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Off-farm jobs help keep many farms going

Most U.S. farms derive at least some income from off-farm employment, a USDA study found. Even large farms have a significant amount of off-farm income. Most off-farm jobs are in management and professional occupations.

Non-farm employment provides added cash flow, insurance

By Carol Ryan Dumas

Capital Press

Hollister, Idaho — Bob Lanting and his wife, Rhea, love farming and the rural lifestyle, but like most U.S. farm families, she works off the farm to provide added income and to obtain health insurance.

After they were married in 1971, the Lantings moved to his family’s farm near Hollister, a tiny town with 272 people in southern Idaho. They had just graduated from the University of Idaho, he with a degree in animal science and she with a degree in home economics education. There they would raise three children.

“We could live on love and Kool-Aid when we were just married,” Bob Lanting said.

Their operation, Lanting Enterprises, provided them with a home, food, fuel and money to cover the basics, and it allowed them to work together. But once the children — two girls and a boy — started heading off to college, the budget got tighter.

That’s when Rhea Lanting decided to apply for a full-time job with University of Idaho Extension Service. Though she had been working part-time for the Idaho Beef Council, college expenses loomed.

Her outside job and its health insurance became even more important when the farm’s health insurance premiums got so high they had to cancel their coverage.

The Lantings are typical of U.S. farm families, statistics show. Over the last decade, non-farm income has averaged 86 percent of total U.S. farm household income, according to the USDA. More often than not, farm families rely on outside jobs for added cash flow and for the benefits they offer, such as health insurance.

“You really can’t operate a farm or ranch without someone working outside,” Bob Lanting said.

Farms and ranches do accumulate assets and wealth, he said, but you can’t spend it and you can’t live off it.

The need for outside income is even greater for young operators, he said. The Lantings’ two daughters married ranchers and both have full-time, professional jobs off the farm.


Off-farm income


That most farms need outside income is the conclusion of a new report from the USDA Economic Research Service.

Non-farm income has contributed a larger portion of total U.S. farm household income over the decades, increasing from about 40 percent in the 1960s to as high as 95 percent in the early 2000s. Last year, about 80 percent of total income came from off-farm employment.

But two important factors are buried in those statistics, said USDA Economic Research Service economist Jeremy Weber. He and a colleague, Jason Brown, recently finished a report, “The Off-Farm Occupations of U.S. Farm Operators and Their Spouses.”

The first is how a farm is defined, he said. USDA’s broad definition of a farm is any place from which $1,000 or more of agricultural products are produced and sold, or normally would be sold, during a year.

That includes many people who are not engaged in production agriculture and would not consider themselves to be farmers, Weber said.

That group accounts for almost 91 percent of all U.S. farms, and it is not surprising that all of their income is from off-farm employment, he said.

But, he said, even households operating large farms often have substantial non-farm income, he said.

For example, operators of large farms — those with $250,000 or more in annual sales — get about 25percent of their household income off the farm, the USDA found.

The second factor, Weber said, is the term “income” doesn’t take assets into account. Many farms showing income losses year after year could also consistently be increasing net worth through the purchase of land or equipment, he said.


Off-farm occupations


Like Rhea Lanting and her daughters, nearly 36 percent of people working off the farm have management and professional occupations. For small farms — those with annual sales of less than $50,000 in annual sales — a high level of management and professional occupations is not surprising, considering that small farms with little to no production often represent highly educated people with large incomes, Weber said.

What is surprising, he said, is the prevalence of highly skilled, off-farm jobs in farm households with annual sales of $250,000 or more.

Nearly 45 percent of operators of those large farms with off-farm employment and nearly 44 percent of their spouses with off-farm employment held management or professional jobs. That’s 14 percent and 4 percent higher, respectively, than on small farms.

There are several possible reasons farm operators and their spouses are more likely to be employed in management or professional positions, Weber and Brown reported.

Households with those occupational skills may be more likely to enter the farm population, either because they have been able to accumulate enough wealth to begin farming or their skills are uniquely suited for managing a farm business.

In addition, managing a farm may have cultivated the skills that are valued and required in those occupations. Age-related experience might also have positioned older farm household members for management occupations, as farm operators and their spouses are, on average, older than the U.S. adult population in general.

When employed off the farm, operators primarily work in construction, agriculture, fishing, hunting and mining. Their spouses predominantly work in education or healthcare services.

Those differing occupations for farm operators and their spouses likely reflect differences in household and farm responsibilities, as well as how off-farm employment complements and meets key household needs, Weber and Brown stated.

For example, the household may be able to obtain health insurance through the spouse’s job, which could explain why so many spouses work in education and healthcare, fields in which those benefits are often offered.

After education and healthcare, the next most common sector for the spouse’s employment is in finance, insurance, real estate and other professional services, which could partly reflect the accounting responsibilities for the farm’s finances that spouses often assume, they said.

The farm operators’ predominant occupations are a likely fit, requiring mechanical and building skills and employing the use of trucks and heavy equipment.


Lifestyle choice


With their children out of college and on their own, the Lantings, now in their 60s, could live on either of their incomes, Bob Lanting said.

Rhea Lanting’s outside job provides insurance and allows them to travel, purchase items they wouldn’t otherwise be able to afford and visit and “spoil the grandkids.” But it also brings her a lot of personal satisfaction, she said.

“I love what I do and love the people I work with — or I wouldn’t be working,” she said.

With all their savings tied up in the farm, her outside job also provides security and the ability to amass a nest egg for potential health problems or any other crisis, Bob Lanting said.

The Lantings consider themselves fortunate. Rhea’s job gives them financial flexibility and the farm provides many of their needs and offers a lifestyle they enjoy and a great place to have raised their children, they said.



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