Living on the farm is always subject to the vagaries of nature. If you’re farming to earn income, life is also subject to changes in the marketplace and in the policy realm. This graph follows the fortunes of farmers who own their farms. The proprietors’ income series shown here, for farms, is adjusted for inflation and tracks revenue that farm owners receive from their investment in land, machinery, and structures as well as the fruits of their own labor. (NOTE: When you want to divide national income into labor income and capital income, you’re left with a chunk you can’t attribute: proprietors’ income. That’s because they earn both kinds of income but don’t pay themselves a salary.)

The graph shows that proprietors’ income in the agricultural sector is quite volatile. Moreover, recessions have been particularly tough on farmers—their income almost reaches zero in 1983:Q3! But clearly other shocks also affect their income. In fact, one senses there’s a long-term downward trend here. It’s possible that the conditions of a relatively small number of (smaller?) farms may be driving this trend. Even if average farm size has grown over time, it seems that average farm income has not.

How this graph was created: Search FRED for “farmer income” and choose the relevant series. From the “Edit Graph” menu and then the “Customize data” feature, search for and add “CPI” and apply the formula a/b*100.

Suggested by Christian Zimmermann.