ND Farm and Ranch Business 
Management Education Association

July 5, 2006

 Ag Producers Provide Major Economic Input for Their Local Communities

Don Hagen, Farm Business Management Director, Glen Ullin Public School

 GLEN ULLIN, ND – During the past year, agricultural producers provided for a major economic impact in their local communities.  The average farmer or rancher in southwestern North Dakota,  spent $202,231for agricultural goods and services, not including replacement equipment, buildings, breeding livestock, and other capital needs which accounted for an additional $62,527.  The total amounted to $264,758 per farm in 2005, an increase of $15,662 over the 2004 total.  This represents the annual spending for agricultural operations that averaged 1408 crop acres and 1952 pasture acres.    

Topping the list of farm expenses was land rent which averaged $30,683 per farm enrolled in North Dakota Farm Business Management programs operating south and west of the Missouri River .  This data is based on 81 farms and ranches covering 272,160 acres in southwestern North Dakota .    

Analysis of the 2005 farm records showed that the average farm spent $19,424 to repair equipment and buildings.  There was an average outlay of $16,289 for fuels and lubricants to operate equipment.  This annual fuel expense increased over $3,500 per farm while covering about the same number of acres as in 2004.  Hired labor per farm averaged $6,895, and hired custom operations were calculated at $10,014 per farm.  

On the livestock side purchased feed amounted to $16,542 per farm or ranch.  Livestock supplies, veterinary expenses, livestock marketing expenses, and other livestock expenses, not including feeder calves purchased, combined for an average of $7,440 per farm or ranch unit.  These numbers do vary.  For example, unfavorable moisture conditions in 2006 could considerably increase this year’s feed costs.       

Cropping expenses continue to climb.  In 2005 the average farm spent $21,149 for fertilizer, $16,784 for crop chemicals, $7,033 for seed, and $6,435 for crop insurance for a total of $51,401.  This represented an increase of 13.6% over the 2004 total for these same expenses.  In 2005 the average total cost of growing spring wheat on cash rented land in southwestern North Dakota was $127.84 per acre.   

Interest paid averaged $17,867 per unit.  Farm property insurance, real estate taxes, and farm utilities combined for a total of $9,693 while other assorted expenses of $15,983 accounted for the balance of farm expenditures.  

 The average farm family, consisting of 3.3 members, spent a total of $304,585 for farm operating expenses, capital purchases (excluding land) and family living needs.  During the past year capital expenditures accounted for $62,527 of the outflow, and family living consumed $39,827.  The $304,585 total represented an increase of $18,970, or 6.6%, from the 2004 total for these same items.  These spent dollars turn over approximately four times in local communities, thus greatly affecting many local and area businesses.

 The results of an increasing volume of cash flow dollars are an increased emphasis on business planning, marketing, and decision making.  It is important to note that the numbers quoted within are based on the average farm and/or ranch enrolled in the Farm Business Management program.  Agricultural producers enrolled in the FBM program represent a cross section of farmers and ranchers operating in southwestern North Dakota .   Individual farm numbers can and do vary greatly from the averages stated.

 Producers can find additional information on this and other farm and ranch data at the website, www.ndfarmmanagement.com.  More information on the North Dakota Farm Business Management Program may be obtained by contacting Steve Zimmerman, State Supervisor for Agricultural Education in the State Capitol, at 701-328-3162.  The Farm Business Management program is sponsored by the North Dakota State Department of Career and Technical Education.

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Last modified: April 25, 2008