The Leelanau Peninsula, known as Michigan’s pinky, extends for 30-miles into Lake Michigan. The rolling hills and the lake’s insulating effect makes this place ideal for growing fruit.
Cherry farmer Phil Hallstedt said the landscape never gets old, but growing cherries is becoming more difficult.
“I don’t go to Vegas because I gamble every year,” Hallstedt said. “Cherries are so, so risky.”
After several tough years, Hallstedt has transitioned his farm to a U-Pick model, where people pay to harvest their own cherries. He also plans to further cash in on the region’s tourist economy by opening campsites on his land.
Hallstedt said his family made those changes after years of working part-time jobs and still struggling to make ends meet.
“Two years ago, I was ready to throw in the towel,” Hallstedt said. “And my wife said, 'I'm not,' and I love my wife, and I follow my wife. And so I was like, OK, I gotta figure this out. So together we're trying this new business model."
Only 37% of farmers held a primary job off the farm in 1974. Today, roughly 84% of family farmers rely on other jobs to support their livelihoods, according to a 2023 USDA study.
U.S. Secretary of Agriculture Tom Vilsack has said the increasing dependence on off-farm income is causing more small farms to sell, and the trend contributes to further farm consolidation.
Between 2017 and 2022, more than 140,000 farms closed down — most of which were from the smallest income category.
“The question I think we ask ourselves is simply, why is it that the farm family has to work multiple jobs?” Vilsack said at an August press conference. “Why can't the farm work harder and generate more farm income?”
Thinner profit margins
The cost of inputs like seed, fertilizer and labor have generally gone up, while prices for produce and grains are lower.
For Hallstedt, dealing with the risks, competition, low demand for fresh cherries and high cost of labor was just no longer worth the trouble.
“It cost about 35 cents a pound to grow tart cherries, and they paid them last year at 12 cents,” he said. “So every pound they picked, they lost 20 cents. You can’t sustain that.”
Daniel Munch, an agricultural economist with the American Farm Bureau Federation, said it’s harder for “little guys” to produce at the same price per unit as larger farms. Competing in a global market, Munch said, means farmers have to keep scaling up in order to be profitable.
“We're never in the position of saying it's bad that farms are getting bigger,” Munch said. “They're just doing it because that's what they need to survive in the marketplace we have now ... which is a harsh reality.”
Off-farm income isn’t necessarily a bad thing or a new trend, according to Alan Spell, an assistant extension professor at the University of Missouri. Spell co-authored a report on the importance of off-farm income to the ag economy in 2022.
He said off-farm income can come with health insurance benefits and more flexibility, along with more stability in overall income. Technological advancements have also reduced the need for constant on-farm labor.
“We also have more farmers than we would otherwise, because if [producers] just relied on farming, then we'd have a lot less people in farming because they just couldn't afford to make it,” Spell said.
The percentage of farmers making the majority of their income from the farm has declined overall, Spell said, but there is still some year-to-year variation depending on commodity prices and the labor market. Farm financing also varies across different regions.
“If you told a young person today, with no assets in farming, to go out and be a farmer, that would be a daunting demand for them,” Spell said. “The reality is they're going to need to rely on those other income sources, and that's going to give them the ability to grow that business over time.”
Supporting small and mid-size farms
In Nebraska, Vern Jantzen grows corn and soybeans and sells to a local co-op. He said the good news is that he’s debt-free, but he likely won’t break even from his crops this year.
“With an average yield and a below average price, it doesn't pencil out,” Jantzen said.
Along with a few odd jobs, Jantzen is also a substitute bus driver. While initially it wasn’t for the extra income, now he said he’s glad to have the job. He likens farming to the Cornhuskers, the University of Nebraska’s football team.
“We have had a terrible time for many years, but the thing that keeps us going as football fans is there's always next year,” Jantzen said. “And that's, I think, what keeps a lot of farmers going is, you know, there's always next year.”
Jantzen adds that farming is also a lifestyle, and hustling with side gigs is somewhat part of the job. He said he remembers his father selling insurance on the side and knows farmers who took on factory jobs in the winter.
But for small operations, there is a breaking point when on-farm income can’t keep up. Jantzen used to milk cows but after facing health issues in his herd and declining milk prices, he weighed his losses and decided to close down his dairy operation.
“How much equity, value do I have in my farm?” Jantzen said. “If you're borrowing money against that value, at some point in time, either the banker or your wife is going to say, ‘that's enough.’”
Jantzen, who is also the vice president of the Nebraska Farmers Union, said a huge obstacle to on-farm profits is a lack of competitive price discovery. He said antitrust laws like the Packers and Stockyards Act need to be better enforced to prevent a few companies from controlling prices and limiting competition.
“We're squeezing [farmers] out, and it's our whole agricultural industrial complex … stacked against the little guy,” Jantzen said. “And so it's amazing how many of them still figure out a way to work around it and make it work.”
Generating income ON the farm
While farmers are used to the ups and downs, some are exploring ways to differentiate their products and generate more income from their goods. That could help small and mid-size farms diversify and survive, said J. Arbuckle, a professor of rural sociology at Iowa State University.
“Farmer Jane can't walk into the local grain elevator and say, ‘Hey, my yellow #2 corn is better than farmer John's over there, so please give me a price premium,’” Arbuckle said.
Arbuckle said adding value to a product is a go-to method to earn a price premium.
“Berries, turn them into jam, or pigs, turn them into ham,” he said. “Adding a second or third crop that has a more local or a more niche market [is another method].”
Or if it’s an option, farmers can turn to agritourism like Hallstedt has in Michigan.
A new farm-stay ordinance in Leelanau Township will now allow working farms in the region to open up to four campsites on a minimum of 40 acres of land. Hallstedt, who advocated for the ordinance over the last four years, is jumping on the opportunity to add another stream of revenue.
“It’s not just for our farm. It’s for all [farmers] in Leelanau Township.”
Even if cherries don’t pay, Hallstedt said he doesn’t want to see local orchards sliced up and turned into housing subdivisions. In order to preserve farmland, he said we need to ensure farmers can stay in business.
“Once that house goes up, it’s gone. It will always be housing,” Hallstedt said. “We’re trying to avoid that. We love this land and believe it’s special.”
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest. It reports on food systems, agriculture and rural issues.
