Ag Decision Maker

Contributed by William Edwards, extension economist

Over 20,000 people make their living each year as full-time employees on Iowa farms. Iowa State University and the North Central Risk Management Education Center recently conducted a survey to study the wages and benefits they receive. The average compensation paid to these employees in 2011 was $38,929 per year, before deductions for taxes. Cash wages accounted for $33,320, or 85 percent of this total. In addition, the average employee received fringe benefits valued at $4,185 and cash bonuses of $1,424.

In a similar survey conducted in 2006 the average farm employee received $34,640 in total compensation. The change represents an average annual increase of about 2.1 percent. Employees worked an average of 2,602 hours in 2011, so on an hourly basis cash wages averaged $12.96 and total compensation averaged $15.05. The average employee had 12 years of experience working on a farm, seven of which were with the present employer. Six percent of the employees included in the survey were female, and 16 percent were born outside the United States.

The most significant benefit provided was some type of insurance plan, usually medical. Other common benefits included housing, meals, farm produce, work clothing and recreational opportunities.

Factors such as farm size, employee duties, number of other employees supervised, education and years of farm experience had a major influence on how much each employee was paid. For more details about the farm employee compensation survey see the information file link.

Ag Decision Maker (AgDM)

An agricultural economics and business web site.

Whole Farm

Melissa O’Rourke, ISU Extension Farm & Agribusiness Management Specialist

Farmland owners and operators should be aware of recent changes to Iowa law regarding mowing along Iowa roads.  The mowing restrictions apply to private landowners as well as local government units.  Changes to mowing regulations were enacted during the 2010 legislature – so 2011 is the first full year of effectiveness. 

Mowing regulations now apply to secondary roads throughout Iowa as well as to interstates and primary roads.  This is a significant change to the roadway mowing regulations contained in Iowa Code 314.17. 

Secondary roads are those roads under county jurisdiction.  Primary roads are any roads or streets under the jurisdiction of the Iowa Department of Transportation (DOT). 

Mowing is prohibited prior to July 15^th along any secondary road, primary road, or interstate highway in Iowa.  

However, the law contains a list of exceptions to the July 15 date.  Mowing along roadways is allowed prior to July 15^th within 200 yards of an inhabited dwelling, for visibility and safety reasons, or along a right-of-way within one mile of corporate city limits.  

Mowing prior to July 15^th is also allowed for purposes of access to a mailbox or other accessibility purposes – such as field access.  Additionally, mowing is permitted within 50 feet of a drainage tile or tile intake. 

Mowing is also allowed to promote native species of vegetation or other long-lived and adaptable vegetation, or to establish control of damaging insect populations, noxious weeds and invasive plant species. 

Mowing is permitted on rights-of-way adjacent to agricultural demonstration or research plots. 

Finally, the law also points out that mowing is allowed in rest areas, weigh stations and wayside parks at any time. 

Prior to enactment of these changes, the Iowa Department of Transportation (DOT) issued mowing permits as early as July 1.  The significance of changing the prohibited mowing date to July 15 is to allow a second nesting season for pheasants and other Iowa native bird populations. 

According to the Iowa Department of Natural Resources (DNR), pheasant hens that were unsuccessful in nesting during May or June will attempt a second nest. For those birds, the first two weeks of July is  critical because that is the time chicks begin to hatch from second nesting efforts.  The DNR points out that pheasants – as well as many songbird specieis – use roadside ditches for nesting and brood rearing habitat. 

Recent years have seen weather patterns making for challenging nesting seasons.  2011 is no exception throughout much of Iowa.  

With struggling pheasant populations, the DNR encourages everyone to follow the mowing regulations to provide additional opportunities for nesting success.  Summer weather patterns of dry, warm weather increase nesting success and chick survival.

Ag Decision Maker (AgDM)

An agricultural economics and business web site.

Legal & Taxes, Whole Farm

Contributed by Craig Chase, ISU Extension Farm Management Field Specialist

The highest rent doesn’t always get the landlord the best return depending upon how the tenant treats the land, etc. The general economic condition for agriculture, land values, input prices, and farm profitability and land values and land rent have to over the long-run reflect the profitability of farming.

Another way to look at land rent is on a per bushel corn basis, at $3.50 per bushel for corn, how much could a tenant afford to pay for rent? Maybe about $1.15, and with 190 bushel average for good farm ground in this case should be somewhere around $220, give or take.

Also consider 1 yr versus 3 yr lease terms and the reasons for a long term agreement such as a stability of income as long as the tenant can afford to pay the rent. More on leasing is available on Ag Decision Maker.

Other, Whole Farm

Contributed by Craig Chase, ISU Extension Farm Management Field Specialist

For production risk, enterprise diversification (longer term rotations) is commonly used to lower risk.  Longer-term rotational crops tend to have different planting and harvest periods.  Crop insurance is normally used to transfer risk. 

Price risk is typically reduced through sales contracts. 

Financial risk can be lowered through keeping good production and financial records, as well as understanding asset management.  The key to agriculture, as well with other businesses, is the control of assets and not necessarily the ownership of assets.  In many cases, risk can be transferred through rental or leasing agreements. 

Legal risk for organic transitioning farms would focus on certification rules and making sure rules are met.  If involved in producing food, then compliance with food safety regulations would also be necessary.  Mitigation can come through various organizational structures and cooperative or collaborative agreements. 

Human risks come into play primarily through the hiring of laborers.

 I recommend reviewing the information on the agricultural risk education library (www.agrisk.umn.edu) and if you have specific questions, please let me know what those are.

Whole Farm