As has been the case in all regions of North Dakota, the north-central region saw a decrease in net farm Income again in 2015, according to the annual report posted by the North Dakota Farm Business Management Program.

The report, consisting of data from 165 farms enrolled in the area Farm and Ranch Business Management Program, showed an average farm profit of $20,361. This was a 77% decrease from the 2014 farm profit number and a 93% decrease from the highs seen in 2012.

BRIGHT SPOT: Field pea was one of the most profitable crops in north-central North Dakota last year, but overall farm profit margins declined significantly.

Gross farm income for the average farm in 2015 was $586,542, representing a decrease of $72,978 from 2014. Much of the decrease can be attributed to lower commodity prices received for crops, lower direct government program payments received due to the new farm bill and the continued increase seen in operating expenses. The average farm saw a decrease in working capital to $174,301, which is 30% less than seen in 2014. 

The average farm consisted of 1,983 acres and 308 acres of pasture. This is also a slight decrease from the previous year. The average operator is 44 years old and has been farming for 19.8 years. Both the average age of the operators and their years in farming decreased slightly. This can be attributed to more beginning producers entering the industry.

Major crops grown in the area had mixed results. Leading the list of profitable crops for 2015 were field peas, barley and sunflowers. All remaining crops showed negative net returns on cash-rented acres. 2015 crop yields and net returns on cash-rented acres showed field peas had an average yield of 45.8 bushels per acre, slightly higher than the 45.3 bushels per acre produced in 2014. The average net return in 2015 was $86.06 per acre.

Barley had an average yield of 69.5 bushels per acre, which was lower compared to the 75.4 bushels per acre seen in 2014. Net returns for barley on cash-rented acres showed up at $60.30 per acre.

Sunflower (oil) showed an average yield of 16.87 cwt per acre in 2015 compared to 16.78 cwt in 2014, with a net return for the average producer at $7.14 per acre.

Hard red spring wheat had an average yield of 54.5 bushels per acre, which was 3 bushels lower than the 57.5 bushel yield recorded in 2014. The 2015 net return was a negative $28.51 per acre.

Soybeans had an average yield of 28.1 bushels per acre, which was lower than the 30.2 bushels per acre in 2014. Average net returns for soybeans came in at a negative $35.93 per acre.

Canola showed an average yield of 18.14 cwt per acre, slightly lower than the 19.82 cwt per acre shown in 2014, with an average return of a minus $29.07 per acre.

Cow-calf enterprises in the region again did show positive returns in 2015, although not at the levels seen in 2014. The average producer saw the gross margin — made up of beef calves sold, transfers out of the enterprise, cull sales, purchases, transfers into the enterprise and inventory change — total $918.83 per cow with a net return of $311.06 per cow. This was lower than in 2014, where the average producer had a gross margin of $1,343.62 with a net return of $664.38 per cow. 

2015 still produced the second-highest gross margin and net return seen by cow-calf producers in history. Overall cost per cow for the average producer did see a decrease of 11% to $607.77 per cow, compared to $679.24 as seen in 2014. Much of the decrease was in direct expenses, other than feed costs. Backgrounding enterprises did see a decrease in returns to a negative 63 cents per cwt for the average producer compared to a net return of $78.36 per cwt in 2015.  Most of the lower returns can be attributed to the higher cost of the calves entering into the enterprise and the lower prices received at the end of the backgrounding period.

The full north-central regional report can be viewed at ndfarmmanagement.com — click on "Reports" — or you may contact the local Farm Business Management Program serving your area. The Farm Business Management Program is sponsored by the North Dakota Department of Career and Technical Education. For more information on the program, visit ndfarmmanagement.com or contact Aaron Anderson, state supervisor for agricultural education, at 701-328-3179.

Graner is a North Dakota Farm Business Management instructor at Dakota College-Bottineau, Rugby, N.D.