Rural Lifestyle Market

Part
01
of seven
Part
01

Rural Lifestyle Market - Growth

After years of decline, rural America recently started to add population to its counties, but the numbers are still not meaningful enough to reverse previous losses. While immigrants are spurring growth in rural areas, younger generations leaving due to a lack of opportunity and the devastation caused by the opioid crisis are some of the barriers hindering progress. The following information presents insights about the current growth of rural America.

The State of Rural America

  • According to the United States Department of Agriculture (USDA), the decline in the rural population is starting to reverse. In 2016-2017 rural counties added population due to an increase in net migration. That change, however, did not offset the losses in previous years.
  • Fifty-eight percent of rural counties showed positive changes in net migration between 2016-17. However, low-density remote areas saw a decrease in net migration, mostly due to job losses related to oil and gas production. Other regions, particularly eastern Kentucky and West Virginia, endured the opioid epidemic and its effects.
  • Poverty rates dropped from 2013 to 2018 for all race/ethnicity groups in rural areas. Gains among Native Americans and Hispanics are balancing population losses among Whites (still the majority by far) and Blacks.
  • The aging population presents a problem, as rural areas continue to attract retirees while losing younger generations. Nineteen percent of the rural population is 65 or older (vs. 15% in urban areas), 85% of the counties where more than 20% of the population is 65 or older are in rural regions.

Differences Between Counties

  • According to the USDA, rural America embraces a diverse set of nonmetropolitan counties, from those adjacent to metro areas to isolated ones. Nonmetro counties account for 46.1 million residents or 14.1% of the overall population, as of July 2018.
  • In 2010, the rural population was 46.3 million, which indicates a 0.4% decline. The period between 2010-2016 defined this decline, as rural settings lost 260,000 residents. The period between 2016 – 2018 saw a reverse in the trend, with nonmetro counties adding around 54,000 residents.
  • The decrease is mostly due to a disparity between natural changes (births vs. deaths) and net outmigration (people moving out of communities more than people are moving in). In the period between 2010-2018, there was a population gain of 272,000 due to natural changes but a loss of 478,000 from net outmigration.
  • Completely rural, nonadjacent counties got hit the hardest, with a 2% decrease. Overall less urban counties endured losses between 1% to 2%. Interestingly, more urban but not adjacent counties saw a more significant population increase than those adjacent to metropolitan areas.

Official Definitions may not Reflect the Lifestyle

  • According to a Washington Post-Kaiser Family Foundation survey, 60% of U.S. adults who view themselves as “rural” are living in areas classified as urban. Three in four who say they live in small towns are living in metro areas according to official definitions.
  • Research suggests that some official definitions create an illusion that rural areas are dying by reclassifying counties as soon as they start to grow, even if it doesn’t reflect the lifestyle of the community. As one recent study discovered, part of the population loss reported in rural America may be due to the changes in the way the Office of Management and Budget classify the counties, as opposed to real changes in the area or lifestyle.
  • Moreover, 130 counties have mostly or entirely rural populations but are located within the largest metropolitan areas due to differences in how the Census and the Office of Management and Budget define rural. The first uses population density to determine rural areas, while the Office of Management and Budget defines them by market areas and commuting zones.
  • Bracken County in Kentucky, for instance, is classified as a metropolitan area, even though it has 8,488 people in 209 square miles, meaning a population density of 40 people per square mile. Bracken is classified by the USDA ERS’s Rural-Urban Continuum Codes as a “1”, the same as New York City.

Immigrants

  • Immigrants are accelerating population growth in rural areas. Twenty percent of growing rural areas owe their growth to immigrants mitigating the loss of population.
  • Immigrants accounted for 37% of overall rural growth from 2000 to 2018, helping revitalized towns and economies as they balance the elderly population and foster cultural diversity.
  • One study analyzed the rural western counties and unveiled that during the past 35 years, 90% of the counties saw a growth in minority populations. Furthermore, two out five had the population decrease slowed or reversed due to the expansion of minority populations.
  • Nineteen percent of the rural counties grew only because of the rise in the minority population, especially those born in foreign countries. This trend is expected to change and disrupt some areas, as the social diversity injected to an otherwise stagnant, aging community is due to create challenges in counties unwilling to incorporate ethnic and racial diversity into the economy, politics and educational system.

