October 2004
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Machinery Cost Estimates for Amish FarmsRandall E. James IntroductionThere are now over 1,400 congregations, or church districts, of old and new order Amish spread across 33 states in the United States. The districts are clustered into more than 250 settlements of various sizes. The total Amish populations exceeds 170,000, and it more than doubles every 20 years. Over 40 new congregations are formed each year (Kraybill & Hofstetler, 2001). Participation and presentations at recent conferences focused on Amish communities demonstrate that Extension workers are routinely asked to assist with Amish agricultural problems. Finding technically accurate, up-to-date information that is relevant to horse powered, Amish farm systems can be extremely challenging. Extension workers have available a great deal of information to assist farmers in decision making on various crop and livestock enterprises. For example, Ohio State University annually produces farm enterprise budgets that list costs and returns for various crops and livestock (Moore et al., 2002). These budgets can be very helpful for modern agriculture; however, they are of marginal use to the Extension worker advising Amish farmers. While portions of the budgets, like seed costs and fertilizer, are similar in Amish and non-Amish farms, other portions are completely different. One of the most difficult numbers to estimate on an Amish farm is machinery costs. The equipment used on Amish farms is largely dictated by the ordnung (spoken rules of the church district) of each church district (Kraybill & Olshan, 1994; Drake & James, 1993). A study conducted in 2002 estimated the major machinery costs on Amish farms in the Geauga Settlement, which is centered in Geauga County, Ohio. The settlement is the fourth largest Amish settlement in the world, with approximately 1,800 families and over 80 church districts (Kraybill & Hofstetler, 2001; Miller, 2001). MethodologyTwo county Extension workers facilitated discussions with three small groups of Amish farmers in the Geauga Amish settlement on machinery costs. Using a set interview guide, each group was asked to discuss and agree upon the average cost, average useful life, salvage value, and annual maintenance cost of 23 common pieces of machinery used on Amish farms. The participants were encouraged to discuss each piece of equipment individually and come to consensus on the various values. A maximum average life of any piece of equipment was set at 30 years, even though it is recognized that some equipment may last longer. Because most of the equipment used on Amish farms is no longer manufactured, the farmers were instructed to establish the values based on a good, serviceable, used piece of equipment that a full time farmer might buy. The harrow, hay wagons, forecart, and hay tedder are typically bought new, so the farmers developed values based on new equipment in these cases. In addition, it was identified that manure spreaders are often purchased new, but a large number of farmers also buy used. Therefore, in the case of manure spreaders, values on both new and used equipment were generated. In the studied Amish settlement, each farm typically owns a complete line of machinery, with the exception of the threshing machine, which is typically owned by a "threshing circle" of 2-6 farms. To derive each farm's machinery costs, it is necessary to divide the threshing machine numbers by the total number of farms in the circle. Each group interview lasted approximately 45 to 60 minutes and was conducted in three different Amish homes. A host Amish farmer invited neighboring farmers to participate in the meetings. At the conclusion of all three meetings, mean values for each item were calculated and are presented in Table 1, in the Results and Discussion section. Total annual cost was established by: (Mean Purchase Price - Mean Salvage Value) / (Mean Useful Life) = Depreciation, At the conclusion of the study, the researchers realized two important pieces of equipment, a pesticide sprayer and a broadcast fertilizer spreader, had been inadvertently omitted. Both of these pieces of equipment are ordinarily purchased new. The researchers visited and interviewed an Amish equipment dealer who supplies these to the community. This equipment dealer was able to provide the necessary information to include these items in Table 1. A mechanical corn picker was not included in Table 1 because dry ear corn destined for the corn crib is picked and husked by hand in the Geauga Amish Settlement. Results and Discussion
Some of the equipment in Table 1 is not common to conventional farms; therefore, additional explanation is needed.
