What if you could see exactly how agriculture shapes state economies—and identify which states depend on farming versus those with diverse nonfarm economies? This analysis reveals the role of agriculture in state economies and how it affects overall income levels, helping you make location decisions based on industry composition.
The data shows dramatic differences: some states derive 5%+ of income from agriculture, while others are almost entirely nonfarm. Understanding these patterns helps you identify states with economic structures that align with your business model.
Key Takeaways
- Farm income share varies dramatically by state—ranging from <1% to 5%+ of total income
- Agricultural states have unique economic structures—states with high farm income share have different business opportunities
- Nonfarm income dominates most states—95%+ of income is nonfarm in most states, showing diverse economies
- Industry composition affects business opportunities—understanding farm vs. nonfarm split helps identify compatible markets
- Location strategy should consider industry mix—matching your business to states with appropriate industry composition maximizes success
Key Takeaways
- Data-driven insights on farm vs. nonfarm income: agricultural state economics (2010-2023)
- Comprehensive analysis using official government data
- Actionable information for business planning
- State-by-state comparisons and rankings
- Expert guidance on business location decisions
Understand the role of agriculture in state economies and how it affects overall income levels. This analysis reveals which states depend on farming and how nonfarm income compares. Make l
Table of Contents
This analysis compares farm and nonfarm income across all 50 states from 2010-2023 using official BEA data. You’ll discover which states depend on agriculture, how nonfarm income compares, and what this means for business location decisions based on industry composition.
What This Analysis Shows:
- Farm income share by state (2010-2023)
- Nonfarm income share showing diverse economic activity
- State rankings by farm income share
- Time-series trends showing how agriculture’s role has changed
- Industry composition analysis revealing economic structure
Why This Matters: Understanding the farm vs. nonfarm income split reveals each state’s economic structure. States with high farm income share have agricultural-focused economies with different business opportunities than states with diverse nonfarm economies. This directly impacts which states are compatible with your business model.
Overview
This analysis compares farm and nonfarm income using CAINC4 data with two key line codes:
- LineCode 2 - Nonfarm Personal Income - Income from all sources except farming, showing diverse economic activity
- LineCode 3 - Farm Income - Income from agricultural activities, showing agricultural sector contribution
We examine:
- Farm Income Share - Percentage of total income from agriculture
- Nonfarm Income Share - Percentage of total income from non-agricultural sources
- State Rankings - Which states have the highest farm income share
- Time-Series Trends - How agriculture’s role has changed from 2010-2023
- Economic Structure - Whether states are agricultural-focused or diverse
The Bureau of Economic Analysis tracks farm and nonfarm income separately through their Regional Economic Accounts. This analysis spans 2010-2023, allowing us to identify both current structures and long-term trends in agricultural economics.
What This Means for You
For Industry Alignment: States with high farm income share (3%+) have agricultural-focused economies. If your business serves agriculture, these states offer more opportunities. If not, you may prefer states with diverse nonfarm economies.
For Economic Structure: Understanding farm vs. nonfarm split reveals economic diversity. States with 95%+ nonfarm income have diverse economies with multiple opportunity sources.
For Market Opportunities: Agricultural states offer specific opportunities (farm equipment, agricultural services, rural markets), while nonfarm-dominant states offer broader business opportunities.
For Location Strategy: Matching your business model to states with compatible industry composition maximizes your chances of success.
Data Analysis
This analysis uses CAINC4 (Total Personal Income) with two specific line codes:
LineCode 2 - Nonfarm Personal Income
What it measures: Income from all sources except farming, including wages, proprietor income, property income, and transfer payments from non-agricultural sources.
Why it matters: Nonfarm income shows diverse economic activity. States with 95%+ nonfarm income have diverse economies with multiple opportunity sources beyond agriculture.
How to read it:
- High Nonfarm Share (95%+): Diverse economies with multiple business opportunities
- Moderate Nonfarm Share (90-95%): Balanced economies with some agricultural presence
- Lower Nonfarm Share (<90%): Agricultural-focused economies with significant farming sector
LineCode 3 - Farm Income
What it measures: Income from agricultural activities, including crop and livestock production, farm proprietor income, and agricultural wages.
Why it matters: Farm income shows agricultural sector contribution. States with 3%+ farm income share have agricultural-focused economies with specific business opportunities.
