1. Minnesota Agriculture Economy Update
Mr. Chair, Members, Thank you for the opportunity to join you this afternoon for this hearing covering the agricultural economy in Minnesota. I am Matthew Wohlman. I serve as Deputy Commissioner at the Minnesota Department of Agriculture.
Matthew Wohlman, Deputy Commissioner
Monday, February 26, 2018

2. Minnesota Department of Agriculture
Our mission is to enhance Minnesotans’ quality of life by ensuring the integrity of our food supply, the health of our environment, and the strength of our agricultural economy.
At the Department of Agriculture our mission is to enhance Minnesotans’ quality of life by ensuring the integrity of our food supply, the health of our environment, and the strength of our agricultural economy.

3. Agriculture in Minnesota
Agriculture is an Economic Cornerstone:
Agriculture generates $121 billion in economic activity
Supports 400,000 jobs
73,300 farms
Ranks in top 10 nationally in production of more than 20 agricultural products (turkey, corn, soybeans)
$10 billion crop sector
$8.8 billion livestock sector
Major biofuels producer
4th largest exporter of ag products
In Minnesota, we are blessed to live in one of the most fertile, productive agricultural regions in the world. Our farmers are some of the best at producing the food, feed, fuel and fiber we need to feed a growing and hungry world. Clearly, agriculture is a cornerstone of our Minnesota’s economy. Our agricultural industry generates $121 billion in economic activity and supports over 400,000 jobs across our state. We are home to 73,300 family farming operations. We have both a strong crop and livestock sector. Minnesota was also home to one of the earliest renewable fuels markets in the country and today, we are a major producer of biofuels that add value to our farm commodities. Minnesota is also a major exporter of food and agricultural products to other parts of the world. And, I’m proud to also mention, that our state is home to our nations top agricultural farmer owned cooperatives and more Fortune 500 companies involved in agriculture than nearly any other state.

4. Current Trends in Agriculture
Low commodity prices; high input costs
Trade Agreements
Poised for growth in food demand
Ramp-up in efficiency and sustainability
Energy and renewables opportunity
Direct farm to consumer relationships
Generational transition
Continued diversification
The world population is expected to top 9 billion people by Over the next quarter century, world food production needs to double. But the simple fact is, agricultural production needs to double but there is little new arable land in the world. Therefore, to meet these daunting trends, our farmers are using technology to focus on smarter, better, more efficient techniques to raise crops. These technologies will help our producers to raise more food, for more people in ways that sustain our environment. In Minnesota,

5. National Net Farm Income
The farm economy faces significant headwinds and financial pressures including low commodity prices, the rising costs of inputs, and the stress that can accompany these realities:
Net farm income forecast to decrease $4.3 billion (6.7 percent) from 2017 to $ billion in 2018, the lowest level since 2006.
Net cash farm income is forecast to decrease $5.0 billion (5.1 percent) to $ billion, the lowest level since  
Today, Minnesota’s farm economy faces significant headwinds. Our farmers are facing significant financial pressures. In most crops, our farmers are receiving prices that are below the cost of production. According to the USDA Economic Research Service, net farm income, which is a broad measure of profits, is forecasted to decrease by $4.3 billion or 6.7% in If realized, this year would represent the lowest net farm income since 2006.

