NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665
May 18, 2000
The average living expenditures of 320 farm families enrolled in the North Dakota Farm Business Management Education Program was $34,889 in 1999, an increase of about $3,700--or nearly a 12 percent jump--compared to 1998 living expenses.
This average does not include income taxes or self-employment taxes, says an agricultural economist at North Dakota State University. On average, there are 3.6 people per household in this group.
"The size of the increase for 1999 is somewhat perplexing, given the fact that the U.S. Consumer Price Index (CPI) rose only 2.2 percent for 1999," says Andrew Swenson, farm management specialist with the NDSU Extension Service.
The spending habits of North Dakota farm families from 1994 through 1998 may provide some rationale for the significant increase in 1999 expenditures, Swenson says. During the previous five years, the increase in farm family living expenses had been averaging only 1.4 percent annually, compared to a 2.4-percent annual increase for the CPI.
"Those years were characterized by low net farm income and, I assume, some serious belt-tightening of farm household budgets," Swenson continues. "A rebound in net farm income in 1999 plus a 9-percent increase in non-farm wages may have released pent-up consumer demand of farm households."
The largest increase in expenditures for 1999 was vehicle purchases and operation, which went from less than 3,000 to nearly $4,100. Household operation, supplies and upkeep rose by more than $700 to $5,684. Similarly, expenditures on recreation and personal purchases increased by more than $500 in 1999 to $5,173 per household, Swenson says. Categories for clothing outlays and contributions/gifts each were less than $2,000 in 1999, but both had large percentage increases. Total food and dining-out expense in 1999 was $5,629.
"Food expense has been relatively flat through the 1990s," Swenson says. "The average annual cost for the years 1995 through 1999 was only $6 more than the average for the first half of the decade."
After a dramatic increase in the early 1990s, healthcare expenditures remained relatively flat during the 1994-1998 period because more farmers and spouses took off-farm employment and received healthcare benefits, Swenson says. Also, some households may have lowered health insurance coverage levels to cut expenses. But in 1999, medical expenditures increased, on average, by $464--or 9 percent--to $5,589.
Farm families interested in information about planning and budgeting for their living expenses can request the following publications from county offices of the NDSU Extension Service: "Farm Family Living Trends in North Dakota" (HE453), "Taking Charge of Family Finances: How Much Should We Spend" (HE440) and "Taking Charge of Family Finances: Managing Farm Family Finances" (FE452).
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Source: Andrew Swenson (701) 231-7379
Editor: Dean Hulse (701) 231-6136
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