Farm Families Spend More on Living Expenses in 1997

NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665

November 5, 1998

Farm Families Spend More on Living Expenses in 1997

North Dakotans living on farms spent more for living expenses in 1997. Average annual expenditures for family living rose by 1.4 percent, to $30,519. Income and self-employment taxes are not included in that figure, which is based on the records of 292 farms families enrolled in the North Dakota Farm Business Management program.

"The increase was slightly less than the rise in the consumer price index of 1.7 percent for the typical urban American household," says Andy Swenson, extension farm and family resource management specialist at NDSU.

North Dakota farm families appear to be managing their food dollars wisely. Food expenses as a percent of total farm household expenditures actually declined from 1990 to 1993 and has remained relatively flat from 1994 through 1997, Swenson says. The average food expenditure and farm family size in 1997 was $5,315 and 3.6 people, respectively.

During the past eight years, average medical costs for North Dakota farm families have risen dramatically, from about $3,500 in 1990 to more than $5,000 last year. The portion of the total household budget that North Dakota farm families devote to medical care and insurance—about 16 percent—is more than double the national average.

"One reason for the big difference between the farm family and the urban family in medical costs is the lack of employer-sponsored health benefits for the self-employed farm family," Swenson explains.

Even so, medical costs for the farm family declined slightly in 1997, compared to 1996. One reason may stem from a greater reliance by farm families on off-farm jobs, which supplement farm income and provide for family living expenses. Last year total off-farm wages and salaries of North Dakota farm families increased by 13 percent. Swenson says that growth indicates greater off-farm employment and associated health care benefits. However, medical insurance and expenses of North Dakota farm families are still more than twice the national average.

The North Dakota farm family combined expenditure for housing and household supplies, furnishings and utilities averaged $6,528 in 1997, or about 20 percent of the North Dakota farm household budget. By comparison, 30 percent of the typical American household budget goes for those items.

"This difference is due to the housing investment, which is often considered to be an integral part of the farm business, and little or no house rental or interest on the mortgage payment is included in a farm family's living expense," Swenson explains.

More information on this subject is available in a newly revised extension publication titled "Farm Family Living Trends in North Dakota" (HE453), which details and analyzes family living expenditures for the period 1990 through 1997. The publication is available from any county office of the NDSU Extension Service.

Farm families interested in information about planning living expenses can request the publications "Taking Charge of Family Finances: How Much Should We Spend" (HE440) and "Taking Charge of Family Finances: Managing Farm Family Finances" (FE452). These publications are also available through county extension offices.

###

Source: Andy Swenson (701) 231-7379

Editor: Dean Hulse (701) 231-6136

Click here for a pdf version of this graphic.