ERS compiles several measures of economic well-being using data from the Agricultural Resource Management Survey (ARMS). The well-being of farm-operator households is determined by a combination of on and off-farm activities. ARMS-based indicators of economic well-being center on the households of principal operators of family farms. ERS uses several classifications of farm operator households (farm type, gross sales, and commodity specialization) when reporting indicators of economic well-being, which include:
- Income: households receive income from farm and off-farm sources:
- Onfarm sources—income from farm sales and 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 households reporting negative onfarm income.
- Off-farm sources—including wage income, non-farm businesses, dividends and transfers—are the main contributor to income for the majority of farm operator households in the United States today. 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.
- 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 five-year period ending in 2013. Onfarm assets and liabilities have both increased over this time, with the largest increase occurring for commercial farms (see glossary). Nonfarm debt has increased, both in the percentage of farms with nonfarm debt and the average (median and mean) debt burden for these households.
- Access to health care
- Compared with U.S. households in general, a greater proportion of farm households have health insurance. Nevertheless, many farm households do not have access to health insurance, especially among certain commodity specializations. Please note that the latest statistics contained in these pages do not reflect coverage changes from the Affordable Care Act of 2010.
NOTE: There are several stakeholders in farming in addition to farm operators, such as landlords and contractors. Farm operator households often have nonfarm investments, jobs, and other links to the nonfarm economy. Given this, when considering the statistics on this site, it is important to know that the well-being of farm operator households is not equivalent to the financial performance of the farm sector or of farm businesses.