By: Lynsey Aberle
Originally published by Dakota Farmer at farmprogress.com
In 2024, North Dakota producers experienced a relatively stable year. Overall, it ended much like 2023, with a slight decline in average net farm income. The average net farm income for 2024 was $118,688, decreasing from $139,574 in 2023. This decrease was reflected in an approximate $68,000 decline in net cash farm income, as well as smaller inventory changes from the beginning to the end of the year. Those inventory changes were driven by lower crop commodity prices, fewer prepaids, increased accounts payable, and higher accounts receivable. 2024 net farm income remained fairly stable in comparison to the prior year primarily because the 2024 crop inventory reflected higher yields, although at lower commodity prices, and 2024 accounts receivable included ECAP payments. Without the added inventory and ECAP payments, we would have seen a larger decrease in the average net farm income.
In 2024, the average operation enrolled in the North Dakota Farm Management Education Program farmed 2,207 crop acres and grazed 242 pasture acres. The average operator was 46 years old and had 20 years of farming experience.
In 2024, the average gross cash farm income was $1,121,551. Of that total, 80.3% came from crop sales, 6.4% from livestock sales, 6.8% from insurance indemnities, 4.8% from other farm income, and 1.6% from government payments as shown in Table 1 below. Compared to 2023, crop sales decreased by $143,114 and livestock sales decreased by $24,446*, and government payments decreased by about $3,200. On the other hand, insurance payments increased by approximately $13,500.
Table 1
*The decrease in livestock sales could be attributed to a smaller number of livestock enterprises being included in the NDFME 2024 analysis, which likely impacted the overall livestock income.
In 2024, the average total cash farm expense was $898,858, decreasing $89,524 from the average total cash expense in 2023. Gross farm income was also down, decreasing $157,600 from the previous year. Interest rates were higher in 2024, which was evident in the $4,751 increase in interest expense. That may not seem like a significant increase, its notable considering the average amount of money borrowed was down by about $143,000, and the amount of principal paid decreased roughly $88,000 compared to 2023. Despite less money being borrowed, the reduced debt repayment contributed to a slight increase in the average debt-to-asset ratio, which rose from 32% in 2023 to 33% in 2024.
North Dakota producers experienced a slight decline in profitability measures in 2024. The rate of return on assets fell to 2.7% from 3.1% in 2023, while the rate of return on equity dropped to 1.3% from 2.1%. This lower return on equity suggests that borrowed money wasn’t generating as much return for operations as it had the previous year. Additionally, the 2024 average term debt coverage ratio was 1.32, meaning farmers and ranchers produced enough income to cover intermediate and long-term debt payments about 1.3 times. This was a decrease from 1.42 in 2023.
In 2024, the average operating expense ratio was 76.5% and the average interest expense ratio was 5.8%. This means that every gross dollar earned, about $0.77 went toward operating expenses and about $0.06 was spent on interest. Additionally, about $0.08 was allocated to depreciation leaving about $0.09 of each dollar as profit for the year.
In 2024, producers experienced an overall increase in crop yields, with the exception of a small decrease in canola and a more significant drop in Sunflowers. The five most profitable crops grown on cash-rented land in North Dakota in 2024 were:
- Sugar Beets with a net return of $593.94 and yield of 27.98 tons per acre.
- Pinto Beans with a net return of $131.38 and yield of 18.15 cwt per acre.
- Durum with a net return of $105.07 and yield of 61.37 bushels per acre.
- Oats with a net return of $76.03 and yield of 131.35 bushels per acre.
- Peas with a net return of $64.40 and yield of 40.05 bushels per acre.
The top ten crops produced in North Dakota in 2024 are outlined in Table 2 below, highlighting the average net return for each crop on cash-rented land. These net returns are calculated excluding ECAP payments.
Table 2
In 2024, North Dakota cattle producers nearly doubled their beef cow-calf profits from the previous year. The average net return rose to $458.78 per cow, up from $236.98 in 2023. Feed costs dropped to $489.90 per cow while weaning weights held steady at 520 pounds.
In comparison, producers who chose to enterprise their cow-calf with backgrounding calves through the end of year also saw a significant increase in profits in 2024. The average net return was $649.20 per cow, roughly $215 higher than the previous year. Feed cost was $529.53 per cow, about $40 higher than the regular cow-calf enterprise which includes calves only until weaning. The average weaning weight was slightly higher at 526 pounds. In this specific enterprise, producers allocate backgrounding costs across the entire herd rather than separating them into distinct cow-calf and backgrounding enterprises.
The 2024 beef backgrounding enterprise reported an average net return of $98.34 per head, which was higher than the 2023 average net return of $43.57 per head. On average, backgrounders were sold at 736 pounds at $261.59 per hundredweight, totaling $1925.30 per head, about $500 more than the previous year.
Overall, producers enrolled in the 2024 North Dakota Farm Management Education Program experienced a year similar to 2023 in terms of net farm income, despite facing a combination of higher yields, falling commodity prices, and strong livestock market values. While 2024 brought a unique set of challenges, it also offered new opportunities, allowing producers to remain financially resilient and perform well overall.
The data within this article was gathered by 10 North Dakota Farm Management Education programs. Instructors were able to gather information from 209 farms in different regions throughout the state. If you’d like to see your region’s annual report or the full state average report, please contact your local North Dakota Farm Management Education instructor or visit our website at www.ndfarmmanagement.com/resources.