Younger Generations are Leaving

  • The median age in rural areas is 43, as opposed to 36 in urban areas, a result of young people leaving rural areas to pursue better education and economic opportunities. Some believe “young people are now rural America’s most precious declining resource.
  • Not only young people are not attracted to the most common types of jobs available in rural areas, such as mining and farming, but technological advancements are also decreasing the number of employment choices.
  • In the past, the youth could rely on traditional farms or mills for job opportunities, but as the industry evolves and farms outsource and automate their processes, the demand for labor is shrinking and there aren’t enough opportunities in other areas to replace these jobs.
  • A 2018 survey conducted by NPR/Robert Wood Johnson Foundation/Harvard T.H. Chan School of Public Health discovered that most young people leave their rural communities for job-related reasons (65%).
  • About 43% of parents in such communities said their child had moved somewhere else (not including time spent at college, trade school or military). The majority said they moved to a city (61%), while 21% said it was to another rural area.
  • This is happening in other countries as well, for similar reasons. For instance, in the UK, young people are leaving small towns because they don’t have the resources or incentives to make them stay.
  • The Prince's Countryside Fund suggests that a way to reverse this trend is to prioritize affordable housing, transport, training, improve employment conditions with the involvement of the private sector.
  • Some communities may have created the problem for themselves by developing a filter system, in which teachers, parents and other influential adults pick and nurture the young people they believe are destined to leave and neglect the individuals most likely to stay or return.

Opioid Crisis Relates to the Aging and Loss of Population

  • The opioid crisis led to an increase in mortality rates for middle-aged adults in rural America, which is accelerating the rural aging population since the rates continue to decrease for older residents. The most affected regions are seeing a shrinking community, as 14 out of the 15 counties with the highest opioid prescribing rates in 2017 were rural counties.
  • Drug addiction became such a problem that a recent survey conducted by the NPR and Harvard discovered that drug addiction is the number one problem in rural communities, according to the population, beating economic concerns.
  • Fifty-seven percent say opioids are a serious problem to their local communities (37% say it’s a severe problem), and 48% say it has gotten worse in the past five years (only 5% say it has gotten better).
  • Respondents also believe that is the number one urgent health problem facing their community (25%), way ahead of cancer (12%) or access to healthcare (11%). Nearly half (49%) say they personally known someone, such as a friend or family member, who has struggled with opioid addiction.
  • The CDC examined opioid prescriptions during the 2014-2017 period and discovered that the percentage of patients prescribed an opioid in rural areas was higher than for those in urban areas. Patients in rural settings were 87% more likely to receive an opioid prescription.
Part
02
of seven
Part
02

Rural Lifestyle Market - Economic Impact

People who live in rural America and are small, hobby, or lifestyle farmers do not have much impact on the overall production of most commodities in the United States, but they are driving the growth of farmers' markets and farm equipment. Additionally, they are critically important to rural counties that have formed around family farms. Additional insights on the impact of these farmers on the American economy are below.

Small Farms Are Not Highly Productive

  • In 2017, the U.S. Department of Agriculture found that 89% of U.S. farms were considered small and accounted for 52% of farmland. However, they only represent 25.8% of overall commodity production.
  • Idaho small farmers on lots between one and nine acres in size represented just 0.01% of total farm product sales for the state in 2017 compared to 58.6% for large farms.
  • Small farms only account for the following production percentages of commodities:
    • 75.7% of hay
    • 60.1% of poultry
    • 27.6% of beef
    • 22.8% of pork
    • 21.8% of cash grains and soybeans
    • 10.4% of dairy
    • 9.5% of high-value crops (vegetables, fruits, tree nuts, nursery/greenhouse products)
    • 8.1% of cotton

Small Farms are not Full-Time Jobs

  • Approximately 41% of U.S. farms are "modest affairs whose operators have a primary occupation other than farming."
  • The average lifestyle farmer only works about 75 hours per year on a tractor compared to the 300-500 hours per year a full-time farmer puts in on a tractor.
  • According to Lance Ellis, who runs a 27-acre cattle, horse, and alfalfa farm in Idaho, his operation is "nothing more than just a hobby farm... It’s totally a lifestyle choice. Small farmers are not running it as a business. Small farms just aren’t an efficient way to produce food anymore."
  • Running a small farm is often not profitable and is typically just "an empowering hobby for people who already have a day job that pays the bills."
  • Approximately two-thirds of farms in the Northwest region of the U.S. earned less than $10,000 in 2017.

Small Farms Drive Farmers' Market Growth

Lifestyle Farms are Driving Growth in Farm Equipment Industry

  • According to the tractor company Mahindra North America, lifestyle farming represents the "fastest-growing of all its markets" and predicts the segment will grow about 10% a year over the next ten years.
  • Due to the growing trend of lifestyle farming, particularly in the Northeast, tractors with less than 40 horsepower will represent 60% of tractors sold in the U.S.
  • Charles R. Glass, president of Glass Management Group, believes that the number of lifestyle farms likely won't change much, but the size of their farms will increase, which will require additional equipment. He stated, "I think the growth in farms is going to come in lifestyle farms."

