Released August 25, 2008

ST. PAUL, Minn. -— Your grandparents may have made a good living by farming 80 to 160 acres. However, the agricultural industry has changed drastically in the past several years, including the farms where raw agricultural products are produced.

As input costs increase and commodity prices farmers receive fluctuate, profit margins change over time. As these changes occur, farmers have had to change their businesses. Some farmers have gone out of business. Some are farming part-time and work off the farm to supplement their income. Others have gone to alternative farming methods in order to remain in farming. Yet others still farm full-time and have increased the size of their farms to remain profitable.

Whether we agree or disagree with these changes, the changes are a function of the changing agricultural industry. The following numbers are used not to justify or support the changes in agriculture. Rather, they’re put forth as one approach to explain what’s happening. The numbers presented are real numbers from real farm families throughout the southern one-third of Minnesota.

In 2007, a total of 850 farm families from the MnSCU South Central/Minnesota West Adult Farm Business Management Program kept household and personal expense records. Their average household and personal expense for the year was $74,804, with an average family size of 3.4 persons.

This family living expense includes: food, medical care, charitable donations, supplies, furnishings, clothing, educational costs, recreation expenses, gifts, utilities, child care, house rent and upkeep of the house. Also included are expenses for the purchase of non-farm vehicles, investments, savings, life insurance premiums, income/social security taxes, and non-farm capital purchases.

If a farm family plants a 50/50 corn and soybean rotation, they would need approximately 464 acres of corn and 464 acres of soybeans--a total of 928 acres to earn the family living amount of $74,804.

For other farm enterprises, it would take 127 dairy cows, 10,717 head of hogs from weaning to finish, or 948 head of beef cows in a beef cow/calf operation.

For more details, see the U of M Center for Farm Financial Management site at http://www.cffm.umn.edu, then click on "publications" for an article titled "What does it take to earn a living on the farm?"

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http://www.extension.umn.edu/extensionnews/2008/largerfarms.html

Contacts: Catherine Dehdashti, (612) 625-0237, ced@umn.edu

Gary Hachfeld is an ag business management educator with University of Minnesota Extension.