N.D. Farm Household Expenditures Increase in 2007

Living expenditures averaged $51,167 for North Dakota farm households in 2007. This figure is based on 245 farms enrolled in the North Dakota Farm Business Management Education Program, which kept detailed living expense records throughout the year.

The average does not include income taxes or self-employment taxes, says Andrew Swenson, North Dakota State University Extension Service farm management specialist. The average household size of the farms was 3.1 people.

The largest expenditure was medical care and health insurance at $9,131.

“This is the first time in tracking farm family living expenses that a spending category has exceeded $9,000,” Swenson says. “Medical care and health insurance have been the largest expense since 2001. In the decade of the ‘90s, food was the largest expense. Food now is third at $7,159, but was very close to the fourth largest spending category, which was shelter, supplies and furnishings at $7,339. The second largest expense in 2007 was personal purchases and recreation at $7,838.”

Another large expense, at $6,541, was vehicle operation and purchase for the household, but not for farm business purposes. From there, the expenses by category are significantly lower, starting with contributions and gifts at $3,097. The four smallest expense categories were life and other personal insurance at $1,674, education at $1,642, other at $1,385 and nonfarm interest expenses at $1,112.

During the past 10 years, average farm family living expenses reported by the North Dakota Farm Business Management Education Program have increased from $31,170 in 1998 to $51,167 in 2007. The increase in 2007 was nearly 9 percent from the previous year and represents the second largest increase during the 10-year period.

One contributor to the jump in expenditures was a general increase in the price of goods and services. There was a 2.8 percent increase in the U.S. Consumer Price Index (http://www.bls.gov) in 2007.

“A more important reason may have been a greater level of purchasing and giving by producers who experienced the largest farm income in a generation,” Swenson says. “This is reflected by the three expense categories that had the greatest increase in 2007. Vehicle operation and purchases, contributions and gifts increased by more than 20 percent. Personal purchases and recreation increased by 13 percent.”

NDSU Agriculture Communication