Income drought for Minn. farmers

If you want to benefit from lower farm incomes, stick to basic foods.

The University of Minnesota Extension and Minnesota State Colleges and Universities revealed the results of an annual joint study Thursday, which found that the median income of Minnesota farms dropped 63 percent from $91,242 in the bumper year of 2008 to $33,417 in 2009. As applied economics professor Kent Olson noted, âÄúThis report is more news for us than them [farmers].âÄù Contributing to the decline were increased seed and fertilizer prices âÄî in large part due to the demand for biofuels, a plunge in the price of farm inventories and lower demand for beef, milk and pork. Dale Nordquist, associate director for the University Center for Farm Financial Management, worked on the joint study. âÄúA lot is due to the general economy,âÄù Nordquist said. Olson said that âÄúcrop producers didnâÄôt exactly have a bad year; they had an âÄòalmost back to normalâÄô income level.âÄù So despite consumer malaise and a subsequent drop in the demand for many farm products, why have grocery prices, save milk, remained so high? âÄúHave they?âÄù Brian Buhr, head of CFFM asked in response. âÄúPorkâÄôs darn near free.âÄù Buhr explained that it depends on which foods one purchases. âÄúYou can triple the price of wheat and hardly affect the price of Wheaties.âÄù Processed foods experience a lot of value adding before they hit the shelves. Supermarket food inflation was .5 percent in 2009, the lowest itâÄôs been since 1967, according to the USDA. If you want to benefit from lower farm incomes and what youâÄôd expect to be cheaper food, buy lower on the supply chain. That means fresh fruits, vegetables and, especially in this case, meat and dairy.