|Economics of Farming with Horses
Career Cost of Horses versus Tractor
by Chet Kendell
Given the following values:
The career cost of using a tractor = initial cost + replacements + operating cost - trade in value =
The career cost of using horses = initial cost + replacements + operating cost and extra labor - value of manure and progeny - value for the horses and PTO cart at the end of their useful life.=
Using this model, a tractor powered sustainable farm over a 40-year career would have total costs of $90,000 and total revenues (trade-in on old tractors every 10 years) of $20,000, for a net cost of $70,000 associated with using the tractor:
A horse powered farm over a 40-year career would have total costs of $61,200 and total revenues of $82,300, for a net revenue of a $21,100 associated with using horses;
A key concept here is that the use of a tractor is a classic cost function, while using draft horses for farm traction resembles a typical livestock revenue function, not a cost function. This relationship is dependent on taking advantage of the regenerative potential of horses. Think about it this way: If you are raising a lamb, calf, or colt crop on several acres, instead raise a draft colt crop on those same acres and the traction power is available to use if your horses are trained to work in harness.
From a cash flow aspect, the difference is even more pronounced and possibly even more relevant, as it is cash flow that is usually problematic.
Total revenue and cost for tractor and horsesThe difference between using horses and a tractor is $21,100 plus $70,000 equals $91,100 over a 40-year farming career:
Chet Kendell is on the Economics faculty at Brigham Young University - Idaho in Rexburg and a PhD candidate on the Viability of the Sustainable Agricultural Enterprise with emphasis on animal traction tillage from Michigan State University. This article appeared in the Spring 2005 issue of Rural Heritage.
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26 April 2012 last revision