Off-Farm Income Is Key
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.