By JACKIE MUNDT
Pratt County farmer and rancher
There was a line in one of those corny comedy/action-adventure movies that made me roll my eyes recently. A character asked, “What’s in Kansas?” about their inability to understand why a mutual friend moved to Kansas. That’s not the line that made me roll my eyes. I am a transplant myself and know from experience that Kansas doesn’t seem very exciting until you see what makes it such a wonderful place to live.
The line I am still thinking about was the response, “she married a rich rancher.” The insinuation that the only thing making Kansas attractive to a highly affluent, college educated woman is lots of money, makes me little concerned about how many people think all ranchers and farmers are rich.
Since Tax Day is this week, I thought it would be appropriate to dive into how much money farmers make and why people have so many misconceptions about the topic.
In my opinion, several culprits create mystery around farm income levels. The first is non-farm people. I find it humorous to watch an outsider ask a farmer how many acres or cows they have. Some farmers see that as asking point-blank, “What’s your salary?” The poor outsider is probably just trying to show interest and wouldn’t have a clue if 500 or 5,000 acres was normal, let alone have any insight on the value of a cow.
Farmers also contribute to the problem. Growing up, my parents had off-farm jobs, so I never really thought about if our dairy made money. In college, I meet farm kids who somewhat proudly talked about getting Pell grants because their parents had a low income or at least had a low taxable income. I never liked that attitude and was glad to meet other farmers who were content to pay taxes because that meant their business was successful and they were being productive members of society.
Legislators and estate taxes are also part of the misunderstanding. Farming is incredibly capital intensive; high land and equipment prices make it really difficult to get started if you don’t inherit family assets. Politicians regularly point to a lower threshold for estate taxes as a way to tax the rich. The reality for farmers and many family businesses is that property and equipment quickly add up to large figures.
Those dollar signs aren’t the same as cash. They represent the tractor and field used to plant a crop. Most family farms would have to sell land and equipment to pay estate taxes if the threshold were lowered. Unless a farmer sells out, they will never see the kind of money in cash that makes people think they are rich.
Farmers deal with bigger numbers than other people. They may bring in $1 million in a great year and $100,000 the next – before expenses. After paying for seed, fertilizer, machinery, fuel, rent and other business costs, a farmer may make six figures or lose money for the year.
Farmers have tremendous amounts of money invested in equipment, inputs and land. Their risk level is high; they make many decisions without knowing if the weather or market at harvest will cover the costs they’ve already incurred. All farmers experience bad years. Sometimes they event put a farmer out of business. The stress and uncertainty of trying to keep the farm alive for the next generation is often cause of mental health issues.
Judging a farmers’ income is complicated and difficult because there are too many factors; rich or poor, materialistic or humble, heavily leveraged or paid in cash. My experience is that farmers’ finances may look different than the average American, but we really aren’t that different at all.
"Insight" is a weekly column published by Kansas Farm Bureau, the state's largest farm organization whose mission is to strengthen agriculture and the lives of Kansans through advocacy, education and service.