MINNESOTA CURRENT FARM SITUATION

These papers describe the current economic conditions and outline some of the opportunities facing Minnesota farmers as they complete 1998 and develop plans for 1999. The first paper, Prospects For Farm Income in 1998, describes the variation in net farm income farmers in the Southeastern and Southwestern Farm Management Associations have experienced over the past twenty years. The possible effects of 1998's low commodity prices and government program payments on net farm income are discussed in the context of this historical variation. This paper points out that some farmers are experiencing a very good year in 1998, while others may have very low net farm income this year. Those with high incomes in 1998 may be primarily interested in opportunities to enhance their cash flow for 1999, while those experiencing financial stress during 1998 may need to consider a wider range of adjustments as they plan for the coming year. The remaining papers provide information farmers may want to consider as they plan their marketing and financial strategies for the coming year. Financial Management Alternatives outlines a wide range of financial management alternatives that can be used to deal with cash flow problems. Some of these alternatives will be of interest to farmers who have difficulty in projecting a positive net cash flow with the relatively low commodity prices being projected for 1999. Others are of primary interest to farmers who have relatively high debt levels and must find ways to improve both their net cash flow and their debt/asset position. Some observers have suggested that the low commodity prices projected for 1999 may lead to reductions in cash rental rates. The paper, Cropland Rental Market Impacts of Low Crop Prices, discusses a procedure to estimate "fair rental rates", and provides an historical perspective of the impact low commodity prices have had on land rental rates. The remaining two papers, Situation and Outlook For the Livestock Sector, and Considerations in Developing a Corn/Soybean Marketing Plan for 1998/1999, discuss the major factors to evaluate and options to consider in developing a marketing plan for corn, soybeans, hogs and cattle for the coming year.