Bottom of the list for income growth
A decline in farm earnings slowed personal income growth in much of the Midwest in the third quarter.
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 percent 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.
Income dropped noticeably in rural Minnesota in 2013 and the latest figures show the trend has continued.
Strong crop yields nationally pushed commodity prices down in the early fall. Corn prices fell below $3.40 per bushel at the end of September, and some Minnesota growers lost money in the harvest or considered themselves lucky to break even.
As a result, farm income in the third quarter fell by $1.6 billion in Minnesota compared with a year earlier and declined by a total of $17.4 billion in all Midwestern states.