Loss of Small Farms Damages Rural Counties

  • Between 2010 and 2017, the U.S. lost 5% of its farms, totaling 101,520 farms. Many small and midsize farms were concentrated into larger operations.
  • Many of the farms lost were family farms, most of which are small-to-midsize farms and according to American Progress, "the loss of family farms over the past several decades has deeply wounded rural counties, 1 in 5 of which are economically dependent on farming."
  • Studies have shown that family farms are linked to "more economically vibrant communities, higher wages, and lower economic inequality."

Small Farms are Important for Hay and Poultry Production

  • In 2017, small farms were responsible for 75.7% of U.S. hay output and 60.1% of U.S. poultry output.
  • One reason for small farm success in the poultry segment is that they are "paid a per-unit fee for services rendered and are largely insulated from commodity price movements."
Part
03
of seven
Part
03

Rural Lifestyle Market - Baby Boomers

As baby boomers age, rural America will bear a greater share of health costs as Medicaid recipients are more likely to be in nursing homes and Medicaid has been the largest payer of long-term care.

Rural Lifestyle Market - Baby Boomers

  • According to American Community Survey (ACS) data, the share of urban population 65 years and older living in skilled-nursing facilities was 3.1% compared to only 1.4% of people in rural areas. This indicates that the unmet demand for skilled-nursing facility options in rural areas will increase as baby boomers age.
  • As baby boomers age, they frequently face challenges related to having few housing options from which to choose in rural America as the houses may be unsafe or in need of repairs, or inaccessible for a person with mobility challenges.
  • The changes in the life course such as retirement, widowhood, and possible health status changes, can all impact living arrangements as baby boomers age since the larger share of older people in rural areas live in households with others.
  • As baby boomers get older, rural America will bear a greater share of health costs as Medicaid recipients are more likely to be in nursing homes and Medicaid has been the largest payer of long-term care.
  • The rural older population was less racially and ethnically diverse but as baby boomers age, they could shape rural America in the coming years as "changes in long-term care and senior housing and services" will be some of the new and important necessities required.
  • As baby boomers age, senior centers in rural America encounter lower attendance in the midst of social isolation where older adults are generally more remote. However, in recent years membership has decreased as members die and baby boomers are more disinclined to attend senior centers.
  • As baby boomers age they have created a new set of challenges to local governments as only few physical health needs programs and resources are allocated to, or are available in, rural areas, although substantial headway has been made in dealing with the physical health needs of baby boomers in rural America.
Part
04
of seven
Part
04

Rural Lifestyle Market - Millennials

Millennials are energizing rural areas long forgotten by the rest of society thanks to growing art communities and the pleasure provided by close-knit communities. However, millennials tend to find more satisfaction in cities as they offer greater economic opportunities.

Positive Insights:

Insight #1

  • Members of the millennial generation are shifting to areas that are more rural, reactivating them. They are helping to energize these areas most people have ignored.

Reason

  • Millennials are appreciating the emerging art communities, and they are also seeking a close-knit community and a simpler lifestyle. These particular communities can be found in rural areas like Marfa, Texas and North Adams, Massachusetts.

Insight #2

  • From 2014-2018, figures from the U.S. census have indicated that that countless individuals belonging the Gen X and millennial generations are moving away from large municipalities.
  • On average, around 30,000 U.S. residents aged 25-39 have moved from large cities each year since 2014.

Reason

  • Individuals that conduct freelance work are more inclined to leave "urban job centers" and travel to areas capable of satisfying their lifestyles.
  • Due to this development, among other factors, areas such as Charlotte, North Carolina, and Boise, Idaho, are witnessing a quicker growth in their population than the majority of large cities.

Insight #3

  • Members of the millennial generation are aging, and as these individuals go through next life phase (e.g., higher salaries, kids, and marriage), they are initiating their separation from hectic municipalities, similar to previous generations.

Reason

  • According to an Ernst & Young survey conducted in 2018 that involved around 1,200 adults between the ages of 20-36, more millennials are deciding to purchase residences in rural areas.
  • Affordability plays a vital role in millennials moving to rural areas.

Insight #4

  • Modern day exoduses indicate that the age cohort is eager to trade busy cities for calm small towns.
  • Young American adults are moving to areas that are more suburban and rural, seeking open spaces, tranquility, and reasonably priced housing.

