By Pat Melgares K-State Research and Extension News Service
MANHATTAN, Kan. – Even when times are good, some Kansas farmers lose money. It’s the nature of a business that is often at the mercy of weather, disease, fluctuating markets and more.
But a 10-year analysis by Greg Ibendahl, a farm management economist at Kansas State University, indicates that it’s not the same farms that consistently lose money.
“Things like weather, prices, and marketing decisions influence what happens to net farm income,” Ibendahl said, “and it’s those things that change a farmer’s ability to make a profit.” profit in a given year”.
“Farmers are sometimes good at marketing, and sometimes they’re not. Sometimes it depends on when they pull the trigger (to sell their crops or their livestock). »
Ibendahl studied data available through the Kansas Farm Management Association, an organization that has provided individual services to farmers in the state for more than 80 years. For this particular analysis, he used KFMA data from 2011 to 2020 to look at average net farm income in Kansas, including the number of farms with losses.
“Even in the best years, we always have a cluster of farms with negative net income,” Ibendahl said. “For example, 2020 has been a very good year for farm profitability in Kansas. But we still had 9% of farms that had negative net farm income.
The losses, however, are more pronounced in down years. In 2015, Ibendahl said 40% of Kansas farms surveyed had negative net income.
“So my question was when I looked at our data…is it the same set of farms, because if so, I don’t think they’re going to stay in business,” Ibendahl said. .
It turns out that it’s not the same farms that are losing money year after year.
“We found that if you take the 10-year average of all farms (studied in the KFMA database), only 5.5% of those farms had a 10-year average below zero,” Ibendahl said.
Over the 10 years studied, about two-thirds of Kansas farms lost money for two years or less. “There were really only a handful of farms at that time that had negative net farm income for five years or more. And there could be more factors at play,” Ibendahl said.
The analysis did not take into account an increase in land values over the same period, so Ibendahl says farmers’ losses may not be exactly as the statistics indicate.
Ibendahl’s full analysis, A 10-Year Analysis of Net Farm Income, is available online at the K State Department of Agricultural Economics website (AgManager.info).
More information about the Kansas Farm Management Association and the services available through this organization is also available online.