Family Farming Linda McEntee

82% of U.S. ag family income comes from off-farm jobs

If ranching isn’t profitable, it isn’t sustainable. Are family farmers doomed or will they be able to adapt to the changing times?

Ranching today has its fair share of challenges, and if my kids have a chance of being the sixth generation of beef producers in our family, they may have to face some difficult realities.

I recently listened to a farm seminar hosted by our local ag lender. The event featured keynote speaker Kevin Van Trump, from “The Van Trump Report,” who offered insights on current agricultural market factors and how producers can best prepare for the trials and tribulations that may lay ahead.

One thing that Van Trump said was if farmers and ranchers are to survive in this fast-paced, ever-changing agricultural economy, they will have to do one of two things — increase productivity and decrease inputs by utilizing the latest technologies, or earning a premium for your product by either de-commoditizing what you produce or doing something innovative and out-of-the-box that nobody else is doing.

READ: 10 questions to ask at your next family business meeting

Easier said than done, of course, but if producers are to survive and thrive, they’ve either got to get bigger or they’ve got to do something unique that sets them apart in the marketplace.

In the meantime, you may want to get a job in town to cash flow your operation while you expand and innovate.

That’s the point that my husband Tyler and I are at in this stage in our lives. As we raise young children and expand our cow herd alongside my parents, the reality is we’ve also had to rely on off-farm income to make it work. This business requires a great deal of capital, and between Tyler’s full-time job as a farm manager and ag real estate agent and the time I spend writing for BEEF and speaking at agricultural conferences, we are able to pursue our dreams in agriculture one paycheck at a time.

A reader once told me that it’s ranchers who rely on off-farm income who are making it impossible for cattlemen to make a living solely off the land; however, I think the need for off-farm income for many ag families is a symptom of the changing times, not the cause of tighter margins and lower profitability.

But before I sound negative about production agriculture, let me say I’ve never been more optimistic about the cattle business than I am today. With emerging markets around the world, combined with domestic demand that is setting new records, now is a great time to be raising beef!

Despite my optimism, a recent article in the Wall Street Journal highlights the trend for farm and ranch families to rely on extra income from town to stay on their land and stay in business.

READ: To stay on the land, American farmers add extra jobs

According to author Craig Myrhe, “Most U.S. farm households can’t solely rely on farm income, turning what was once a way of life into a part-time job. On average, 82% of U.S. farm household income is expected to come from off-farm work this year, up from 53% in 1960, according to the U.S. Department of Agriculture.”

What’s more, the USDA recently reported that farm income will continue to drop even further over the next decade, necessitating the need for farm and ranch families to get a job in town. Combine that with escalating private health care costs and the increased cost of raising children in modern society and an off-farm job almost becomes a necessity, not an added luxury.

Today’s millennial producer has plenty of options to succeed in this business; however, between rising input costs, upfront investment and risk, the task can be daunting. I think Myrhe does a good job of bringing this issue to light, and I believe in the next 10 years, you’ll see more young producers like myself finding new and creative ways to make it work.

It may not look like dad or grandpa did it, but in order to be profitable in this business, we’ll need to think outside the box, utilize the latest technologies to improve our genetics and yields, be diligent in how we manage our finances and realistic in how our plans will cash flow.

It may not be easy, but it’s worth it. Now let’s get to work.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.

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