ARE FARMERS RICH?  UPDATED!!

Our most popular blog post is this one from September 30, 2014.

Right now, on June 23, 2015, farmers are looking at a pretty bleak picture so I thought it was worth an update.

INPUT COSTS

-nitrogenBy way of review, farmers must buy things to plant a crop.  Seeds, chemicals, fertilizers, equipment, and labor are called non-land input costs.

According to the University of Illinois, the 2013 non-land input costs were $615 per acre.  The projected number for 2014 is $588.  But, as I reported in September last year, they are still going to average about $600 per acre.

By the way, land is still expensive.

Average land costs in Illinois are still increasing.  The U of I reports an average cost of $290 in 2013 and a projected average of $293 in 2014.  Three dollars probably doesn’t sound like a huge difference until you multiply it times 1,000 acres or 3,000 acres … but for the sake of argument and round numbers, we’ll increase the average to $290 instead of the $250 we used in September.

Based on the projected income for 2014 of $823, the average central Illinois farmer with highly productive farm land is losing $67 dollars per acre in 2014.

SO HOW MUCH DID THIS FARMER BANK?

If he’s farming 1,500 acres, he lost $100,500.
If he’s farming 1,000 acres, he lost $67,000.
If he’s farming 500 acres, he lost $33,500.

So … he’s in the red after a full year of work, toil, sweat, and stress.

2014 is what a bad year looks like.

WHAT’S A WORSE YEAR LOOK LIKE?

too much waterI made some predictions in September last year.  Here there are and I think you’ll see that I came pretty close.  I thought input costs and land costs would come down a little and they didn’t really.  But farmers made a little more than I predicted too.

2014 Predictions (September 2014):
Total Input Costs = $575 per acre
Total Land Costs = $250 per acre
Total Expected Income = $800 per acre
Net Expected Income = -$25 per acre

It’s a sad story, but 2015 looks even worse.

The cash price today for corn is $3.30.  Let’s bump that up to $3.50 just to get a really good average picture of where farmers might end up this year.  I’ll also use an average yield of 190 – a little below 2013 and 2014 because of all this rain we’ve been getting.

Everything else staying the same, this farmer makes $665 per acre projected income in 2015.  After he’s paid for his land and input costs, he’s losing $225 per acre.

2015 Predictions:
Total Input Costs = $600 per acre
Total Land Costs = $290 per acre
Total Expected Income = $665 per acre
Net Expected Income = -$225 per acre

are farmers richSO ARE FARMERS RICH?

These are the years farmers save for.  Sometimes they make good money, and they reinvest that in their farms by building or repairing sheds, buying or repairing equipment, installing tile lines in their fields, and more.

Sometimes they lose big money and those good years and the investments and savings they’ve built up are all that get them through.

Are farmers rich?  Not in 2014 and it’s not looking good for 2015 either.

Mitchell_Lindsay

Lindsay Mitchell
ICGA/ICMB Marketing Manager

Source: I used this table (page 6) for my numbers and I think you’ll see that I was rather conservative, though there are many more details included here that you may want to investigate.

12 thoughts on “ARE FARMERS RICH?  UPDATED!!”

  1. also you aren’t considering the fact that the farmer also has to have living expenses coming from that income, because if he is farming that many acres he probably don’t have an outside job.

  2. This doesn’t explain why farmers have brand new trucks every year tax free. Why they have $20,000 ice houses that they write off as “warming houses” tax free. Why they have monster homes and brand new tax free tractors every few years. Why they work half the year and go on vacations all winter and have lake cabins for the summer. We taxpayers should pay them more in subsidies because they are suffering so. I realize it’s not all farmers but from our neck of the woods, this is the norm. I don’t have much sympathy here. Save from the good years and cover your own butts for the bad years just like the 9-5ers that work 2,080 hours a year and pay taxes on everything have to.

    1. Maybe you should become a farmer a find out for yourself why everything is tax free. Everything is not tax free. If you are a farmer you still have to pay taxes at the end of the year. Last year we bought a brand new Ford pickup, BUT we traded in another one to get the brand new one. People don’t realize it, but farmers feed you. Oh yeah, people would ask where does milk comes from, this is a simple question but they answer “the store.” Every body at school claims we are rich, because we are farmers, just because my dad drives a new pickup. The thing is the “everybody” are people like their dads are concrete company owners or construction company owners and their money comes from big businesses or farmers.

  3. Just remember everything you put in your mouth was grown by a farmer, what comes out of your mouth is your opinion. Thank god we can eat every day. Paul the Land Man,illinois

  4. Its looking like another bad year here in michgan way too much rain and the ground is cold those that got there crops in early looks fair but most of us the crops are crap.

  5. Just think how lucky the American farmer is that they have there beloved subsidy system on top of these losses because we Australian farmers don’t have any such system and have to rely on our own resources. On top of that our machinery, fuel, labour and input cost’s are all more expensive. These numbers are only based on the cost of renting land and most farmers would own a large percentage of there ground already and only a portion of there ground would be either rent or land that they have purchased recently and are still paying off and with the cheap interest rates that America has had over the last 7 years or so this would have not been hard to do.

  6. I hate it when people have no clue about farmers working before the Sun comes up til after it sets,not to many have cottages upnorth or on a lake,a farmer depends on the weather more than anything else,sure we had a few good years lately,but this last couple have went back to prices we got for corn 40 years ago,people want cheap food yet alway’s got something bad to say about a farmer,we don’t own a cottage anywhere,don’t eat in expensive restaurants,went Ponderosa a couple weeks ago and the bill was $50.13,i just about died how much that was,we pay our own health insurance,which is $1000 a month,while the complainers probably get there’s from the place of employment,finally if you get 3 meals a day and your belly is full STOP COMPLAINING ABOUT FARMERS.

  7. U.S.A. has the cheapest supply of food,only 6.6% of your income is spent on food,Brazil is 15.9%,China is 26.9% and if you live in Packistan you will spend almost half of your income 47.7%,if you got a problem here with the farmers,move to one of these other countries,where there are no regulations.

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