A decline in farm earnings slowed personal income growth in Minnesota and 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.

Still, because the corn and soybean harvests were so strong, there may not be much broader economic impact, Madden said. Farmers had good yields, so the related businesses that serve them and buy products from them were not deeply affected.

"It's more of a price issue than a volume issue," Madden said.

Another factor driving down personal income in Minnesota has been persistent weakness in finance and insurance. Those industries in Minnesota shed 3,800 jobs in the 12 months that ended in September, and have been the weakest industry for jobs in the state over the past two years.

That's now reflected in the personal income figures. Income from finance and insurance dropped by 4.5 percent in the third quarter compared with a year ago — by far the biggest drop for any state and a decline of $742 million.

"The housing market has not done as well this year as had been expected, and so I'm thinking that some of the challenges in the finance area might be related to that," said Laura Kalambokidis, the state economist.

Slower income growth in Minnesota shouldn't be too surprising though, she said, given how much further along the state is economically than places that really suffered in the downturn like Nevada and Florida.

"They have higher growth rates in employment than Minnesota, but they haven't gotten back yet," Kalambokidis said. "Are we ahead of the curve, and that brings with it lower growth rates now?"

Income growth over the past five years is slightly above average in Minnesota, and per capita income growth was well above average in 2013, the most recent year for which that data is available.

Adam Belz • 612-673-4405 Twitter: @adambelz