How to read it:
- High Farm Share (3%+): Agricultural-focused economies with farm-related opportunities
- Moderate Farm Share (1-3%): Some agricultural presence but diverse economies
- Low Farm Share (<1%): Minimal agricultural sector, almost entirely nonfarm economies
Reading the Farm vs. Nonfarm Split
Farm Income Share: Calculate as (Farm Income / Total Income) × 100. Higher shares indicate agricultural-focused economies.
Nonfarm Income Share: Calculate as (Nonfarm Income / Total Income) × 100. Higher shares indicate diverse economies.
Economic Structure: States with high farm share (3%+) have agricultural-focused economies, while states with high nonfarm share (95%+) have diverse economies.
Trends Over Time: Tracking how farm/nonfarm split has changed reveals whether states are becoming more or less agricultural.
State-by-State Comparison
Based on farm vs. nonfarm income data for 2023, here’s how states compare:
Top 10 States by Farm Income Share (2023)
- North Dakota - 5%+ farm income share (agricultural economy)
- South Dakota - 4%+ farm income share (agricultural economy)
- Iowa - 4%+ farm income share (agricultural economy)
- Nebraska - 3%+ farm income share (agricultural economy)
- Montana - 3%+ farm income share (agricultural economy)
- Kansas - 3%+ farm income share (agricultural economy)
- Idaho - 2%+ farm income share (diverse with agriculture)
- Wyoming - 2%+ farm income share (diverse with agriculture)
- Minnesota - 2%+ farm income share (diverse with agriculture)
- Arkansas - 2%+ farm income share (diverse with agriculture)
States with Highest Nonfarm Income Share (2023)
Almost Entirely Nonfarm (99%+):
- Connecticut - 99.5%+ nonfarm income
- Massachusetts - 99.5%+ nonfarm income
- New Jersey - 99.5%+ nonfarm income
- New York - 99.5%+ nonfarm income
- California - 99%+ nonfarm income
What Makes Agricultural States Different
Economic Structure: States with 3%+ farm income share have:
- Agricultural-focused economies with farm-related opportunities
- Rural populations and agricultural communities
- Seasonal economic patterns tied to farming cycles
- Specific business opportunities (farm equipment, agricultural services)
Business Opportunities: Agricultural states offer:
- Farm equipment and supply businesses
- Agricultural services and consulting
- Rural market opportunities
- Agricultural technology and innovation
Economic Characteristics: Agricultural states typically have:
- Lower overall income levels than nonfarm-dominant states
- More stable but slower-growing economies
- Rural lifestyle and business environment
- Different customer base than urban states
What Makes Nonfarm-Dominant States Different
Economic Diversity: States with 95%+ nonfarm income have:
- Diverse economies with multiple opportunity sources
- Urban and suburban populations
- Technology, finance, and professional services sectors
- Broader business opportunities across industries
Business Opportunities: Nonfarm-dominant states offer:
- Technology and innovation businesses
- Professional and business services
- Financial services and consulting
- Urban consumer markets
Key Insights
Farm Income Share Varies Dramatically
The Numbers: Farm income share ranges from <0.5% in states like Connecticut and Massachusetts to 5%+ in states like North Dakota and South Dakota. Most states have <2% farm income share.
So What? Most states have diverse nonfarm economies (95%+ nonfarm income), while a few states have significant agricultural sectors (3%+ farm income). Understanding this split helps you identify states compatible with your business model.
Agricultural States Offer Specific Opportunities
The Numbers: States with 3%+ farm income share (North Dakota, South Dakota, Iowa, Nebraska) have agricultural-focused economies with farm-related business opportunities.
So What? If your business serves agriculture (farm equipment, agricultural services, rural markets), these states offer more opportunities. If not, you may prefer states with diverse nonfarm economies.
Nonfarm Income Dominates Most States
The Numbers: 95%+ of states have 95%+ nonfarm income share, showing that most states have diverse economies with multiple opportunity sources beyond agriculture.
So What? Most states offer broad business opportunities across industries. Only a few states are agricultural-focused, so most location decisions should focus on nonfarm economic characteristics.
Industry Composition Affects Business Fit
The Numbers: States with high farm share have different economic structures than states with high nonfarm share, affecting which businesses succeed in each.
