Reaping higher profits with lower costs

Amish make higher profits per acre than modern farmers.
MIDDLEFIELD, Ohio (AP) -- Sometimes newer isn't necessarily better.
By sticking to old-fashioned machinery, Amish farmers reduce costs and rake in profits much greater than their modern-day counterparts, according to a study by the Ohio State University Extension in Geauga County.
"Everything we know about modern agriculture says these farms shouldn't exist anymore," said Randy James, the extension agent who oversaw the two-year project. "But when you look at them, these are resilient businesses that seem to be surviving in an industry that's struggling."
James and his assistants compared the price of modern farm equipment to the price three small groups of Amish farmers in the Geauga Amish settlement estimated their equipment was worth. The researchers then used market prices to estimate the prices of the revenue from the crops.
Looking at net profits
The net profit per acre for an Amish farmer growing a type of wheat is $126, while the net profit for a conventional farmer growing a crop of oats with a comparable livestock nutritional value is $10, the study showed.
Startup costs are much lower for the Amish. While an Amish farmer will spend about $5,500 on five draft horses, a conventional farmer will spend $94,200 on a 160-horsepower tractor and $30,300 for a 75-horsepower tractor.
"It costs $2.30 a day for the Amish to operate a horse," James said. "You can't start a tractor for $2.30."
An Amish farmer spends about $20,000 equipping a 60-acre farm for grain harvest, while it costs around $350,000 to mechanize a 1,000-acre farm, according to the study.
But that works out to around $333 an acre for the Amish, compared to $350 an acre for the modern-day farmer.
"The cost on a per-acre basis is pretty close," Les Ober, who assisted with the study, acknowledged. "But when you start factoring in everything else in maintaining and working with this very, very technical and complex equipment we use in modern agriculture today, that runs the cost of that up considerably."
The results were no surprise to Paul Gaus, a College of Wooster chemistry professor and author of three mystery novels about the Amish.
"The whole point of their lifestyle is to live simply and frugally as close to the land as they can," Gaus said Thursday. "They have generations of experience on how to do this."
Following tradition
The 51,000 Amish in Ohio come from the Anabaptist religious tradition. They dress simply, shun most technology and travel country roads in distinctive black buggies.
The cost of running an Amish farm stays low because the Amish use their children as labor, and church members pitch in during harvest season, Gaus said.
However, comparing Amish farms to modern-day ones is a little misleading, he said.
"They themselves will tell you their gospel is to live the life of a peasant farmer," Gaus said. "They do sell their crops occasionally ... in most cases, they grow what they need for their family."
One modern-day farmer said Thursday it would be impossible for him to run his 1,000-acre farm using Amish techniques.
"Part of what makes our food system work and keeps the price of our food where it's at in the grocery store is our efficiency," said Kevin O'Reilly, a non-Amish who lives in a largely Amish area of Geauga County. "You only get to be efficient when you get to use mechanization and technology."