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The cheapest farm equipment in Pennsylvania is the kind that makes its own replacement

American farms will owe $624.7 billion this year, and the county that feeds Philadelphia still runs on farms averaging seventy seven acres.

By Harry Hayman 8 min read
The cheapest farm equipment in Pennsylvania is the kind that makes its own replacement

A new combine costs more than the median house in Philadelphia. I say that out loud to people because it does not sound true until they check it, and then it turns out to be worse than they guessed. Buyer guides put a current self propelled machine somewhere between four hundred thousand dollars and eight hundred thousand, and the 2025 market reporting on combine prices has high specification machines clearing that upper figure before anyone has bought a header to hang on the front of it. Almost nobody writes a cheque for that. It is a loan. And the loan has a habit of outliving the machine, the crop year, and sometimes the person who signed it.

I have spent a lot of the last few years arguing that food is infrastructure. This is the part of that argument I think we skip. We talk about yield and we talk about acreage and we talk about weather, and we almost never talk about the financing, which is the thing that actually decides who is still farming in ten years.

The number nobody puts on a poster

The USDA’s Economic Research Service publishes a forecast of what American agriculture owes, and the May 2026 release is not a comfortable read. Total farm sector debt is forecast at $624.7 billion for 2026, up 5.2 percent in a single year. Farm real estate debt alone reaches $404.3 billion, with non real estate debt at $220.4 billion. The solvency picture moves with it: the debt to asset ratio rises to 13.75 percent from 13.49 percent, which is the technical way of saying that what farms owe is growing faster than what farms are worth. All of that sits in the ERS assets, debt and wealth data, and the divergence between the two kinds of debt is charted separately in the agency’s note on record farm real estate debt.

The American Farm Bureau’s read on the same period is that producers are borrowing to manage operating costs and uneven cash flow, in a stretch where farm income has been revised down and the weakness is expected to carry into next year. Borrowing more to cover the gap while the gap gets wider is not a farming problem. It is a balance sheet problem that happens to be wearing boots.

And interest is not a rounding error inside it. The agricultural economists writing in Choices on labor and interest expenses treat both as first order costs, the kind that decide whether an operation clears or does not. When people ask me why the small farm disappeared, they usually expect me to say the supermarkets did it, or the weather did it, or the young people left. Sometimes. But the note did a lot of the work.

The farmer who could not buy the farm

Tim Biello started farming in 2006. He bought his first team of Percheron draft horses in 2010, at roughly the same time he began looking for ground he could afford. That search went nowhere for years, which is the part of the story people skip.

What broke the deadlock was not grit. It was structure. As Lancaster Farming reported in its 2024 profile of the farm, Biello connected with a social impact farmland investment group, the Local Farms Fund, and built a lease with an option to purchase, with a trigger at year five. Attorneys, a business plan, and a patient investor got him onto land that a conventional purchase never would have.

He and Jamielynn Biello now run Featherbed Lane Farm on 63 acres of fields, woodlands and wetlands in Ballston Spa, New York. Four draft horses, a year round CSA that started in 2017, and four people employed. It is, by their own description, the only farm in Saratoga County using draft horses as a primary power source.

Two decisions are doing the work there, and neither of them is about yield. One is how the land was financed. The other is what pulls the equipment. Both are capital structure, and both are the reason the farm exists at all.

Sixty miles west

Now drive out of the city on the Turnpike for about an hour.

Lancaster County is the number one agricultural county in Pennsylvania, and it is not a close race. The Lancaster County Agriculture Council counts more than five thousand farms out there, with an average size of seventy seven acres and ninety nine percent of them family owned. Seventy seven acres. Not seven thousand. Two thirds of those farmers use minimum tillage practices, and the county was the first in the nation to preserve one hundred thousand acres of farmland. The USDA’s own county level census data for Pennsylvania carries the same picture in the federal numbers.

A serious share of that ground is still worked by horses.

I know exactly how that sounds. It sounds like a postcard on somebody’s fridge. It sounds like a buggy ride and a whoopie pie and a gift shop. That framing is wrong, and it is wrong in a way that costs us something, because it lets us file a working economic model under tourism and stop looking at it.

What a horse actually is on a balance sheet

Here is the whole thing in two sentences. A tractor depreciates. A horse multiplies.

A machine leaves the dealership worth less than you paid, loses value every year you own it, and carries a payment book that does not care what the weather did. A mare does the opposite. She works, she costs feed, and every so often she produces the animal that replaces her. Nobody has ever repossessed a foal. There is no dealer markup on hay you grew on your own ground, and no financing package attached to a strap you mended in your own barn.

The cost gap has been measured, though the honest version comes with a date on it. Ohio State University Extension put together budgets comparing the two systems, and LNP reported the results in an article on whether Plain farming is more profitable per acre. The figures were striking: about $94,200 for a 160 horsepower tractor and another $30,300 for a 75 horsepower one, against roughly $5,500 for five draft horses, with an entire sixty acre farm equipped for around twenty thousand dollars. I want to be careful here, because that study is from 2003 and those are 2003 prices. I am not quoting them as today’s market. I am quoting them as the shape of the difference, which has not reversed.

The part I am not going to pretend away

Horses cost labor. That is the counterweight, and anyone who skips it is selling something.

The same LNP piece carries the local extension office pushing back, and the pushback is fair. Animals need care that a parked machine does not. A team is slower. Production per acre can be lower. The county extension director in that article makes the point that these are two systems with different objectives, and that comparing them cleanly is difficult, which is true.

What the comparison misses, I think, is that labor and debt are not the same kind of cost. Labor is elastic. It can be absorbed by a family, spread across a season, traded between neighbours. Debt is rigid. It arrives on a date whether or not it rained. The Plain communities pay in hours that most of us would not, and in exchange they hold something a lot of American agriculture has lost, which is the ability to have a bad year without losing the farm.

Why this is a Philadelphia story

Because that ground is where a lot of this city’s fresh food comes from.

The route is less romantic than the postcard suggests and more interesting. Plain growers move produce through co operatives and wholesale channels rather than selling it themselves, an arrangement described well in The Counter’s reporting on how Amish produce reaches urban grocery buyers, with intermediaries handling the marketing, the transport and the buyer relationships. The vegetables land on tables here, at Reading Terminal Market and at farm stands and in CSA boxes, and most people eating them have no idea they are eating the output of a capital structure decision made decades ago.

So the practical thing, and I do mean practical, is to shorten the distance between the person who grew it and the money. Buy from a farm stand. Join a CSA. Ask a market vendor whose farm it came off. It is a small act and it does not fix the debt forecast, but it is the one lever an ordinary person actually holds, and it sends money to operations that are not carrying a note the size of a mortgage.

We keep asking why the small farm vanished and we keep answering with yield. It was never really yield. It was the note.

Sources and references

Every figure above comes from one of these, and each is linked where it is used.

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