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After strong profits, farmers increase household purchases

FARGO Like many area farmers, Kevin Throener spent more money on his family last year. "We didn't have any big purchases. But health insurance keeps going up, and we just spent more," said the Cogswell, N.D., farmer. Living expenses for the 251 N...

FARGO

Like many area farmers, Kevin Throener spent more money on his family last year.

"We didn't have any big purchases. But health insurance keeps going up, and we just spent more," said the Cogswell, N.D., farmer.

Living expenses for the 251 North Dakota farm families enrolled in the state Farm Business Management Education program rose last year to $57,404, 12 percent more than in 2007.

The 2008 average doesn't include income taxes or self-employment taxes.

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Farmers enrolled in the program keep detailed records of their spending through the year.

The 2008 increase "was kind of what we expected," said Andrew Swenson, North Dakota State University Extension Service farm management specialist.

Area farmers, on average, enjoyed strong profits in both 2008 and 2007.

That encouraged some producers to catch up last year on things - such as home repair and personal vehicles - that they didn't have money for in prior years, Swenson said.

For instance, 2008 spending on shelter, supplies and furnishings rose 20 percent to $9,082.

Spending on nonfarm vehicles rose 25 percent to $8,247.

High gas prices accounted for some of that increase, but most of the rise came from the purchase of new vehicles, which rose 50 percent in 2008.

It's only natural that farmers spend more on such items when times are good, Swenson said.

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Inflation - the U.S. Consumer Price Index rose 3.8 percent in 2008 - contributed to the 12 percent increase overall, but spending on vehicles, housing and medical needs was a much bigger factor, he said.

Dennis Walsh, Harvey, N.D.-based regional president for First International Bank, said some of his bank's farm customers spent more on themselves last year.

"It was well-deserved. There was pent-up need and demand," he said.

Medical costs continued to rise last year, too, according to numbers collected in the farm management program.

Medical insurance and costs averaged $9,374 per household, making them the largest expense by category.

Throener, who's farmed for 14 years, has participated in the farm business management program for several years.

He and his family - wife Ronda and four children - have a large deductible on their health insurance policy to keep down premiums.

Even so, medical costs keep rising, he said.

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"Medical is really a concern," he said.

The Forum of Fargo-Moorhead and the Herald are Forum Communications Co. newspapers.

Related Topics: AGRICULTURELOCAL BUSINESS
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