How a farm family fares financially depends not only on how much it earns from farming, but also on how much it relies on that income, according to agricultural economist Ed Jesse, writing in Status of Wisconsin Agriculture 2006.

In 2004, the U.S. Department of Agriculture counted about 75,000 farm households in Wisconsin. On average, these households reported total income of more than $81,000, but less than$9,500 – or 11.6 percent – of it came from farm-related activities. But these averages mask big differences in farm types and in sources of household income, says Jesse.

• Nearly half of Wisconsin farms were residential/lifestyle farms – the operators claimed an occupation other than farming and their gross sales of farm goods were less than $100,000. They had an average household income of more than $113,500 but a farming loss of $3,700. Deleting these farms from the data significantly changes the ratio of farm income to total income for the rest of Wisconsin farm households: Average farm income rises to $20,450, non-farm household income decreases from $71,813 to $33,900, and total household income decreases to $54,300.
• About 10 percent of farms are retirement farms (operators say they are retired). These averaged $60,000 in nonfarm income, primarily from pensions, social security, and investments. Net income from farming added another $5,000 to these house-holds” income. They reported farm assets of less than $150,000, farm sales less than $100,000, and household income under $20,000. These farms averaged $7,700 in total household income and had a negative farm income of $2,900.
• Another 15 percent of households claiming farming as a primary occupation had farm sales under $100,000 but didn”t meet the criteria of limited resource farms. They reported a total household income of $40,000, nearly all of which came from non-farm sources. “These small commercial farms are clearly struggling financially,” Jesse said.
• Less than 20 percent of Wisconsin farm households reported annual sales exceeding $100,000 in 2004. Farms with sales between $100,000 and $250,000 had average household incomes comparable to the average for all U.S. households (about $60,000) with 54 percent coming from farm income.
• Wisconsin had about 2,000 farms with sales over $500,000 in 2004. Average household income for these operations was $157,303, of which 83 percent came from farming.