Off-Farm In­come Is Key

Successful Farming - - PRODUCT TEST TEAM -

Su­san Wis­mer re­mem­bers an econ­omy largely based on in­de­pen­dent busi­ness­peo­ple like farm­ers when she grew up on her fam­ily’s farm near Brit­ton, South Dakota, in the 1960s and 1970s.

These days, wage earn­ers are a much larger part of the ru­ral econ­omy. Fac­to­ries like Brit­ton­based Hor­ton, a man­u­fac­turer of en­gine-cool­ing so­lu­tions, are eco­nomic life­lines for the area.

“So many farm­ers in the 1980s (agri­cul­tural down­turn) went to work at Hor­ton so they could buy gro­ceries and have health in­sur­ance,” says Wis­mer, who rep­re­sents four north­east­ern South Dakota coun­ties in that state’s House of Rep­re­sen­ta­tives. “It al­lowed them to stay on the land and farm it.”

Off-farm in­come is vi­tal in help­ing ru­ral ar­eas re­tain farm­ers and res­i­dents. David Pe­ters, an Iowa State Univer­sity Ex­ten­sion ru­ral so­ci­ol­o­gist, sum­ma­rized in­come trends for Iowa farms and farm fam­i­lies from 2003 to 2015. He found off-farm in­come was vi­tal for two types of farms.

In­ter­me­di­ate farms rep­re­sent 29.6% of all Iowa farms. They ac­count for 11.8% of pro­duc­tion val­ues, but have lower sales and smaller acreages (220 acres per farm).

Res­i­dence farms ac­count for 46.1% of Iowa farms. They pro­duce only 8.3% of sales and have small acreages (118 acres per farm).

What keeps res­i­dence farms in busi­ness and with high in­comes – $115,941 in 2015 – is well­paid, off-farm work, says Pe­ters. Mean­while, house­hold in­come for in­ter­me­di­ate farms was $83,138 in 2015. Of that, 66.2% was from off-farm work.

“A strug­gling farm econ­omy only high­lights the need for non­farm em­ploy­ment op­por­tu­ni­ties for all farm fam­i­lies,” says Pe­ters.

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