Are Farmers Millionaires? Can You Become A Rich Farmer?
Farmers are not considered rich in a financial sense. Although both median farm operators’ household income ($83,111 in 2019 in the U.S.) and average farm household net worth ($1,042,855 in 2019 in the U.S.) were higher than those of the general population, farmers are not considered rich by most people standards.
Being rich or wealthy is, however, a very subjective thing. The person considered rich by some might not be considered rich by others. In the article, I will discuss a couple of different aspects that will help to understand if farmers are rich: income, net worth, and other aspects.
The Median Farmer’s Income
The median farm operators’ household income in 2019 in the U.S. was $83,111. That includes both the income from running a farm and off-farm employment. As about half of the U.S. farms are very small and generate less than $10,000 in annual farm sales, for most of the farmers, most of their income comes from off-farm employment.
As you can see on the chart below, the median farmer’s operator income has exceeded the median U.S. household income always since 1998.
That means that most farmers make a decent income. However, it is still not enough to be considered wealthy. To be considered an upper class in a general sense, a household needs to make at least double the median household income.
However, being financially rich or wealthy means for every person something else. So there are certainly many people that would consider farmers rich looking at their median income.
Average Farmers’ Income. Are Farmers Millionaires?
The average U.S. farm household wealth was $1,042,855 in 2019 and was 40% higher than this of the general population ($746,820). So one can say that the average U.S. farmer is a millionaire. A big part of why farmers’ net worth is so high is the cost of farmland they own, but also equipment.
Although the average net worth of a U.S. farmer is above one million dollars, according to Schwab Modern Wealth Survey, it takes $1.9 million in personal net worth to be considered wealthy. Still, there is plenty of people who would consider a person with a million dollars of net worth rich.
Farmers Might Be Considered Rich By Some
Being rich is a very subjective matter. For one person being rich might mean being able to fulfill basic financial needs – to pay for food, a place to live, and some basic form of transportation.
For another person being rich means having a private jet, a couple of very expensive cars, and a house worth at least a couple of million dollars. That brings me to the point that it’s quite difficult to give a general answer to the question “are farmers rich?” I think it’s best if you decide by yourself if you consider farmers rich after reading this article.
Most Farmers Generate Most Of Their Income From Off-Farm Employment
As I already mentioned in the article, about half of the U.S. farms are very small, with annual farm sales below $10,000. That means that most of the farmers generate most of their income through off-farm employment.
Looking at the chart, we can clearly see that, on average, only those farmers that make at least $350,000 of income annually make most of their income through farming. That proves that making a lot of money from a farm is not easy.
Like in the general population, there is a huge difference between farmers that have and make the most money and farmers that make much less. For most of the farmers, the farm is just an additional small income, as in 2019, the median household income from farming was just $296. That means that those farmers bring most of their money home by either working part-time or full-time jobs, by being self-employed, running a business, or in some other way.
There is, however, a small group of farmers that generate a lot of income just through their farming activities. Those farmers would be considered rich.
Running a Farm Might Be Risky
Running a farm is riskier than having a job. A farmer needs to invest in seeds, fertilizers, and also equipment, and plenty of other costs, without having a guarantee that this investment will be profitable.
A big risk for crop farmers is bad weather. It can be anything like drought or too excessive rain or frost. There is also a risk of insects destroying a significant part of the crop. There are some ways farmers try to mitigate that risk, e.g., by buying insurance against bad weather. But that’s the additional cost the farmer needs to consider if he decides to protect himself/herself that way.
Another risk is what price you will be able to sell the crop for. Some farmers protect themselves by having contracts signed in advance, but it’s not always possible. Therefore it may turn out that a farmer needs to sell his crop with very little profit or even a loss.
Can You Become Rich By Running A Farm?
You can become rich by running a farm. But like with any business, this will require a lot of hard work and probably a lot of time. Some types of farming, like conventional crop farming, will usually require a lot of farmland to make significant amounts of money. This will mean you will need to make a significant investment upfront to either buy or lease that land. And also to buy or lease the equipment.
But there are some other types of farming that don’t require nearly the same amount of farmland. One of them is called hydroponics. When using that method, the roots of plants are not planted in soil but in nutrient-rich water. This method allows higher yields and actually uses much less water than traditional soil-based farming.
Another interesting method is called aquaponics. Aquaponics is a technique of growing both aquatic animals (usually fish) and plants in the same ecosystem. Animals discharge their waste, and that’s what plants use for their growth. In return, the plants clean the water from the animals’ waste.
Are Farmers Outside of U.S. Rich?
Unfortunately, in most countries around the globe, farmers are not rich. In many of the developing countries, they are actually considered poor. E.g. in Thailand, 40% of farming households live below the poverty line. That’s a big issue that is not easy to solve.
The problem for those small farmers is that often they do not have enough money to make investments needed to increase their production and profitability. It might be difficult for these small farmers using basic tools and equipment to compete with large-scale farms with a much higher degree of automation.
Are Farmers Happy?
There are other more important factors in life than being rich. According to the survey by CareerExplorer, farmers rate their happiness above average. It might be connected to the fact that, as countless studies have shown, being outdoors is good for mental health. Interestingly, farmers also have a lower than average rate of divorce.
And for many people, happy life is much more important than having a lot of money. Therefore, although becoming a farmer will probably not make you an overnight millionaire, but may have some other benefits.