TelFarm

This report is based on FINPACK FinAn business analyses through MSU Extension
participating farms. It is a gauge of the financial performance of Michigan farms
completing the analysis. The Farm Business Summaries are divided into three Whole
Farm Analyses subsets: 1) All Participating Farms - Whole Farm Report, 2) Crop
Farms Only – Whole Farm Report, and 3) Dairy Farms Only – Whole Farm Report.
There are also “cost of production” enterprise reports for corn, soybeans and winter
wheat.
Farms are included as “crop” or “dairy” if over 70% of their gross farm income comes
from their crop sales or milk sales/dairy cattle sales, respectively.

Highlights

Interpretations

The incomes fell dramatically from the record high net farm income of $439,960 in 2022 to $42,761 in 2023 for the average of all participating farms. Farmers have needed to make management changes to deal with coming off the high net income years of 2020-2022. The probable changes would include reducing capital purchases and possibly increasing debt to deal with the lower incomes, especially if the crop yields were reduced by variable weather issues. Grain prices remained strong during most of the year, which was helpful for those with crops to sell. But at the end of the year the lower crop inventory value created a huge negative adjustment to the accrual-based net farm incomes.  This was due to the December 31 inventory prices dropping 25-35 percent from 2022 to 2023.

Crop Farms

The average crop farm had a 2023 net farm income of a ($18,944) after adjusting for the large drop in crop inventory value on the ending balance sheet when compared to the beginning balance sheet. Still, it would have been a lower income year on the cash basis without the accrual adjustment when compared to the very good 2022 year. Crop input costs have also increased over the previous years.

Dairy Farms

The average dairy farm had a 2023 net farm income of $253,018. Lower than the incredibly high incomes in 2022 but quite comparable to the other years.  The 2023 average milk sale price was $20.04 per cwt for our reporting dairy farms. This price dropped some from 2022 but still a strong level. Dairy farms in prior years had average milk sales per cwt of $25.06 in 2022, $17.85 in 2021, $16.62 in 2020, and $17.41 in 2019. The recent years have been very good for the health of Michigan dairy farms, so it is hoped to have cured many previous wounds from the 2010-2018 years.

Enterprise Analysis

Enterprise Analysis calculates the cost of production and then is adjusted by government payments received and unpaid operator labor. Crop enterprises include corn, soybeans, and winter wheat. Crop enterprise reports are sorted by owned and cash rent.

Compiled by: John Jones, TelFarm Program Coordinator and Stephanie Lelo, TelFarm Center Support Specialist, AFRE Dept, MSU. MSU-Extension Farm Management Educators Roger Betz, Corey Clark, Florencia Colella, Jon LaPorte, Chris Bardenhagen, Cheri Burk, and Frank Wardynski contributed FINPACK Farm Business Analyses for this report.