Because draft horses are a major power source on Amish farms, the cost of their ownership and maintenance must also be included in the total machinery and maintenance costs. Discussions with local Amish farmers and horse producers, along with local auction prices, indicate that a serviceable 2-year-old draft horse mare or gelding, broke to harness, costs between $1,000 and $1,200, or a rough average of $1,100. The actual price range is much wider, varying from a few hundred dollars for animals unfit for farm work and often destined for export and human consumption, to many thousands of dollars for animals of show ring quality. Barring an accident or fatal disease, most draft horses should have a working life of approximately 12 years. At the end of the good working years, they are often kept for light work until they die or get sick and have to be killed and buried. Thus, there is no salvage value. Therefore, $1,100 divided by 12 years is $91.67 per year, or about 25 cents a day for horse depreciation. Valuing hay at $90 per ton and oats at $1.50 per bushel, it should cost approximately $675 per year to feed a working draft horse, (Kline, Porr, & Cardina, 2000). This figure includes hay, grain, and minerals. Approximately $25 per year should be added for vaccines and health care. Most working draft horses are not shoed. The small amount of trimming and foot care necessary is typically performed by the farmer at little to no cost. Bedding costs are trivial. Because draft horses sleep standing up in stalls and rarely lay down, bedding is largely unnecessary. The cost of housing and pasture are very difficult to estimate because horses are typically housed in the barn with dairy cattle or other livestock and also graze with the other livestock. Therefore, it is easiest to charge all the pasture and housing costs to the cows or other livestock. This is particularly valid because the horses are primarily there to serve the needs of the cows and other livestock. Therefore, the total annual cost of owning and maintaining a draft horse can be estimated as $92 per year for depreciation and $700 per year for feed and health care, for a total of $792 per year, or $2.20 per day. Because a harness is absolutely necessary to utilize the power of the draft horse, the cost of the harness should be included with the cost of the horse. The total annual cost of single harness is $30, or $0.08 per day. Therefore, the total daily cost of the draft horse, including harness, is approximately $2.28 per day. This number is rounded to $2.30 per day so as not to imply greater accuracy than the calculation methods support. A remaining challenge is to estimate the number of "horse days" allocated to each enterprise in order to calculate an enterprise budget. A "horse day" is simply the amount of time that goes into a project or enterprise. For example, if a farmer plows all day with five horses, that's five horse days, with a value of $11.50. Horse days needed for each farm enterprise can be estimated through discussions with local Amish farmers. Implications for ExtensionInformation from this study will be most helpful for Extension workers preparing farm enterprise budgets and educational presentations for Amish clientele. Individual equipment budgets can be constructed for various crops. For example, an oat crop would need a grain drill, plow, disc, harrow, drag, wagon, threshing machine, hay baler, grain elevator, and tractor. It would not need a rake, hay tedder, sickle bar mower, corn binder, silage chopper, etc. Dividing the necessary complement of equipment for each crop by an average number of acres produced will generate an approximate equipment cost. Table 2 provides an example of annual machinery costs for an oat crop on an Amish farm.
If it was found through discussions with local Amish farmers that, if 5 horse days, at $2.30 per day, are needed to produce small grain, then $12 per acre should be added to the total machinery costs. In this example, $12 for horse time would be added to the $33 machinery cost per acre generated in Table 2 for a total machinery and horse charge of $45. In the case of the Ohio State University Enterprise Budgets, this is $15 per acre less than the non-Amish budget. The Extension worker can then use this number ($45) to replace the machinery charge in existing enterprise budgets and estimate total costs of small grains in horse drawn systems. The new budget would be much more realistic for Amish farmers and would provide a powerful educational tool to the Extension worker. ReferencesDrake, B., & James, R. (1993). Extension in Religious Communities. Journal of Extension [On-line], 31(1). Available at: http://www.joe.org/joe/1993spring/a6.html Extension Education in Amish and other Anabaptist Communities. Conference Proceedings (1998). Shipshewana, Indiana. Kline, R., Porr, S., & Cardina, J. (2000). Horse Nutrition. Bulletin 762. Ohio State University Extension. Kraybill, D., & Olshan, M. (1994). The Amish struggle with modernity. University Press of New England. Kraybill, D., & Hofstetler, N. (2001). Anabaptist world. Herald Press, Scottsdale, Pennsylvania. Miller, A. (2001). Ohio Amish directory, Geauga County and vicinity. Carlisle Printing, Sugarcreek, Ohio. Moore, et al. (2002). Ohio enterprise budgets. Department of Agricultural, Environmental, and Development Economics, Ohio State University Extension. Available at: http://aede.ag.ohio-state.edu/people/moore.301/index.htm Serving Amish and Anabaptist Communities. Conference Proceedings (2001). Walnut Creek, Ohio. This article is online at http://www.joe.org/joe/2004august/rb8.shtml. Copyright © by Extension Journal, Inc. ISSN 1077-5315. Articles appearing in the Journal become the property of the Journal. Single copies of articles may be reproduced in electronic or print form for use in educational or training activities. Inclusion of articles in other publications, electronic sources, or systematic large-scale distribution may be done only with prior electronic or written permission of the Journal Editorial Office, joe-ed@joe.org. If you have difficulties viewing or printing this page, please contact JOE Technical Support. |