So What? Matching your business model to states with compatible industry composition maximizes your chances of success. Agricultural businesses fit agricultural states, while diverse businesses fit nonfarm-dominant states.
How to Use This
-
For Industry Alignment: If your business serves agriculture, target states with 3%+ farm income share. If not, focus on states with diverse nonfarm economies.
-
For Economic Structure: Understand whether states have agricultural-focused or diverse economies. This affects business opportunities and customer base.
-
For Market Opportunities: Agricultural states offer specific opportunities (farm equipment, agricultural services), while nonfarm-dominant states offer broader opportunities.
-
For Location Strategy: Match your business model to states with compatible industry composition for optimal success.
Red Flags
- High Farm Share, Low Total Income: States with high farm share but low total income may have limited market size
- Declining Farm Share: States where farm share is declining may be transitioning away from agriculture
- Single-Industry Dependence: States dependent on single industry (whether farm or nonfarm) may be vulnerable to sector downturns
Green Lights
- Diverse Nonfarm Economies: States with 95%+ nonfarm income offer multiple opportunity sources and economic stability
- Stable Farm Share: Agricultural states with stable farm share offer consistent agricultural opportunities
- Balanced Composition: States with moderate farm share (1-3%) offer both agricultural and diverse opportunities
How to Use This Analysis
Follow this step-by-step process to leverage farm vs. nonfarm income data for location decisions:
Step 1: Identify Your Industry Alignment
Determine whether your business aligns with agriculture:
- Agricultural Business: Farm equipment, agricultural services, rural markets
- Nonfarm Business: Technology, professional services, urban markets
- Diverse Business: Serves multiple industries
Action: Categorize your business to determine which states are most compatible.
Step 2: Review Farm Income Share Rankings
Examine which states have significant agricultural sectors:
- High Farm Share (3%+): Agricultural-focused economies
- Moderate Farm Share (1-3%): Some agriculture but diverse
- Low Farm Share (<1%): Almost entirely nonfarm
Action: Create a shortlist of states with farm income share matching your business alignment.
Step 3: Assess Nonfarm Income Share
Evaluate economic diversity:
- High Nonfarm Share (95%+): Diverse economies with multiple opportunities
- Moderate Nonfarm Share (90-95%): Balanced with some agriculture
- Lower Nonfarm Share (<90%): Agricultural-focused
Action: Prioritize states with nonfarm income share that matches your business model.
Step 4: Compare Industry Composition
Match industry composition to your business:
- Agricultural Businesses: Target states with 3%+ farm income share
- Nonfarm Businesses: Focus on states with 95%+ nonfarm income share
- Diverse Businesses: Consider states with balanced composition (1-3% farm share)
Action: Align state industry composition with your business model and customer base.
Step 5: Make Your Decision
Combine industry composition data with other factors:
- Industry alignment (40%)
- Economic diversity (30%)
- Market size (20%)
- Business climate (10%)
Action: Create a decision matrix scoring each state and select your optimal location.
Common Use Cases
Use Case 1: Agricultural Business → Target states with 3%+ farm income share. Agricultural-focused economies offer more farm-related opportunities.
Use Case 2: Technology Business → Focus on states with 95%+ nonfarm income share. Diverse nonfarm economies offer broader technology opportunities.
Use Case 3: Rural Market Business → Consider agricultural states (3%+ farm share) for rural market opportunities.
Use Case 4: Urban Market Business → Prioritize nonfarm-dominant states (95%+ nonfarm share) for urban market access.
Questions to Ask Yourself
- Does my business serve agriculture or nonfarm industries?
- Do I need agricultural-focused or diverse economies?
- How important is industry composition in my location decision?
- What customer base aligns with my business model?
- Are there specific states with industry composition that matches my business?
Action Items Checklist
- Identify whether your business aligns with agriculture or nonfarm industries
- Review farm income share rankings for all 50 states
- Assess nonfarm income share for economic diversity
- Compare industry composition across candidate states
- Match industry composition to your business model
- Research business opportunities in agricultural vs. nonfarm states
- Create decision matrix combining industry composition and other factors
- Consult with Business Initiative for state registration guidance
Best Practices & Tips
Industry-Specific Recommendations
Agricultural Businesses: Target states with 3%+ farm income share (North Dakota, South Dakota, Iowa, Nebraska). Agricultural-focused economies offer more farm-related opportunities and customer base.
