December 29, 2021
K-State just released its “Preliminary Estimate of 2021 Kansas Net Farm Income and a Projection for 2022” report. What they found was farmers will need to be prepared for what lies ahead.
“For 2021, we expect the net farm income for Kansas grain farms to be around $261,000, which is a 39% increase from 2020,” Gregg Ibendahl reported in a release with regards to the report. Idendahl and Dan O’Brien, both agricultural economists for K-State, found not all farms will experience a profit in 2021 and Ibendahl expects that 10% of farms will see negative net income. But overall, the study concludes 2021 will bring strong returns for most farmers. This will be helped by government support.
The estimates examined in the report for last year and this year examine seven areas: yields, prices, crop acres, expenses, crop insurance, government payments from the farm bill and ad hoc government payments. Projections came from an examination of 588 grain farms in the Kansas Farm Management Association database. Although expenses went up this year, many farmers had already purchased inputs like fertilizer, but as inflation continues to increase the supply chain teeters, farmers are expected to experience a decrease in profit margins.
Right now, the higher prices for grains are mitigating the increased prices for inputs, but this can change at any point. Livestock prices are expected to remain steady in 2022. Because of this economic outlook, O’Brien is suggesting more of an emphasis this year on price protection.
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