One of the major choices affecting the financial well-being of farm households is how farm operators and their spouses allocate their labor to farm and off-farm work. Among this chapter's highlights:
- Farming is not the single career choice for most farm households. Off-farm employment is increasingly common for both farm operators and their spouses.
- Job choices link household well-being to the broader economy; farm operators and spouses work in a variety of business types.
Many household decisions, including labor allocations, depend on the age of the operator/spouse. See information on age structure in the Beginning & Disadvantaged Farmers topic for more.
Labor Allocations of Operators and Spouses
One distinguishing feature of family farms is that the farm family commonly provides most of the labor used on the farm. Principal operators, their spouses, and unpaid workers provide more than two-thirds of the farm labor hours used on family farms. As farms grow larger, however, farm operators increasingly rely on hired labor. While very small farms (gross sales less than $10,000) and middle-size farms (annual gross sales of $10,000-$249,999) have limited use of hired labor, the average large farm (gross sales of $250,000 or more) depends on hired labor for more than 40 percent of its total labor needs.
Farming is not the single, nor even primary, career choice for most farm households. Farm operators and their spouses often allocate their time to off-farm work activities, either working for wages/salaries or operating a nonfarm business. Sometimes this activity is where they spend most of their work time, and sometimes it is secondary to their farm work.
A straightforward indicator of how farm operators and spouses allocate their time is what they consider to be their major occupation, or the work activity in which they allocate the majority of their work time. Operators were almost as likely to identify nonfarm work as farming or ranching as their major occupation (see table on the finances and characteristics of principal farm operator households, by major occupation, 2011 ). Some operators indicated that they were not in the workforce; most of these operators also indicated that they considered themselves to be retired. When a spouse is present, the spouses of operators are as likely to work off farm as the principal operator.
When they work off the farm, farm operators and their spouses work in a variety of industries. The most common industries for operators with a wage and salary job are agriculture and other natural resource-related industries, construction, and retail sales. Spouses with off-farm wage and salary jobs are most commonly employed in a few industries--20 percent work in education, 15 percent work in retail sales, and 21 percent work in the health services area. When operators or spouses are self-employed in businesses other than their farm, they are most commonly engaged in retail and service industries.