By Stan Maddux   

Indiana Correspondent

WASHINGTON D.C. – About three out of every four U.S. farm households relied on off-farm incomes in 2023 as a buffer against market volatility and sustaining their rural livelihoods. That’s according to the latest “Market Intel” report by the American Farm Bureau Federation.

Two Indiana farmers were not surprised but feel the percentage is probably similar in all U.S. households.

“It takes two incomes now to get by,” said Mark Parkman, who raises corn, soybeans, hay and cattle in the Westville area.

Matt Schafer, of LaCrosse, said he feels the statistic could be a little misleading, though, because some farms are not large enough for a full-time living and spouses choose to work sometimes out of preference.

“It’s not necessarily that they have to,” he said.

Schafer, who raises corn and soybeans, said he has always been able to bring in enough income working full-time as a farmer, allowing the mother of his children to stay home, and then reenter the workforce at her choice when the kids became older.

“It’s always nice to have that second income,” he said.

AFBF Economist Daniel Munch said 77 percent of farm household incomes two years ago relied on incomes from sources other than producing food, fiber and fuel.

“About 72 percent of off-farm income in recent years has come from earned sources, including wages and salaries and non-farm business income. The remaining 28 percent has come from unearned sources like Social Security, veterans’ benefits, pensions, dividends and interest,” he said.

Munch said smaller farms measured by gross cash farm income, including government payments, tend to be more dependent on off-farm employment.

He said over 60 percent of principal operators on farms with less than $100,000 in annual gross sales worked at least one day off the farm while the number dropped to 45 percent or less on farms with more than $500,000 in gross sales.

“On the flip side, larger farms typically require full-time attention and labor from operators, making off-farm work less feasible. Still, across all farm sizes, a notable share of producers rely on income from beyond the farm gate,” Munch said.

According to the report, the statistics are based on USDA’s broad definition of a farm, which includes any operation down to very small scale and lifestyle farms with more than $1,000 in ag product sales.

Nevertheless, Munch said the amount of income off the farm highlights the vital role it plays in keeping farm households financially afloat.

According to the report, median off farm income in 2023 was just slightly below $80,000 compared to a median farm income of $900 that same year.

The report also revealed the need for off-farm income was greater among younger and beginning farmers defined as 35 years or younger or those with less than 10 years of farming experience.

Twenty percent of young farmers and 24 percent of beginning farmers reported working exclusively on the farm compared to nearly 40 percent of all farmers.

In many cases, Munch said off-farm jobs help cover things like start-up costs.

“This trend reflects the steep financial climb facing new entrants to agriculture.  Without inherited land, equipment or equity, it’s difficult to rely solely on early farm earnings,” Munch said.

In many cases, he said off-farm jobs can also mean the difference between access to health insurance and other benefits.

According to the report, off-farm income varies greatly by farm type, reflecting factors such as labor demands, availability of automation, production schedules and income volatility across commodities.

Dairy farm households were most reliant on income earned from the farm itself with 81 percent of their household income in 2023 coming directly from farming activities, according to the report.

Next highest was households raising corn at 58 percent of income from strictly farming. The other numbers ranged from 43 percent of households raising specialty crops to 10 percent of households raising cattle receiving their incomes strictly from food production, according to the report.

Parkman, president of LaPorte County Farm Bureau, is also a contractor excavating dirt for housing and other developments. He began doing that in 1988 after purchasing his first backhoe.

It wasn’t until 12 years later that he broke into farming by using 500 acres of land and a few tractors he already owned for his excavating business. He then bought a no-till drill to plant soybeans.

“By harvest, I had a combine. I went about it a completely different way,” he said.

Farming wasn’t totally new to Parkman, who earned money in high school by feeding veal calves at a couple of farms and later hauling grain.

His wife also grew up on a nearby dairy farm.

“Farming in my opinion is quality of life. It’s time well spent,” he said.