Farm Income Levels Remained Strong in 2022

May 29, 2023




The University of Minnesota recently reported that the average net farm income for Southern Minnesota farmers in 2022 was $311,240, which was the highest average net farm income on record, surpassing the 2021 level of  $280,900. The very positive net farm income levels from 2020-2022 followed seven years (2013-2019) in a row of sup-par net farm income levels in the region. The 2021 and 2022 net farm income levels in Southern and West Central Minnesota have been enhanced by robust crop profits that resulted from average to above average crop yields and the highest grain market prices since 2012. Livestock profit margins in 2022 in Southern Minnesota were mixed and typical livestock profit levels were at much more modest levels than the crop profits.

The Farm Business Management (FBM) Summary for Southern and West Central Minnesota is prepared by the Farm Business Management Instructors. This summary includes an analysis of the farm business records from farm businesses of all types and sizes in Southern and Western Minnesota. This annual farm business summary is probably one of the “best gauges” of the profitability and financial health of farm businesses in the region on an annual basis. Following are some of the key points from the data in the 2022 FBM Summary:


  • The “Net Farm Income” is the return to labor and management, after crop and livestock inventory adjustments, capital adjustments, depreciation, etc. have been accounted for. This is the amount that remains for family living, non-farm capital purchases, income tax payments, and for principal payments on farm real estate and term loans. The average net farm income in 2022 was +$311,240.
  • The “median” net farm income is the midpoint net farm income of all farm operations included in the FBM Summary, meaning that half of the farms have a higher net farm income and half have a lower net income. The average median net farm income in 2022 was +$177,614.
  • A total of 1,476 farms from throughout South Central, Southwest, Southeast, and West Central Minnesota were included in the 2022 FBM Summary. The average farm size was 683 acres. The top 20 percent net income farms averaged 1,667 acres, while the bottom 20 percent net income farms had 205 acres.
  • 63 percent of the farm operations were cash crop farms, 12 percent were single entity livestock operations, and the balance are various combinations of crop, livestock, and other enterprises.
  • 352 farms (24%) were under $250,000 in gross farm sales in 2022; 274 farms (18%) were between $250,000 and $500,000 in gross sales; 361 farms (25%) were between $500,000 and $1 million in gross sales; and 489 farms (33%) were above $1 million in gross sales.
  • In 2022, the average farm business received $14,606 in government program payments, which includes CRP and conservation payments. This was down considerably from 2021 when the average was $58,196 in government payments which included many one-time payments related to the Covid pandemic and 2019 crop disaster payments. In addition, the average farm operation received $7,792 in crop insurance payments in 2022, which was considerably lower than the level of crop insurance payments from 20182020. The combination of farm program payments and crop insurance payments accounted for approximately 4.7 percent of the 2022 average net farm income. This compares to 2020, when government payments and crop insurance payments totaled over $126,000 and made up about 74 percent of the average net farm income.
  • The average family living expense in 2022 was $71,375, which increased slightly compared to recent years. The average non-farm income in 2022 was $45,240, which represents about 38 percent of total annual non-farm expenses ($121,163) by families for family living and other uses.
  • In 2022, the average farm business spent $1,281,210 for farm business operating expenses, capital purchases, and non-farm expenses. Most of these dollars were spent in local communities across the region, helping support the area’s overall economy.


(Note — Please refer to the attached Table for a 5-year (2018-2022) comparison of various average farmrelated financial data, as well as average crop and livestock data.

  • The average net farm income for Southern and West Central Minnesota for 2022 was $311,240, while the median net farm income for the region was $177,614. This compares to median net farm income levels of $176,426 in 2021, $102,848 in 2020, $36,547 in 2019, and $20,655 in 2018.
  • As usual, there was large variation in median farm income in 2022, with top 20 percent profitability farms averaging a median net farm income of +$728,237, and the low 20 percent profitability farms with an average median net farm income of only +$13,238.
  • The variation in 2022 median net farm income also tracked very closely with the gross farm receipts of farms. Farms with $1 to $2 million in gross receipts had a median net farm income of +$433,787, compared to +$224,828 for farms with a gross of $500,000 to $1 million, +$125,428 for farms with a gross of $250,000 to $500,000, and +$56,528 for farms with a gross of $100,00 to $250,000. Interestingly, there was very little difference in the profit margin between the income groups. The $100,000 to $250,000 group was at 25.1% profit margin, the $250,000 to $500,000 group at 28.4% profit margin, the $500,000 to $1 million group at 27.4% profit margin, and the $1 to $2 million group at 27.6% profit margin.
  • The average farm business showed working capital of +$601,008 in 2022, which is three times higher than the average working capital three years ago in 2019. The current ratio (current assets divided by current expenses) for 2022 was 283%, which compares to 247% in 2022, 198% in 2020, and 156% in 2019. The working capital to gross revenue ratio for 2022 was 49.4%, which is more than double the level in 2018 and 2019. The working capital had declined to concerning levels for many farm operations prior to 2020, before showing significant improvement from 2020-2022.
  • Another measure of the “financial health” of a farm operation is the “term debt coverage ratio”, which measures the ability of farm operations to generate adequate net farm income to cover the principal and interest payments on existing real estate and term loans. If that ratio falls below 100%, it results in the farm business being required to use working capital or non-farm income sources to cover the difference. The average term debt coverage ratio for 2022 was at the healthy level of 372%, which compares to average ratios 389% in 2021, 274% in 2020, 148% in 2019, and 91% in 2018. However, the low 20 percent profitability farms had a term debt coverage ratio of only 85% in 2022.
  • Any additional cash flow dollars over and above the term debt principal and interest payments that are earned by farm operation are available for machinery replacement or other capital improvements. In 2022, the average farm had $224,856 available for those purposes, while high 20 percent profitability farms had $726,122 available. This helps explain the strong demand for new and used farm machinery, the many plans for grain system improvements, and other farm and non-farm upgrades that have occurred in recent months.


