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September 2, 2004 NDSU Publication Tracks Farm Family Expenditures A recent North Dakota State University publication summarizes farm family living expense trends using information from the North Dakota Farm Business Management Education Program, according to Andy Swenson, a farm management specialist with the NDSU Extension Service. Farm family living expenditures were $40,517 in 2003. This figure does not consider income, Social Security or Medicare taxes. Not surprisingly, family living expenses have increased each year. “The trend from 1996 to 2003 has been an annual increase of nearly $1,600, even though the average size of the households declined from 3.6 to 3.4 people,” Swenson says. The largest cost is housing, which encompasses rent, mortgage interest and insurance, plus household supplies, furnishings and utilities. These costs represent more than 20 percent of total farm family living expenditures, rising from $6,166 in 1996 to $8,426 in 2003. Nationally, housing costs are higher, representing 30 percent of total expenditures. Housing costs for farm families are lower because the farmhouse is often considered an integral part of the business with little or no house rental or mortgage interest included in family living expenses. “Over the past eight years, medical costs have become a greater burden on the farm family household budget,” Swenson says. “Average medical costs for North Dakota farm families have risen from $5,120 in 1996 to $7,040 in 2003. Medical costs now represent 17 percent of total family living expenditures. These expenditures are over double the national average because self-employed individuals, such as farmers, do not receive employer-sponsored health benefits. Gaining medical benefits is an important consideration for off-farm employment.” Although food expenditures (including dining out) have increased, their relative importance to the farm family budget has declined. Food, as a percentage of total household expenditures, has decreased over the past eight years from 17 percent to 15 percent. In 2003, food expenditures were $5,973 per family. North Dakota farm families spend less on food, per person, than the national average. One possible explanation is that farm families eat out less often than urban dwellers. Farm families also have more opportunities to use home-grown food instead of purchased food. However, the value of food raised for on-farm consumption is small and has declined over time to only $158 in 2003. For most farm families, vehicles serve a dual function, providing transportation for the household and the farm business. An accounting question on farms is how to split expenses such as transportation and utilities between the household and the farm business. The portion of transportation costs that were considered farm family living expenditures has increased from $2,936 in 1996 to $4,915 in 2003. This is lower than the national average. “However, both the average household and the North Dakota farm household spent about one-half of their transportation dollar on the purchase of vehicles and one-half on fuel, repairs, license, insurance, etc.,” Swenson says. “Farm household expenditures on vehicle purchases seem more variable from year to year than the national average. This is probably because net farm income is quite variable.” The publication "Farm Family Living Trends in North Dakota" (FE-453) can be requested from county offices of the NDSU Extension Service. A summary of the most recent consumer expenditure survey conducted by the U.S. Department of Labor can be accessed on the Web at http://www.bls.gov/cex/csxann02.pdf. ### Source:
Andrew Swenson, (701) 231-7379, aswenson@ndsuext.nodak.edu |
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North Dakota State University |
