Farmers Got a Raise

According to this Illinois study:

Farm wages, formally known as return to operator labor and management, averaged $171,507. Find yours by taking your net farm income, then subtracting a fair return to your equity in machinery and land. The statewide average was nearly $100,000 higher than 2006 and about $88,000 above the five year average. The labor and management return statistic has fluctuated as low as $38,707 in 2005, up to the $171,507 of 2007.

I'm not clear on what they consider a "fair return". When I took the ag course in high school some 50 odd years ago, the instructor used 6 percent. Mom always said farmers were foolish--they could sell out and invest their money and live nicely. (Figure 1,000 acres at $4K per, and 6 percent = $240,000 return on investment.) It's one of the things that makes talking about farming tricky. And what would you pay the manager of $4 million in capital. Mutual funds charge something around 1 percent, so that would leave $70,000 for labor. Now I have to admit, crop farmers don't work hard, like dairy/poultry farmers (my parents) did, at least not year round. If they work 50 days worth of 16 hour days in the spring, and another 50 days in the fall (which is an overestimate, I think, but it gives a nice easy figure to multiply by--that's 1600 hours. Add another 200 days of 4 hour days (and 4 hours in the coffee shop), that's 800 hours. So the hourly rate isn't bad, isn't great but it's comparable to teachers.