a 3.1% rate of return on assets, down from 10.8% in 2008, and the lowest in 17 years in which data has been collected, the report said.

On a brighter note, 2010 is shaping up as a better year for meat and dairy producers. Milk prices are up, and Nordquist said he thinks "the bleeding has stopped" for dairy farmers.