Purchase photos

Farm income tumbles

5/19/2013

By MIKE CORN

By MIKE CORN

mcorn@dailynews.net

No surprise here, northwest Kansas farmers had smaller earnings last year.

"We're down," said farm economist Mark Wood. "We're down some. We had a good year, but we didn't have as good a year as the year before."

Farm income skyrocketed in 2011 with sharply rising commodity prices and strong crop yields.

Last year, the drought lowered or even decimated crop yields, especially for fall crops such as corn and soybeans.

Preliminary numbers, Wood said, show farm income for the northwest Kansas Farm Management Association district hit $288,000. That's a drop of more than 30 percent from the $440,000 income in 2011.

If those numbers hold, it would be the third-highest income falling behind 2010 and 2011. The district's average income in 2010 was $344,000.

The numbers for 2012 still are preliminary, he said, because of last-minute shifts in the federal tax code that delayed processing the final figures.

The tax changes prevented some data from being included in the numbers, although Wood is confident they won't change the outcome much.

"We plan to finish up in the summer," he said of including all the data to ensure continuity in its data collection.

Wide discrepancies exist between farmers in the western reaches of the district and those in the east. Much of that difference is based on farm size and availability of irrigation for some farmers, boosting income through higher crop yields.

In the nine counties surrounding Colby, income fell from $516,000 in 2011 to $367,000 last year, a drop of approximately 29 percent.

In the eastern reaches of the district, the area Wood is responsible for, incomes dropped from $239,000 in 2011 to $175,000 in 2012. That's a 27-percent decline.

The eastern counties include Phillips, Rooks, Norton, Graham, Ellis, Trego and Rush.

Some areas of the district were hard hit by the drought last year but were missed in 2011.

The drought continues to affect farmers, although there's some relief being seen in some areas.

Because of the drought, crop insurance likely will play a big role in 2012's income.

"I can't say how much crop insurance is in the mix," Wood said of the analysis. "It's a lot."

He was able to determine family living expenses had increased dramatically.

Last year, the east side of the district had living expenses -- including insurance and taxes -- of $83,895

The west side of the district had expenses of $110,000, he said, $32,000 of which was income taxes.

"They tend to spend more, but they've had more cash," Wood said.

Income tax changes that will exempt many farmers didn't take effect until this year, so any benefits won't be seen until next year.

Still, he's unsure what the year holds anyway.

"The wheat is just a mess," Wood said. "I drove down (U.S. Highway) 24 recently, and I didn't see a decent field until I hit Webster Lake."

Based in Colby, that's a nearly 90-mile drive.

Some of the no-till wheat in the Colby area just emerged this spring, a sure sign of trouble.

But crop insurance again will help soften the blow of farmers losing the crop early.

He's worried most about cow-calf producers who are struggling because abnormally cool weather, and the drought has prevented many from putting cattle on pastures.

He's seen some improvements in weather patterns as the drought slowly shrinks its way west.

"It's gotten to 183 highway," he said of U.S. Highway 183 running through Hays. "It may take a couple months to get to Colby."