Reason

  • Some reasons for this migration include the simplicity of establishing a small business in rural areas, more remote occupations are available in today's era, open spaces and fresh air, likeliness of meeting more like-minded individuals, and reduced exposure to traffic.

Insight #5

  • As revealed in a Zillow Group Report in 2016 around consumer housing trends, around 20% of homeowners in the millennial generation reside in rural communities.
  • About 33% of millennial homeowners reside in urban communities and 47% of them reside in the suburbs.

Reason

  • Rural places in the United States present two different characteristics that entice millennials, namely affordability and a certain quality of life.
  • To millennials, happiness and pleasure are essential, and they believe rural areas can assist them with it.
  • The group appears to be increasing their involvement in leadership and politics, which is simpler to do in rural places because they are smaller.
  • According to Madeline Moore, a co-founder of Rethinking Rural, millennials believe they are capable of having "an impact in a community of 2,000 versus 100,000 or more."

Negative Insights :

Insight #6

  • Throughout the United States, rural communities are encountering roadblocks due to millennials leaving for more urban areas.

Reason

  • Pupils rural areas have traveled to larger cities for college and have decided to not come back home.
  • These communities continue to lose the college-educated individuals since they are able to locate job opportunities that are more competitive in urban places when they travel to those areas for school.
  • Also, there is a reduction in occupations for agriculture and manufacturing, which impacts rural areas.
  • Rural communities, for the most part, were shaped by the agriculture and manufacturing industries, which now demand fewer employees, leading to citizens leaving to locate jobs.

Insight #7

Reason


Part
05
of seven
Part
05

Rural Lifestyle Market - Future Outlook

In the future, rural America is expected to be less populated, have fewer doctors, have more jobs replaced by automation, experience economic and population decline in the Midwest and Northeast regions, become older, and be more diverse.

Rural America in the Future

1. Less Populated

  • The population in rural America has been and is projected to continue declining.
  • Of U.S. rural counties, about 35% "are experiencing protracted and significant population loss."
  • Among all counties in the U.S., 746 have populations that are declining. Of those 746 counties, 91% are rural counties. For comparison, "nine percent of urban counties are depopulating."
  • Projections from Statista show that urbanization in the U.S. is expected to steadily increase between 2020 and 2045. In 2020, it's projected that 83.7% of the U.S. population will live in urban areas and by 2045 that number will reach 89.2%. As a result, these data points show that rural America's population is projected to decline in the future (a screenshot of that data graph is also included in this Google Doc).

2. Fewer Doctors

  • There are projected to be fewer doctors in rural America in the future.
  • As of 2019, over half of doctors in rural America are 50 years of age or older.
  • By 2030, it's projected "that retirement will account for 23% fewer rural doctors."

3. Jobs Replaced by Automation

  • Automation is projected to replace more jobs in rural America in the future.
  • Between 2020 and 2030, over "25% of the workers [in rural America] might be 'displaced' by automat[ion]."

4. Decline in the Midwest and Northeast Regions

  • In terms of geography, rural areas in the Midwest and Northeast regions of the U.S. are dwindling in terms of both population and economy.
  • Among Midwestern rural counties, 81% contracted in terms of population and economy.
  • Among Northeastern rural counties, 85% contracted in terms of population and economy.
  • Those statistics clearly demonstrate a changing geographical landscape of rural America that affects both the present and future.

5. Older Population

  • The future population in rural America is expected to be older.
  • It's projected that 25% of households in rural America will be 65+ years old by 2040.
  • That percentage marks a significant increase from years past, as approximately 15% of people in rural America were 65+ from 2000-2010.

6. More Diverse

  • Rural America is projected to look more diverse in the future.
  • By 2030, households in rural America "will become as racially diverse . . . as the nation was in 1990. "
  • Though households in rural America will become more diverse "through 2040, they will remain predominantly white."

Research Strategy

We identified the above insights about what rural America will look like in the future by looking for data-based findings about how rural America has been changing and is expected to continue changing in the future. We looked for a mix of demographic projections and non-demographic projections such as jobs and locations. Examples of articles and reports we consulted during our research included Statista, Science Daily, and Market Watch, among others. We focused on findings involving statistics because they clearly show what rural America is expected to look like in the future.
Part
06
of seven
Part
06

Rural Lifestyle Market - Current Trends

Rural Lifestyle Market — Current Trends

The main trends which will influence the viability of the rural American market primarily focus on economic factors. These trends include employment and poverty levels, market size changes and the levels of income in the market. Additionally, changes in diversity are expected to be an important change.