6. Net Farm Income and Net Cash Farm Income (National)

7. Net Farm Income (Minnesota)
In Minnesota, the Center for Farm Financial Management at the University of Minnesota along with the Farm Business Management program at MnSCU have developed the FINBIN database that collects a variety of farm metrics. This chart shows net farm income over a 20 year period in Minnesota. From 2007 – 2012, Minnesota farmers net farm income was incredibly strong – led partially by historically strong corn and soybean prices, during those years. In 2012, Corn prices were over $6 dollars a bushel on average. Today, corn futures are at $ a nearly 40% decline. In 2012, Soybean prices were over $13.80 per bushel. Today, soybean futures are $10.43 – a nearly 25% decline. The result, median net farm income in Minnesota fell from its peak in at 197,858 to roughly $43,000 in 2013 and 2014 and to $27,768 in 2015 and $35,636 in 2016.
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8. Net Worth and Debt To Assets (Minnesota)
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9. Rural Finance Authority
Created in 1986 by the Minnesota Legislature to help farmers struggling through the farm crisis:
3,074 loans issued for $249 million since 1986.
This has leveraged an estimated $750 million in financing for rural Minnesota.
Program has grown to now include the Beginning Farmer and Seller Assisted Loan Programs; the Agricultural Improvement Loan Program; the Livestock Expansion Loan Program, and the Restructure Loan Program.
This session, Governor Dayton is requesting $20 million in bonding to make money available through the RFA.

10. Beginning Farmer Tax Credit
Last session, Governor Dayton and the Legislature passed the historic Beginning Farmer Tax Credit
This tax credit will provide assistance to beginning farmers to rent or purchase farmland and other assets
40 applications involving land transactions for $206,296 in tax credits
8 applications for purely educational credits for $9,110 to beginning farmers

11. Farm and Rural Helpline
Funded by the MDA to provide assistance to farm families and rural residents:
Mental health helpline to address stress, anxiety, depression, and other mental issues;
Can assist with daily living costs such as heating and food assistance;
Provides business, financial and legal resources for farmers facing.

12. Farm and Rural Helpline
Free, confidential helpline available 24 hours a day, seven days a week
The toll free number is
(833)

13. Farm Advocates
Farm Advocates provide free, one-on-one assistance for Minnesota farmers who face crisis caused by either a natural disaster or financial problems:
Assist with debt restructuring, cash flow projections, lender negotiations, legal referrals, etc.
Trained and experienced in agricultural lending practices, mediation, lender negotiation, farm programs, crisis counseling, and disaster programs
The Farm Advocates Program has been supported by the MDA since 1984

14. Down on the Farm Workshops
MDA sponsored “Down on the Farm” professional development workshops:
Designed to help people who work with farmers on a regular basis recognize stress, anxiety, depression, and other challenges
Free, three-hour workshops held January, February, and March in six different cities across MN
532 registrations to date (across all 6 sites) including ag lenders, clergy, counselors, farmers, educators, agribusinesses, government agencies

15. Down on the Farm Workshops
Testimonials from workshop attendees:
In general personally, it was wonderful workshop and I found the most value in looking at how I can better manage my own stress.  As a lender I sometimes take on my customer’s situations as if they were my own.
 I have recommended the workshop to my colleagues & coworkers.
 I loved the whole workshop! I could have listened longer. It was really good
 Thank you for making this presentation happen. I think the farm community gets overlooked and this was a good reminder for everyone about the importance of what they do and the human side of farming and stress.
 Thank you for taking the time to help educate the Ag Communities on topics that may have been considered taboo in the past.

16. Minnesota Agricultural Exports
One of the bright spots has been Minnesota exports:
Minnesota is the 4th largest exporter of ag products.
Agriculture is also Minnesota’s largest exporting industry, accounting for more than one-third of the states total exports.
Minnesota’s high-quality ag products are shipped all over the world, to markets like China, Mexico, Japan, Canada, South Korea, and Taiwan.
Emerging export markets like Indonesia, Vietnam, the Philippines, and Colombia are also gaining importance for the state’s food and ag exporters.
Nearly 60,000 jobs in Minnesota are tied directly or indirectly to exports.

17. Minnesota Agricultural Exports

18. The Impact of NAFTA
We’re closely watching the NAFTA Negotiations and will continue to advocate for Minnesota’s farmers:
NAFTA’s 2016 economic impact was $4.7 billion and 12,900 jobs in Minnesota
22.5% ($1.6 billion) of Minnesota’s agricultural exports went to Canada and Mexico
NAFTA trade partnership has seen significant growth from 1995 – 2006
Minnesota’s export growth to Mexico – 406%
Minnesota’s export growth to Canada – 250%