In a new report, a UW-Madison economist calls for creating and maintaining “off-farm employment opportunities” to help ensure the survival of Wisconsin farms.
The Division of Extension report was authored by Prof. Steven Deller, with the university’s Department of Agricultural and Applied Economics.
Citing a recent analysis of the latest national Census of Agriculture, the report notes the number of farms in the state has fallen steadily over the past two decades, from 77,131 in 2002 to 58,521 in 2022. The drop for dairy farms is “even more dramatic,” he wrote, falling from 16,886 to just 6,216 over the same period.
“Several factors contribute to this trend, including the aging farm population and the high costs of starting a farming business for younger farmers,” Deller said. “A critical reason for the decline is that many farms are unable to generate sufficient income to support a farm family or household.”
Some farm families turn to other work while continuing to farm in order to supplement that income, often obtaining health insurance through these off-farm jobs, the report shows. On average, about 79% of farm family income in Wisconsin came from off-farm sources between 2018 and 2022, based on findings from the USDA Agricultural Resource Management Survey.
But this trend is heavily influenced by the size of the farm, Deller noted, as off-farm income for farms with sales of $1 million or more made up about 15% of their total farm family income. Smaller farms with sales less than $100,000 averaged 102.5%, “indicating that off-farm income is not just supplementary but is also supporting the farm enterprise itself.”
He argues these farming operations wouldn’t be sustainable without such income, noting about three-fourths of farms in the state fall under that smaller farm category. While 3.7% have sales between $500,000 and $999,999, another 3% have sales of $1 million or more.
Deller says rural communities dependence on farming “has reversed,” with typical farms in the state increasingly relying on their surrounding communities and the opportunities for work that they provide.
“Therefore, an immediate strategy to help ensure the survival of many Wisconsin farms is to create and maintain off-farm employment opportunities,” he wrote.
See the report.