A quick look at the cost of farming

A quick look at the co$t of farming

By Ben Baker

An old joke says:

How do you make a small fortune farming? Start with a large one.

EXPENSIVE

In 2020, the US Department of Agriculture estimates Georgia farmers spent $7.1 billion to grow their crops.

Farming is certainly expensive, something most people do not understand. Just to start farming on a big enough scale to support a family requires dirt, land and somewhere to grow the crop. People who say they have a “farm” on an acre or two may think they have a farm.

That’s actually a large garden. The average Georgia farm is 235 acres. The Peach State has 9.9 million acres devoted to farming.

If you figure a bare acre of farmland is $2,000, a low estimate, then the average farm has $470,000 invested in just real estate. If that farm also has pivots on the land, that per-acre price goes way up.

Look at this another way. If the farmer has to rent land to grow his crops, UGA reports non-irrigated land rented for $67 per acre in 2019. Land with a pivot costs $208 per acre in rent. Banks are sometimes reluctant to loan money to farmers to grow certain crops unless the land has a pivot.

FUEL COSTS

In 2022, farmers were hit with the biggest increase in diesel fuel they had ever seen. Tractors and combines run on diesel. 2022 figures are not yet in.

Figure it takes 4-6 gallons of diesel per acre to farm. At $2 per gallon and splitting the middle for 5 gallons to the acre means a farmer may spend $10 per acre just on fuel. That may not sound like much until you do the math to cover the whole farm. A 235-acre farm spent about $2,350 just in fuel. If diesel fuel doubled, that meant $4,700.

Irrigation systems can run electrical motors or internal combustion engines that use fuel.

EQUIPMENT

It also takes equipment to farm. Tractors, combines and pivot irrigation systems are expensive. A tractor big enough to handle a commercial farm will cost more than a vehicle. Add on the equipment needed like planters, sprayers, plows and harrows and the cost zooms. Because of how expensive combines are, some farmers opt to hire combine owners to come in and harvest their crops.

Spending $100,000 just on a tractor is not unusual. Module-making cotton combines can cost a cool half million dollars. Module makers drop covered bales of cotton in the field. Can you imagine spending that much money on something that is driven a few weeks to a month every year?

OTHER COSTS

On top of this, the farmer has seed, fertilizer and pesticide costs. Depending on the crop he may also have to pay for storage for a while. While Georgia has tax breaks, the farmer still has to pay property and income taxes. He has to pay sales tax on items used for the farm and production of the crops.

The farmer also has to make money to support his family.

Some crops generate more money than others. At the same time, some crops require a lot more investment than others. For instance strawberries have to be picked by hand. That means a large labor cost. Corn is harvested with a combine, so the peracre labor cost is lower. In 2022, the USDA says Georgia cotton farmers average 914 pounds per acre. They made 86.8 cents per pound or about $793 per acre. Peanuts averaged about 4.1 tons per acre but the farmer only made 23.3 cents per pound for an average of $1,190.60 per acre. However, that does not tell the whole story either. Some cotton is dryland, meaning it has no irrigation. Some is irrigated. Nearly all peanuts are grow on fields with irrigation. That raises the cost a lot.