The Rural American Market is Experiencing Positive Changes in Employment Levels

The Rural American Market Experiences Slower Absolute Population Growth than Urban and Suburban Markets (or Relative Population Decline)

The Rural American Market Has Less Earning Potential than Urban and Suburban Lifestyle Markets

The Rural American Market is Diversifying

  • There are more minorities moving to rural America, while the white population is decreasing.
  • This trend is included because the Black, Hispanic and Asian voters moving into rural areas are, according to the Pew Research Centre, "overwhelmingly Democratic". Additionally, diversity preferences are historically different in rural and non-rural areas. From a business perspective, this would mean the rural market could shift its preferences at points which diverse and more liberal principles differ from conservative ones.
  • The Pew Research Centre and the Center for American Progress verify this trend.

Research Strategy

Important trends were identified by looking through various reports from credible institutions. These include various governmental, research and academic sources. These trends were then evaluated according to the impact they would have on the American rural market.
Part
07
of seven
Part
07

Rural Lifestyle Market - Current Demographics

In rural America, the population is comprised of many older individuals, there are more males than females until around age 72, $47,020 is the median income, there are far more high school graduates than college graduates, and the majority of people are married.

Current Demographics of the Population in Rural America

1. Age

  • Among rural Americans, "the median age" is 43.
  • Of the entire population in rural America, 19% is comprised of individuals ages 65+.
  • The U.S. has 1,104 counties in which over 20% of the total population is comprised of individuals ages 65+. Of those counties, about 85% are rural.
  • The ages with some of the lowest-population levels (other than the very old ages, such as the 80s, where populations are lower overall) in rural America ranges between 20 and 40 years-old.
  • The age range with the highest-population level in rural America is 50-64.

2. Gender

  • The best gender data for rural America that we found came from U.S. Census Bureau information collected between 2012 and 2016.
  • Though the data graph doesn't state the number or percentages of males and females, the gender ratio is illustrated (which shows the population disparity between the genders by age).
  • In the notes that accompany that data graph, it's stated "that those who do seek rural farming and mining industry jobs in their 20s and 30s are overwhelmingly men." Thus, we can reasonably infer from that statement that there are more men than women in that age range. Thus, when looking at the graph, the ratio line above the 100 threshold means there are more males than females (since the line is above 100 in the 20s-30s, which represents that there are more males than females).
  • The following gender findings are based on the premise described in the previous finding.
  • There are more males than females in rural America from birth through 50 years old.
  • The age range with the greatest level of more males than females starts around age 17 and continues until around age 27.
  • The age range with the greatest level of more females than males starts around age 73 and continues until around age 82.
  • There is a relatively equal number of men and women in rural America starting around the age of 47 and continuing through around age 72.

3. Income

  • The median income among households in counties that are mainly rural is $47,020.
  • The range of household median income in counties that are mainly rural is between $20,330 on the low end and $94,775 on the high end.
  • U.S. counties that are mainly rural have a poverty rate of 16.3%.
  • The range of the poverty rate in counties that are mainly rural is between 2.4% on the low end and 51.9% on the high end.
  • The average income among adults in rural America who have a bachelor's degree is $41,030.
  • The average income among adults in rural America who have either a professional degree or graduate degree is $51,996.

4. Education

  • Among high school students in rural America, 87% "graduate from high school in four years."
  • The U.S. has 467 counties in which a minimum of "20% of the working age population lacks a high school diploma." Of those counties, 80% are rural.
  • In rural America, 19% of individuals have at least a bachelor's degree.
  • Among high school graduates in rural America, 59% attend college. However, "they are more likely to drop out."
  • Of rural Americans between the ages of 18 and 24, 29% attend higher education.

5. Marriage

Research Strategy

We identified the current demographics of the population in rural America by looking for research studies and articles specific to the categories of data we were seeking information about. The U.S. Census Bureau was the main source of the data we provided. However, we also cited information published by the Des Moines Register, The Hechinger Report, and the Lumina Foundation, among others. These sources collectively provided us with all the requested information about the current demographics of the population in rural America.
Sources
Sources

From Part 06
Quotes
  • "Hence government should largely enhance the survival of small and medium scale companies which can help create jobs, lower unemployment and cause sustainable real output growth, further resulting in increase in the rate of employment generation in the economy. "
Quotes
  • "A recession impacts many organizations and can led many businesses to encounter a shrinking market size for the sector in which they operate. According to an analysis by the Federal Reserve Board, both new and established small businesses fared worse than their larger counterparts during the Great Recession, seeing profits fall by double digits. But there are many factors other than a recession that can also lead to a shrinking market size in any business sector, including changing consumer tastes and technological change."