Farm Horizons • Aug . 8 , 2016 • Page 12 Farming ’ s role in economics
How often have we heard that Main Street goes the way of farming ? That agriculture has a trickle-down effect on Main Street business ? Well , let ’ s take a look at what effect an average farm has on Main Street and the rest of the community .
According to the information from the 2015 analysis of the Farm Business Management Program , the average farm spent $ 960,262 in the greater community . The average farmer in this data group was 47.8 years old and farmed an average of 683 acres . This is about seven years younger than the USDA average age .
This average farm covers both grain and livestock operations , so will look different than many farms . Let ’ s take a look at some specifics ; the average farm spent $ 157,532 on seed , fertilizer , and chemical on their crop acres . This equals $ 230.65 per acre for seed , fertilizer , and chemical . Another $ 28,620 was spent on other crop expenses , such as crop insurance and drying grain .
Purchased feed expense was $ 101,444 , with another $ 40,248 being spent on veterinary , marketing and advertising , trucking , cleaning supplies , etc . These livestock operations could include dairy , hogs , or other livestock .
Machinery costs for fuel and repairs amount to $ 67,040 . Custom work and feeder livestock expenses of $ 73,107 round out the machinery expenses . General farm expenses would include farm insurance , and other miscellaneous expenses . Labor costs of $ 40,094 for both part-time and full-time labor were a part of the expenses on our average farm .
Interest and leases account for a large percentage of the total , and amount to $ 162,720 . With an average land rent of about $ 230 per acre , this totals $ 111,090 , with $ 51,630 being spent on interest for money borrowed to operate the farm , purchase machinery , buildings , and land , in order to improve the farming operation . This investment into the farm business was $ 139,264 for 2015 . This farm paid $ 20,513 for real estate taxes and utilities .
This leaves $ 96,497 for family living . Now , you are saying that this is a very high income compared to mine , but out of this total , income taxes of about $ 20,000 must be paid . Unlike many of us who receive paychecks , the farm pays all of the medical insurance costs , which typically are $ 12,000 to $ 15,000 for the family . Life , dental , disability ,
Myron Oftedahl Farm Business Management Instructor , South Central College
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