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Image: Farm Economy


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ERS compiles several measures of the economic well-being of farm households using data from the Agricultural Resource Management Survey (ARMS). The well-being of farm-operator households is determined by a combination of onfarm and off-farm activities. ARMS-based indicators of economic well-being center on the households of principal operators of family farms (see glossary for definition). It is important to keep in mind that the well-being of farm operator households is not equivalent to the financial performance of the associated farm business or of the farm sector generally. Several stakeholders in addition to farm operators—such as landlords and contractors—that have a claim on the net value that agriculture adds to the economy. In addition, farm operator households often have nonfarm investments, jobs, and other links to the nonfarm economy. Key indicators of economic well-being reported here include:

  • Income (farm-operator households receive income from farm and off-farm sources):
    • Onfarm sources—income from the farm business—are determined by farm costs and returns, based on prices of inputs and outputs. These costs and receipts often vary from year to year, with a significant number of farm households reporting negative farm income in any given year.
    • Off-farm sources—including wage income, nonfarm business earnings, dividends, and transfers—are the main contributor to income for the majority of farm operator households in the United States. These households, which derive less than half their income from farming, are not as affected by changes in farming costs and returns, but may be more susceptible to changes in the broader economy.
  • Wealth
    • The net worth of a farm household is the sum of all farm and nonfarm assets, less farm and nonfarm debt. The median net worth of farmers rose steadily over the 5-year period ending in 2014. Onfarm assets and liabilities have both increased over this time, with the largest increase occurring for commercial farms (see glossary). Nonfarm debt has increased in terms of both the percentage of farm households with nonfarm debt and their average (median and mean) debt burden.
  • Health insurance
    • Compared with U.S. households in general, a greater proportion of farm households have health insurance. Nevertheless, many farm households involved in certain commodity specializations do not have health insurance coverage. (The latest farm household statistics available do not reflect coverage changes following implementation of the Affordable Care Act of 2010.)

Last updated: Tuesday, November 24, 2015

For more information contact: Daniel Prager