title: Agricultural Income and Finance Situation and Outlook Summary
author: USDA Economic Research Service
date: 15 June 1993
almanac-area: ers s-and-o
June 15, 1993
New Data Show Average Farmers' Household Income
Similar to Other U.S. Households
Most farmers and other household members earn income from farming
as well as from a variety of off-farm sources. The average farm
household earned a total income of $36,500 in 1991, compared with
the U.S. average income for all households of $37,900. Farm
operators' household income is an extension of income measures
used to examine the well-being of the agricultural sector. It is
a more appropriate measure of farm household well-being than
farm sector income.
In 1991, total income to farm operator households from farm
sources averaged nearly $4,000, compared with $5,742 in 1990.
Income from farming was down due a combination of lower prices
for most agricultural commodities and revised methods that allow
a fuller accounting for small farms, many of which have negative
incomes. These averages, however, mask wide diversity among
households. For example, about three-fourths of the over 2
million U.S. farms and ranches have gross agricultural sales
under $50,000. For these small farms, operating expenses
typically are larger than gross receipts. For the other 25
percent of farms (which produce over 75 percent of U.S.
agricultural products), income from farming is more important to
the household. For households operating these larger farms,
about $22,700 of their $43,600 household income came from
farming.
In general, the smaller the farm, the less the household depends
on income from farming activities. Many small farms lose money
on farming. Despite farm losses, however, households running
small farms had an average 1991 total household income of $34,000
due to off-farm income. This makes successful rural economic
development a key element in the future income situation of both
farm and nonfarm rural households.
Operations like dairies are most dependent on income from
farming, probably because they are so labor intensive that there
is little time for outside employment. Livestock operations
specializing in products other than milk or red meats were least
dependent on farming income.
This issue of Agricultural Income and Finance Situation and
Outlook also includes special research articles covering the
development of a sources and uses of funds account for U.S.
agriculture, the economic survivability of small hog operations,
the impacts of interest rates on farm businesses, and the impact
of taxing Social Security benefits of farmers.
Printed copies of Agricultural Income and Finance Situation and
Outlook will be available in about a week. For further
information, contact Bob McElroy or Jim Johnson at (202) 219-
0800. Text of the full report also will be available
electronically. For details, call (202) 720-5505.
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-- steven robert conn, systems analyst, /usda/es/cit/deit mail : 14th & indepedence room 3328s, washington, dc 20250-0900 voice : 202.720.8155 fax : 202.690.0289 internet: sconn@esusda.gov fts2000 : internet!esusda.gov!sconn genie : s.conn