Sunday, February 25

ARE FARMERS RICH?



 ARE FARMERS RICH?



One thing I hear all the time is that farmers are rich. This can be a tricky statement because of how you define rich. If you take into effect all of the assets the farmer has (Land, livestock, tractors and other equipment, as well as buildings) then the farmer is seen as being rich. If you go by the money in their bank account, then not so much.





Right now, land in Southwestern Ontario will cost you anywhere from $5,000-$23,000 per acre. If you were to buy a pig ready for market it would be worth roughly $160. If you bought a beef cow ready for market it would be worth between $1,500-$1,800, and a sheep would be worth $200-$500.




A dairy farmer is only paid an average of $0.70 per litre of milk produced. In addition to the price of the cow, the farmer has to pay other bills (Feed, vet visits, wages, fuel, hydro......) from that $0.70 per litre they receive. Once all the farm expenses are paid, the farmer only makes a few dollars a day to cover their personal expenses. The dairy farmer is limited on how much milk they can ship by the amount of quota they owns. One kilogram of quota allows a farmer to produce one kilogram of butter fat a day (which is about 25 litres of milk), which is roughly equivalent to one cow. currently, In Ontario, one kilogram of quota costs $24,000.




Another example is when you buy a loaf of bread at the store. The farmer that grew and harvested the grain for that loaf of bread only gets about $0.08 per loaf, while the consumer is charged $3.







If a farmer were to sell their land and equipment, they could probably become very rich. However, without selling their farm, a farmer is not that rich because their money is tied to land, livestock, and equipment.


So are farmers rich? I guess its all in how you define rich.