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Pulling the trigger on an off-farm job

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The decision is not just about numbers for some.

A young, beginning producer asked me an intriguing question that is often very relevant with this age demographic. “When is it a good time to pull the trigger and abandon my off-farm job to work full time on the farm?”

This question is never easy because the competitive marketplace for agriculture is very fluid with surprises around every corner. Generally speaking, it is a positive signal if your farm business can consistently generate between $40,000 and $70,000 in net farm income; however, there are also other factors that need to be considered.

Next, you must equate these bottom line results to your standard of living. Producers with more lavish lifestyles or financial demands such as large families, adult care, or medical expenses will often require $70,000 or more of net farm income to cover living expenses. On the other hand, producers who are frugal or have fewer financial demands may only require $40,000 of net farm income.

One will notice that the number of acres, amount of livestock, or revenue are not in the equation. The metric that is more important in this decision is the bottom line profit, regardless of the size of the business. Note that if multiple families are relying on the farm business for their living, then $40,000 to $70,000 in net farm income is a guideline per family unit.

Producers must also consider which perks will be given up by pulling the trigger on off-farm employment. For example, many are employed off the farm to have medical coverage and other insurances at a reasonable cost. Some employers also offer attractive retirement programs, which can add up over time.

Another factor one must consider is the cost of employment such as travel, daycare, meals, etc. These expenses are often not properly valued in the equation.

Finally, many enjoy off-farm jobs for the social interaction and the ability to utilize skills and experiences garnished over the years. The element of time management and the balance of the off-farm job with farm, family, and personal needs must be brought up in this analysis.

In summary, the decision about the numbers is important, but other non-quantifiable factors are just as important. Given the current economic times in agriculture, many are maintaining a diversified income stream with outside earnings.

The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.


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