Technology & Software: Focus on states with 95%+ nonfarm income share. Diverse nonfarm economies offer broader technology opportunities and innovation ecosystems.
Professional Services: Prioritize nonfarm-dominant states (95%+ nonfarm share). Diverse economies create demand for professional services across industries.
Rural Market Businesses: Consider agricultural states (3%+ farm share) for rural market opportunities and agricultural communities.
Urban Market Businesses: Target nonfarm-dominant states (95%+ nonfarm share) for urban market access and diverse customer base.
Common Mistakes to Avoid
Mistake 1: Ignoring Industry Composition Focusing only on total income misses industry structure. A state with high total income but high farm share may not fit nonfarm businesses.
Mistake 2: Not Matching to Business Model Choosing states without considering industry alignment. Agricultural businesses need agricultural states, while technology businesses need diverse nonfarm states.
Mistake 3: Overlooking Economic Diversity Not considering how farm vs. nonfarm split affects business opportunities. Diverse nonfarm economies offer more opportunity sources.
Mistake 4: One-Size-Fits-All Thinking What works for an agricultural business may not work for a technology business. Match industry composition to your specific business model.
Mistake 5: Ignoring Trends Not tracking how farm/nonfarm split is changing. States transitioning away from agriculture may have different opportunities over time.
Optimization Strategies
For Agricultural Businesses: Target states with 3%+ farm income share. Agricultural-focused economies offer more farm-related opportunities and customer base.
For Nonfarm Businesses: Focus on states with 95%+ nonfarm income share. Diverse nonfarm economies offer broader opportunities across industries.
For Diverse Businesses: Consider states with balanced composition (1-3% farm share). You get both agricultural and diverse opportunities.
For Market Size: Balance industry composition with total income. States with compatible industry composition and high total income offer the best opportunities.
Timing Considerations
Best Time to Enter Agricultural States: When you have agricultural products/services ready. Agricultural states reward businesses serving the farm sector.
Best Time to Enter Nonfarm States: When you have diverse business model ready. Nonfarm-dominant states offer opportunities across multiple industries.
When to Reassess: Review industry composition annually. State structures change, and what was optimal 3 years ago may not be today.
Resource Recommendations
For Industry Composition Research:
- BEA Regional Economic Accounts (official farm/nonfarm income data)
- State economic development websites
- Industry-specific statistics
- Agricultural vs. nonfarm business climate information
For Registration Support:
- Business Initiative state registration services
- State Secretary of State websites
- Local business development centers
FAQs - Frequently Asked Questions About Farm vs. Nonfarm Income: Agricultural State…
What is Farm vs. Nonfarm Income: Agricultural State Economics (2010-2023)?
Farm vs. Nonfarm Income: Agricultural State Economics (2010-2023) is a comprehensive analysis of economic data from the Bureau of Economic Analysis.
This page provides data-driven insights on agricultural economics, rural vs. urban income, industry composition..
Learn More...
This analysis examines farm vs. nonfarm income: agricultural state economics (2010-2023) using official government data.
The data comes from BEA's Regional Economic Accounts and is updated regularly.
Use this information to make informed business location and planning decisions.
The analysis includes state-by-state comparisons, rankings, and trend analysis.
How often is this data updated?
BEA data is typically updated annually, with some datasets updated quarterly.
This page is updated when new data becomes available.
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The Bureau of Economic Analysis releases new data on a regular schedule.
Regional income data is typically updated annually after the end of each calendar year.
Check the data sources section for the most recent update date.
We strive to update pages within 30 days of new data releases.
What data sources are used in this analysis?
This analysis uses official data from the Bureau of Economic Analysis (BEA).
Specific variables include: CAINC4 (LineCode 2 - Nonfarm Personal Income, LineCode 3 - Farm Income), GeoFIPS STATE, Year 2010-20...
Learn More...
All data is sourced directly from BEA Regional Economic Accounts.
The data is official, authoritative, and publicly available.
We use the government-data MCP client to ensure data accuracy and timeliness.
Data methodology follows BEA standards and definitions.
How can I use this data for business planning?
This data can help inform business location decisions, market analysis, and strategic planning.
Compare states and regions to identify opportunities.
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Use state rankings to identify markets with strong economic indicators.
Compare income levels and growth rates to assess market potential.
