For farmers across the country's breadbasket
A decline in farm earnings slowed personal income growth in much of the Midwest in the third quarter, but higher milk prices helped Wisconsin farmers in the three-month period and throughout the year.
Lower prices for corn, soybeans and wheat drove down profits for farmers across the country's breadbasket, pushing Illinois, Minnesota, South Dakota, Iowa and Nebraska to the bottom of the list for income growth over the 12 months that ended in September, according to data released recently by the U.S. Department of Commerce.
"Overall, the economy grew and personal income grew, but there were certain areas that were hit hard, especially farm income," said Toby Madden, an economist at the Federal Reserve Bank of Minneapolis.
Total personal income in Minnesota — which includes wages and salaries, investments, property rents and government assistance — rose at a pace of 2.5% over the 12 months that ended in September. That was the fifth-slowest growth rate in the nation, ahead of only South Dakota, Iowa, Mississippi and Nebraska.
In Wisconsin, total personal income rose at a pace of 3.4% over the 12-month period.
Income dropped noticeably in rural Minnesota in 2013 and the latest figures show the trend has continued.
But rural Wisconsin had a pretty good year in 2014, largely due to farm-milk prices, according to Bruce Jones, an agricultural economist with University of Wisconsin Extension.
"Incomes were up relative to what they were in 2013. Expenses were up as well, but the good news is that incomes rose more than expenses, and so the net farm income of Wisconsin farms are up. Maybe in the neighborhood of $300 million compared with 2013," Jones said in a recent podcast.
Dairy farm income was up from increased milk production as well as a higher milk price.