Draft Animal Farming






Economics of Farming with Horses
Assumptions** (part 2 of 7)

by Chet Kendell

My assumptions include a diversified farm of approximately 25 to 30 acres, operated with an ecological and sustainable consciousness. This farm utilizes methods such as cover cropping, limited tillage, minimizing off-farm inputs, integrated pest management, crop and landscape diversity, community cooperation, and direct marketing. This type of farm generally has slower and lower power requirements than a larger, less diversified operation.

For estimated equipment operating costs I use as a reference Doane's Agricultural Report, volume 63, number 34-5, August 2000. The tractor costs from my own operation are consistent with this report, but conservative. My operational costs for using horses are also conservative, which may be typical of the agricultural practices of sustainable small farmers in general. From what I have seen, most other sustainable farmers operate their farms in a conservative manner, especially when compared to conventional agricultural practices.

  • The Work Horse Handbook identifies as an appropriate rule of thumb to use two horses for 40 acres. My analysis uses two horses for 25 acres, and again is deliberately conservative.
  • Tractor power needed per acre farmed is 1.4 horsepower.
  • Horses needed per acre farmed are .08.
  • Using horses requires an additional 20% total labor time. An obvious learning curve is involved here for both horses and human. Don't expect this 20% relationship to hold the first time in the field with horses. Patience, practice and perseverance will be virtues.
  • Tractor is new, 35 hp without loader, at a cost of $15,000.
  • Horses are two Belgian mares, 5 years old, pregnant, with harness and PTO cart at a total cost of $8,000
  • Support equipment and garage/barn facilities for a tractor or horses have equivalent costs.
  • The horses have colts 4 years out of 5.
  • The initial team of horses is sold at 15 years old for $1,000 each and replaced by progeny.
  • Tractor is traded for a new one every 10 years (5,000 hours), with a trade-in value of $5,000.
  • Horse manure and urine offset chemical fertilizer costs by $365 per year. This value is difficult to assess. Most studies look only at the nitrogen value of manure, but the total effect on the soil and the farm is much greater than just the nitrogen value. The $365 per year is my best estimate at one-half of the operating cost.

Yor farming operation undoubtedly has different values to substitute, and you may readily customize my analysis for your own situation. This analysis looks at the two options only from a cash basis, as cash flow often causes the most problems, and many farmers are debt adverse and/or do not have ready access to debt financing. The farm owner, as the tractor operator or horse teamster, takes wages from farm profits. rh horse logo

Introduction
Career Cost of Horses versus Tractor
Farm Size
Practicalities
Operational Cost for Horses
Debt Financing

**Because Chet Kendell wrote this economic comparison of tractor versus horse farming in 2005, the figures will need to be adjusted to reflect present values. That said, we believe its fundamental conclusion, that tractor farming incorporates a negative cost function that decreases profits while horse farming includes a livestock production function that boosts its economic outcome.

Author

Chet Kendell was on the Economics faculty at Brigham Young University - Idaho in Rexburg. He currently owns Kendell Innovative Dairy Systems LLC in Idaho and lives, farms and writes with his family in Ashton, Idaho. This article appeared in the Spring 2005 issue of Rural Heritage.


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