Overall, net returns from crop operations in 2022 were among the best ever; however, livestock profitability was much more modest. As usual, there was a wide variation in farm profit levels from the top one-third of net farm income operations as compared to other farms. The overall average financial health of many farm businesses has improved significantly during the period from 2020-2022, after declining for several years due to low profit levels. Farm profit levels were quite favorable in 2022; however, there are some “caution flags” on the horizon. These include rapidly increasing input expenses and land costs, potential declines in grain and livestock market prices, and lower levels of government payments. Complete farm business management results are available through the

University of Minnesota Center for Farm Management FINBIN Program at:



 (Data from the 2022 Southern Minnesota Farm Business Management Annual Report)


Farm Income Data                        __2018__       __2019__       __2020__       __2021__       __2022__

Gross Farm Sales                           $759,254        $771,105       $830,344        $967,436      $1,077,094


Total Farm Cash Expense             $675,400        $675,013       $700,336        $790,104       $884,679


Average Net Farm Income            $ 32,866         $ 78,167        $175,216        $280,900       $311,240


Median Net Farm Income             $ 20,655          $ 36,547       $102,848        $176,426       $177,614


Top 20% Med. Net Farm Inc.      $158,785         $242,696       $401,000        $620,578       $728,237        


Low 20% Med. Net Farm Inc.    ($ 79,757)       ($ 43,183)        $ 369             $ 12,706        $ 13,238


Financial Ratios (Ave.)

Operating Profit Margin                 3.2 %            10.1%            20.6%             27.5%          26.2%

Current Ratio                                   151%             156%             198%              247%           283%

Working Cap./Gross Inc. Ratio     23.2%            23.8%            32.6%             41.3%          49.4%

Farm Debt/Asset Ratio                     49 %              46 %               44%                44%             43%

Term Debt Coverage Ratio              91 %             148%             274%              389%           372%


Crop Data — Corn (Cash Rent Land) 

   Yield/Acre                                       179                 183                 206                   203               213

   Price/Bushel                                  $3.48              $3.75              $4.04                $5.36            $6.29

   Gross Revenue/Acre                   $674.25          $789.72         $896.62            $1,107.53     $1,347.06 

   Direct & Overhead. Costs/A.     $731.51          $745.92         $735.65              $791.94       $967.91

   Cost/Bushel Produced                  $4.08              $4.08             $3.58                  $3.90           $4.55

   Net Return/Acre                         ($57.26)        +$43.80        +$160.97              $315.59       $379.35


Crop Data — Soybeans (Cash Rent Land) 

   Yield/Acre                                        54                    51                  60                      61                60

   Price/Bushel                                  $8.73               $8.82            $10.21                $12.50         $14.17

   Gross Revenue/Acre (*)              $588.80          $538.87         $664.06              $767.12       $852.42        

   Direct & Overhead Costs/A.      $495.13           $498.27         $497.51              $536.18       $613.82

   Cost/Bushel Produced                  $9.17               $9.71             $8.32                  $8.83          $10.28

   Net Return/Acre                        +$93.11           +$40.60        +$166.65             $230.94        $238.60


Livestock Data — Net Return Over Expenses 

   Dairy – Per Cow                           ($38)             +$403             +$964                 +$208         +$686

   Beef Cow – Per Cow                    ($54)              ($223)             ($29)                  ($166)         ($236)

   Beef Finishing–Per Head           ($4.19)            +$1.47            +$8.03                +$3.53        +$42.90

   Hog Finishing–Per Cwt.            ($4.01)            +$2.53            +$8.69                +$6.79         ($ .51)


 NOTES :   Net Returns for crops and livestock are before labor & management charges.

                  Crop net returns include crop insurance and government farm program payments.

             (*) Note — The Gross Revenue per Acre for 2019 and 2020 includes fairly high levels of one-time                                   government farm program payments.


***  Table was developed by Kent Thiesse, Farm Management Analyst  ***



Note — For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President,

MinnStar Bank, Lake Crystal, MN.  (Phone — (507) 381-7960)

E-mail —  Web Site —


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