How Important Is Off Farm Income For Smaller Operations?

How important is off farm income to small family farms?

“A lot of these small farms typically rely more heavily on off farm income,” according to USDA economic researcher Christine Whitt.  She added 45% of principle farm operators, regardless of farm size, also have an off farm occupation. As do the same percentage of spouses.  Many of those with off farm jobs doing so to obtain health care benefits.

Despite the income coming in to the household outside of the farm,” We see that these small farms have a greater share of farms in what we call operating profit margin red zone and this is our high risk zone and they typically have an operating profit margin of less than 10%.” Whitt said.

“The fact that they're in the Red Zone of this operating profit margin does not necessarily mean that these farms are in financial crisis because this of farm income component is not captured in our calculation of the operating profit margin,” she added.

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