Consider these statistics alongside other factors like cost of living and business climate.
Business Initiative offers expert guidance on state selection and business registration.
Are there limitations to this data?
Data may have reporting delays, sampling limitations, or geographic coverage gaps.
Some data points may be suppressed for privacy or reliability reasons.
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BEA data is subject to revision as more complete information becomes available.
Small geographic areas may have limited data availability.
Historical data may use different methodologies than current data.
Always check the data sources section for specific limitations.
How accurate is this data?
BEA data is highly accurate and follows rigorous statistical standards.
Data undergoes quality checks and validation before publication.
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The Bureau of Economic Analysis is a federal statistical agency with high data quality standards.
Data is subject to regular audits and quality reviews.
Methodologies are transparent and documented.
We display data exactly as provided by BEA without manipulation.
Can I download or export this data?
Yes, you can access the original data from BEA websites.
Links to official data sources are provided in the data sources section.
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BEA provides data downloads in various formats on their website.
You can access the same data we use through BEA's API or data portal.
For custom analysis, consider consulting with Business Initiative.
We can help you access and analyze government data for your specific needs.
How does this compare to other economic indicators?
BEA income data complements other indicators like employment, GDP, and business formation statistics.
Combining multiple data sources provides a more complete picture.
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Income data reflects economic prosperity and purchasing power.
Compare with employment data to understand labor market conditions.
GDP data provides broader economic context.
Business formation statistics show entrepreneurial activity levels.
In Summary
This analysis reveals the role of agriculture in state economies and how it affects overall income levels, helping you make location decisions based on industry composition.
Key Findings:
- Farm income share varies dramatically by state—ranging from <0.5% to 5%+ of total income
- Agricultural states have unique economic structures—states with 3%+ farm income share have agricultural-focused economies with specific opportunities
- Nonfarm income dominates most states—95%+ of states have 95%+ nonfarm income, showing diverse economies
- Industry composition affects business fit—matching your business to states with compatible industry composition maximizes success
- Location strategy should consider industry mix—understanding farm vs. nonfarm split helps identify compatible markets
What This Means for Your Business:
Understanding the farm vs. nonfarm income split helps you identify states with economic structures compatible with your business model. Agricultural states offer specific opportunities for farm-related businesses, while nonfarm-dominant states offer broader opportunities across industries. Matching your business to states with appropriate industry composition maximizes your chances of success.
Practical Applications:
- Industry Alignment: Target states with industry composition matching your business model
- Economic Structure: Understand whether states have agricultural-focused or diverse economies
- Market Opportunities: Identify states offering specific opportunities (agricultural vs. diverse)
- Location Strategy: Match industry composition to your business model for optimal success
Next Steps:
- Review the farm vs. nonfarm income data and identify states with industry composition matching your business model
- Assess whether your business aligns with agricultural or nonfarm industries
- Compare industry composition across candidate states
- Match state industry structure to your business model and customer base
- Consult with Business Initiative for expert guidance on state registration and market entry
By leveraging this analysis, you can position your business in states with industry composition that maximizes your success and supports long-term growth.
Ready to take action based on this analysis?
Now that you understand how agriculture shapes state economies, it’s time to make data-driven location decisions based on industry composition.
Next Steps:
-
Review the Analysis: Use this data to examine farm vs. nonfarm income split for all 50 states. Identify states with industry composition that aligns with your business model.
- Compare State Statistics: Use our state-specific business formation statistics to understand entrepreneurial activity levels:
- State Statistics Overview
- Explore business formation data by state to see where entrepreneurs are most active
-
Plan Your Registration: Once you’ve identified states with compatible industry composition, Business Initiative can help you register your business with expert guidance on state requirements, tax optimization, and compliance.
- Validate Your Market: Combine industry composition data with industry-specific statistics to validate market opportunity before committing to a location.
Business Initiative offers expert services to help you leverage this analysis:
- State Registration Services: Get expert guidance on registering in states with industry composition that maximizes your business success
- Tax Optimization: Understand how state selection impacts your tax obligations based on industry structure
- Market Analysis: Combine industry composition data with industry statistics for comprehensive market validation
- Strategic Planning: Work with our team to develop a location strategy based on industry composition insights
For personalized advice, schedule a consultation with Business Initiative or reach out through our contact form.
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