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When Creating 2019 Budgets, Keep In Mind Family Living Costs

October 19, 2018
farmdoc daily (8):194
Recommended citation format: Raab, D., B. Biros, B. Zwilling and J. Moore. "When Creating 2019 Budgets, Keep In Mind Family Living Costs." farmdoc daily (8):194, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, October 19, 2018. Permalink

In 2017, the total noncapital living expenses of 1,219 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) average was $79,798–or $6,650 a month for each family. This average was 3.7 percent higher than in 2016.  Another $5,744 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment.  Thus, the grand total for living expenses averaged $85,542 for 2017 compared with $82,260 for 2016, or a $3,282 increase per family.

Income and social security tax payments increased about 11.5 percent in 2017 compared to the year before.  The amount of income taxes paid in 2017 averaged $28,435 compared to $25,512 in 2016. Net nonfarm income slightly decreased, averaging $40,032 in 2017.  However, net nonfarm income has increased $9,119, or 29.5 percent in the last ten years.

In Figure 2, total family living expenses (expendables plus capital) are divided by tillable operator acres for 2008 to 2017.  In 2008, all of the family living costs per acre averaged about $98 per acre.  This increased to $109 per acres in 2017. The 10-year average is $108 of total family living expense per acre.  If we compare this to the 10-year average of net farm income per acre of $172, then 63% of the net farm income per acre is family living expense.  If we look at the average year over year increase for the last ten years for family living per acre, the annual increase was 1.2% per year.  The five-year annual increase per year would average negative 2.5%.  Therefore, as you work on your crop budgets, keep in mind that a 54 cent price change on 200 bushels per acre corn is about equal to the average total family living expense per acre.

When you take total family living expenses minus net nonfarm income this equals $58 per acre in 2017 and was $59 per acre for the five-year average.  This would be the part of family living that is covered by the farm income.  In addition, there is another $36 per acre in social security and income taxes to be covered by the farm in 2017.  The five-year average for these taxes was $43 per acre.  A 29 cent price change on 200 bushels of corn per acre is equal to the 2017 family living cost that would be covered by the farm.

More information about Farm and Family Living Income and Expenditures can be found here.

The author would like to acknowledge that data used in this study comes from farms across the State of Illinois enrolled in Illinois Farm Business Farm Management (FBFM) Association.  Without their cooperation, information as comprehensive and accurate as this would not be available for educational purposes.  FBFM, which consists of 5,600 plus farmers and 60 professional field staff, is a not-for-profit organization available to all farm operators in Illinois.  FBFM field staff provide on-farm counsel with computerized recordkeeping, farm financial management, business entity planning and income tax management.  For more information, please contact the State FBFM Office located at the University of Illinois Department of Agricultural and Consumer Economics at 217-333-5511 or visit the FBFM website at


Biros, B., D. Raab, B. Zwilling, and J. Moore. “Farm and Family Living Income and Expenditures.” University of Illinois Farm Business Management Handbook FBM-0190, October 2018.

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