A few weeks ago, a question was asked on Facebook by a local news station regarding farmers and government payments. Don’t worry, I won’t go into my feelings about that topic right here…but I do want to try to explain something to those that aren’t involved in agriculture.
It seems as if there is a misconception about farmers. (Not shocking, I know.) But the comment that was made online really struck a chord with me…and it should for you, too. You can read about my reaction here.
But I thought maybe we should have some numbers, so that people can understand what really goes into farming.
Now, to be honest with you, I’m using numbers for my area, so things can be markedly different where you’re at…but in the end, it should all pencil out about the same.
Let’s start with the basics. Crops are figured by the acre (which is roughly half a soccer field). So most of the items you purchase to put the crops in and take them off are calculated based on how much it costs per acre. Crops that I will use in these examples are spring wheat, corn and soybeans…some of the more common crops in my area.
Check this out:
Example 1: Spring Wheat
The average yield (crop that they harvest) per acre for spring wheat is 49 bushels/acre in my area. The average market price is estimated at $7.54 per bushel. If you multiply that out, you would come up with an average income of $369.46 per acre. Not too bad, eh?
Well, that just doesn’t happen by itself. Let’s look at what it took to get there. The average direct costs associated with planting, pest management (taking care of bugs), nutrient management (taking care of soil), insurance, fuel, repairs, etc. is $192.92 per acre. Indirect costs, such as overhead, machinery depreciation, purchasing new machinery (usually just new to you, not new-new) and land charges, run about $117.52 per acre. The costs total $310.44 per acre. Hmmm…a little too close to that first number, right?
So, in an average year, planting spring wheat, a farmer can expect to make roughly $59 per acre. And that’s with fuel costs averaged at $3.40/gallon for gas and $3.20/gallon for diesel. We all know what is forecasted for those numbers, right?
I’ll spare you all the rundowns of the other two crops, and just give you the final numbers: Soybeans would average about $103 per acre and corn (for grain) would average about $150 per acre.
So what’s the average farm size in Dickey County (where I live)? It’s 1,100 acres. So let’s say we planted our whole farm to corn, and we had 1,100 acres, we would (according to these numbers) roughly make $165,000. (Also remember, that would be if you planted every acre and were able to harvest it. Most of the time, there are significant areas of drowned-out crops, etc.) And if we planted our whole farm to wheat? $65,000. (And let me tell you, we would never, ever dream to plant our whole farm to one crop. You remember that saying about all your eggs in one basket, right?)
But seriously, folks, that’s not how it works. Those are the numbers we shoot for and strive to reach…and like most professions, very little goes as planned.
For example (and these hit a little too close to home): imagine having to harvest all your wheat in one direction, doubling your fuel costs. Or having a pest move in, doubling your pest management inputs. Or having a wet spring, dry summer, late fall, whatever have you may, lowering your yields substantially.
No, to be honest, farmers on a national average follow this graphic a little more closely:
And that would be why so many farmers, and/or their partners, seek off-farm employment.
But we will plant a crop this spring, in hopes that we’ll meet or exceed our goal yields, while trimming as much off the expenses as we can…just like any good business person would do.
And that’s a fact.
P.S. I would especially like to thank Kacey Holm, our county extension agent, for his assistance in getting me these numbers. Extension ROCKS!
I tell people simply, would you work 12 hours a day, 7 days a week, where you have to pay for everything you use. In HOPE that in a few months you boss may see fit to pay you?
JFK said that the farmer is the only man that buys retail, sells wholesale, and pays freight both ways.
Farming is a form of gambling, a noble form but taking chances nonetheless. No one goes into this business for the money.
And you’re right, Extention agents do rock!
Great post here Val! I know folks don’t like sharing the numbers but since others try to use the numbers to tell a very different story, putting them out there clearly makes sure people will understand them. Thanks for the openness!
Not a problem, Janice. I don’t mind sharing numbers at all…but I do want to remind those that are reading this, that those numbers represent what the whole farm makes…which is split between all members involved in farming. And unlike most off-farm income, health insurance, dental, etc. isn’t usually covered. In this case, Mark and I are farming together. (His father helps out a lot, but there’s a crop-share/rental involved there, which I believe is covered in the expense part of the equation.) These numbers, divided by the hours that we put in (I figure 14 hour days for Mark, and only 4 hour days for me), well it figures out to be between $6.50 and $12 per hour. And these numbers are all readily available through local extension offices, but it seems as if people prefer to make assumptions, rather than put in a little research time and pencil work.
I’d love to think they are all just as bad at numbers as I am, but I doubt that’s the truth!
Thank you for writing this! I just read it in the FBNews, and hunted up your blog (wasn’t hard). This is perfect for sharing at our next township meeting, where a few too many people think farmers are rich people “cryin’ poor”.
Go ahead and share all you want! It’s amazing how many people don’t realize that these numbers are available at any county office, but don’t take the time to actual research for themselves, just complain and consider whatever people say as “fact.” It’s one of the reasons why I write as often as I do, so that I know that our side of the story is always available.
farming is so good to do
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Every farm operation is influenced by many different varialbes, and therefore every farm operation, and how much income is achieved is different. I’m a 3rd gen crop only farmer and since I took over for my dad 16 years ago, I have never had a bad year. I know farmers who play the “poor farmer” card but are extremely well off and it does not sit well with me, a fellow farmer, so I can only imagine how irritating it is for non-farmers putting in 9-5/day and barely making enough $ to live on. Farming has been good, 7 figure good and I’m thankful for it. In addition to the $, is the free time we have to spend time with family and pursuing other interests…. Let’s face it, in Dec-February, there isn’t a whole lof of farming going on, at least in Illinois –
I wanted to take the time to say thank you for writing this report. I am in the process of setting up an Aerial Farm Scouting Service company in Wester Tennessee, Kentucky, Southern Illinois, and some of the areas near them. I have yet to meet a farmer, on a Sunday during season, that did not make their old farm truck look like a drag car getting out of the parking lot when the preacher finally shut up if their where good clear skies for planting.
I helped out on my grandfathers and some of my aunt and uncles farms. I never knew where they where when they where not at the job they did during the day just them coming in, sometimes daily talking about “Ver’ments” on this 40 or pest on that 40 or weeds on the back field, just after the stars where just coming out in the night sky and eating a cold dinner me and their family had ate hot hours earlier. I must disagree with you on one thing. I know from observation its the foot/acre that makes or breaks a farmer. 1 foot can yield 1 extra bushel or for some crops, soy being the big one in my area, 5 extra bushels some where. And according to your blog and others I am looking at that extra bushel or more can be the difference between a low yield lucky to break even crop and a high yield pay off the mortgage crop, overly simplified.
Even though I was raised around it, Even though I helped with the farm, I didn’t know the numbers well enough until this article explained it. I did not know to look at multiple revenue streams for the farmer that the service I am setting up. Yes Scouting with my method increases crop yield now i know it decrease some operational cost and need to work on that. I also now know roughly what the cost will be incase of an unplanned landing. The FAA rules say insurance and the operator has to pick up the cost according to average production value plus a reasonable amount in addition to the FAA, reporting and investigating, fines, and fees if that yield is over $500 gross. 1^2 foot is then 1^2 acre of loss/day of investigation. I hope any of your readers thinking of adding this o either their farming operation or their farm services operation consider this. Most blogs encouraging a DIY drone scout for farmers are breaking the cost to $5 and acre. Its not! Ill make sure on my Video blog to mention its calculated by the FAA rules and its potential yield as calculated in Agriculture which means put some zeros in there.
Well again thanks I have some new data i needed to consider.