Road Warrior

Farm Family Living-Cost Trends



In the last article I indicated that farm family living cost increases were hotter than this summer’s sun-baked fields. With average farm family living cost of approximately $85,000 for 2011, let us examine some of the major trends and components of cost based upon the Nebraskaland Farm and Ranch Management Educational Program’s data summary.

First, when compared to the year 2000, overall average family living cost, before income taxes, has increased 123%. This is an average annual increase in total cost of 10.3% over the 12-year period. This far exceeds the rate of headline inflation, including food and energy, of 4%. What are the leading causes for the escalation over the period?

Medical costs and health insurance premiums increased 158% on the farms reporting personal expense data. Personal interest on consumer and credit card debt increased 246% over the same period. As an observation when analyzing farm financial statements, the prevalence of credit card debt – in both number of credit cards and balances – has increased dramatically in recent years, similar to urban and suburban households. The producers reporting in this dataset were very generous in gifts and donations to church and charities. Gifts were up 126% and donations to church and charity increased 313% over the period.

Analyzing the data finds that “the taxman has cometh,” due to increased profitability on farms. Taxes, including Social Security, have increased 292% over the period, truly a staggering amount.

For historical reference, the same record data finds that family living withdrawals in 1988 were $22,480/year. It is amazing how things can change in a quarter century!


Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at

Discuss this Blog Entry 1

on Mar 1, 2013

What I want to know is, if this law was in effect during their recent jaunts on the taxpayer, and it was, why aren’t they being charged with embezzlement? How many bankers were ever charged with a crime when they misappropriated millions of tax payer bailout money so that they could receive a bonus. A bonus is for a job well done and theirs was not. I think it is wrong for banks to charge a person £5 a month because they don’t have a balance greater than £500. And we are paying the banks for letting them use our money applied with online pay day loans for their investments, and it used to be the other way around, how sad is that?

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What's Road Warrior?

Dave Kohl is an ag economist specializing in business management and ag finance. He can be reached at

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