0901MinnOrganicFarmsDoWells.cfm Minn. organic farm profits improve
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Minn. organic farm profits improve

ST. PAUL, Minn. (AP)--Things are looking up for Minnesota's organic farmers, a new report says.

The annual report on organic farm performance from the Minnesota Department of Agriculture and University of Minnesota said 2010 was "a good year but not a stellar year for these farms. Profits improved but were not outstanding.'' Balance sheets, however, were on average very sound as they headed into 2011.

The report said that after a difficult 2009, the median organic producer earned a net farm income of $62,463 in 2010. That was a sixfold increase over 2009 and was consistent with returns earned in 2007 and 2008, which were considered very profitable for the organic sector.

Profits in 2009 were low for organic and conventional farms alike. The 2009 report attributed the fall in organic farm profitability to several factors, particularly sharp drops in prices for organic spring wheat and corn, along with slightly lower yields coupled with higher production costs. But 2010 was a banner year for nearly all of Minnesota agriculture thanks to near-perfect growing weather and high prices.

Organic dairies generated solid profits on average last year, while organic crop farms were less profitable due to production problems, cost increases and variable prices, the new report said.

Minnesota's conventional farms also reported sharply higher profits in 2010, the report said. The median conventional farm earned a net farm income of $125,021 in 2010. Their profits were driven by high prices for conventional crops, lower costs for crop production and the return to profitability of livestock farming. It said conventional crop and hog operations were very profitable, while dairy and beef operations made moderate returns.

Minnesota's average conventional farm in 2010 had total assets of $2.2 million compared with $1.2 million for organic farms. Conventional farms also generated higher total sales.

"When it is all put together, the conventional farms, on average, outperformed these organic farms in 2010. This does not mean that these organic farms performed poorly. Rather, the conventional farms had an exceptionally profitable 2010,'' the report said.

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