Kansas income growth last year hobbled by drop in farm earnings

Total personal income in Kansas was up 2.9 percent in 2014, ranking it 42nd among states, as a plunge in farm earnings held back income growth across the Midwest.

Personal income counts all wages and benefits as well as rents, dividends, interest and all government payments such as Social Security and unemployment insurance.

The actual gain in total personal income for the state was $3.7 billion, boosting the total to $132.3 billion in 2014. But that growth was reduced considerably by a $1.1 billion drop in farm earnings.

Crop farmers saw their incomes fall as prices for grains and hay fell, particularly in the second half of the year. The losses for agriculture were somewhat mitigated by the cattle industry, which continued to show strong profits for the most part in 2014. Kansas performed relatively better than Nebraska, Iowa, Missouri, South Dakota, Indiana and Illinois.

Remove the rough year for agriculture, and Kansas moves up to 31st place for growth.

Most other Kansas sectors saw gains in personal income during the year, with construction, health care and corporate management contributing the most.

But Donna Ginther, director of the Center for Economic and Business Analysis at the University of Kansas, said that a second reason for the state’s poor performance is that one of its main economic engines, durable goods manufacturing, which includes Wichita’s aircraft makers, actually fell slightly in 2014. It generated $50 million less income than it did the year before.

That will likely change this year, she said.

“The economy is recovering to the point where businesses and people will start thinking about buying airplanes,” she said.

This story was originally published March 25, 2015 at 10:11 AM with the headline "Kansas income growth last year hobbled by drop in farm earnings."