Minnesota farms are consolidating and other takeaways from the Census of Agriculture

A look at the Census of Agriculture from the Minnesota Reformer.

Minnesota farms are consolidating and other takeaways from the Census of Agriculture
By Madison McVan

The number of Minnesota farms is shrinking, and surviving farms are getting bigger and bigger, according to Census of Agriculture data released this week. 

The Census of Agriculture is conducted by the U.S. Department of Agriculture every five years, providing detailed data on the country’s farming and livestock industries.

Until Tuesday, the most recent comprehensive data on farms, agricultural goods and farmers was from 2017. Since then, the COVID-19 pandemic disrupted supply chains, massive farm subsidy programs took effect and then ended, and inflation drove up the cost of farm inputs and food.

The release contains data collected in 2022, and provides insight into how Minnesota’s agriculture industry changed since 2017. The data is key in shaping government policy, especially the every-five-years federal farm bill, which funds government nutrition and farm programs.

Here are some key takeaways from the data: 

Farms are consolidating

The Census of Agriculture data show a pair of key long-term trends are continuing: The number of farmers are shrinking while farms are getting bigger.

The number of Minnesota farms decreased from about 68,800 in 2017 to 65,500 in 2022. Over the same period, the average farm size increased from 371 acres to 388 acres.

The number of farms with 2,000 or more acres increased by about 21%.

By getting bigger, farms achieve economies of scale — fixed costs, like tractors and other equipment, are spread out over more acres of product; simply put, the bigger a farm gets, the higher its profit margins.

Dairies are disappearing

Between 2017 and 2022, the number of dairy farms in Minnesota decreased by 40%, continuing a decades-long decline in the state’s dairy industry. 

The Census of Agriculture data includes all farms with dairy cows — so it doesn’t differentiate between a dedicated dairy operation and a crop farmer with a few dairy cattle on the side. Still, the data suggest farmers from both groups are selling off their cattle.

The numbers point to another ongoing trend in agriculture: specialization. Farmers can maximize profits by focusing their labor, equipment and investments on one or two crops; diverse operations, with livestock and various crops, are becoming less and less common.

Farm income hit record highs in 2022; have since dropped 

High prices and good yields for the state’s most popular cash crops — corn and soybeans — drove up farm incomes in 2021 and 2022, and those record profits are reflected in the Census of Agriculture data.

Minnesota farms made more than $28 billion in sales in 2022, compared to $18 billion in 2017.

But farm incomes came back down to earth in 2023, decreasing by about 16% nationwide, according to USDA data.

Farm incomes vary widely based on commodities and local weather patterns, so experts warn against making sweeping industry-wide generalizations.

In Minnesota, corn and soybeans alone account for more than half of farm profits. Livestock, especially hogs, comprise 40% of Minnesota’s farm sales. 

Farms are receiving more government assistance

Fewer farms received government payments in 2022 than in 2017, but the amount of government money flowing to Minnesota farmers increased.

In 2017, the government paid out $394 million to around 41,000 farms.

In 2022, the government distributed $584 million to around 31,600 farms, including disaster assistance for farmers impacted by severe storms in 2022. That averages out to around $18,500 per farm.

Those government payments include federal subsidies, which pay farmers when crop prices dip below certain levels. With high commodity prices in 2022, these accounted for a smaller portion of government payments than in previous years. 

Sugar beets!

One number that held steady was the number of sugar beet farmers in the state — there was only one fewer sugar beet farm in 2022 compared to 2017. 

Sugar beets are a remarkably steady and profitable industry for a couple reasons: Farmers collectively own the processing facilities, and sugar prices are supported by protectionist federal policy, boosting profits for sugar beet farmers. 

Minnesota produces more sugar beets than any other state.

(Read more about Minnesota’s sugar industry here.)

This Minnesota Reformer article is republished online under Creative Commons license CC BY-NC-ND 4.0.   

Photo: Sugar beets grow on a farm in Oslo, Minnesota Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer.

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