USDA’s
annual Agricultural Resource Management Survey
(ARMS) is the primary source of information on
the financial condition, production practices,
resource use, and economic well-being of America’s
farm households. Using these data, ERS researchers
analyzed the economic performance of specialized
farms—defined as farms that receive 50 percent
or more of their gross value of production from
the sale of a specific commodity. A comparison
of these farm types highlights the differences
among specific commodity farms and the households
that operate them with respect to household income,
Govern-ment payments, and demographic characteristics
of farm operators.
Farms specializing in corn,
fruit and vegetables, wheat, and cotton are concentrated
in different regions across the United States,
reflecting the best locations for growing each
of these commodities. Corn is grown mostly in
the Midwest, wheat in the Northern Plains and
Southern Plains, fruit and vegetables near the
coasts, and cotton in the Southern and Western
States. Some of the differences among farm types
reflect variations in regions.
Wheat and Cotton Farms
Are the Largest
Wheat farms and cotton farms,
on average, are the largest farms, both in terms
of total operated acres and acres devoted to their
major commodity. Wheat farms are large because
most of the operated acres are used for pasture
or left fallow. Cotton is very capital intensive,
requiring large expenditures for equipment; farmers
prefer to spread these costs over more acres.
On average, fruit and vegetable farms tend to
be the smallest in area, compared with the other
three types of farms—many fruit and vegetable
farms are
located close to metropolitan areas, where land
is more expensive and competition for land between
agricultural and urban users is more intense.
Fruit and vegetable farms that are highly specialized
and intensively farmed are best suited for these
regions.
These large wheat and cotton
farms are also less specialized than fruit and
vegetable farms and corn farms. Less than 50 percent
of the land on wheat and cotton farms is planted
to these crops. Land not planted to wheat is often
left fallow in dry areas, such as in the Northern
Plains, and is also used as pasture for cattle
grazing. Cotton growers rotate in and out of cotton,
planting soybeans, corn, or sorghum on land not
planted to cotton. In contrast, fruit and vegetable
farms are the most specialized because they are
small, high value, and labor intensive, and located
in areas not suited for row crops.
Cotton Farms Receive
the Highest Government Payments
These four types of farms also
differ significantly by source of income. Three
main sources of income are farm sales, Government
payments, and off-farm income. Farm households
of all types typically have significant sources
of off-farm income—these include off-farm
jobs, ownership of nonfarm businesses or nonfarm
investments, Social Security benefits, and other
retirement income.
According to ARMS data on sources
of income by farm type, households operating cotton
farms brought in the highest total income, onfarm
income, and Government payments. Households operating
fruit and vegetable farms were second after cotton
farms in terms of total income. However, while
their total income was higher than that of households
operating corn and wheat farms, more of that income
came from off-farm sources. Because there are
no program payments for fruit and vegetables,
Government payments were lowest on these farms.
Not All Farmers Consider
Farming Their Major Occupation
In an attempt to determine how
farm operators allocate their time, ERS used ARMS
data to classify farmers by their major occupation:
farm or ranch work, hired farm manager, retired
but still farming, or nonfarm work. For all farms,
operators were just as likely to identify nonfarm
work as their major occupation as they were farming
or ranching. Some operators indicated that they
were not in the workforce, and most of these considered
themselves to be retired. Consistent with the
average size of their farms, the share of operators
whose major occupation is farming was lowest on
fruit and vegetable farms and highest on cotton
farms. However, even among farmers who primarily
raised corn and wheat, about 50 percent said their
occupation was something other than farming.
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