Nearly Half of Sales Come From Million-Dollar Farms
Robert A.
Hoppe and Penni
Korb
A growing percentage of U.S. farm commodity
sales come from “million-dollar farms,”
with annual sales of $1 million or more. Agricultural
census data show that these farms accounted for
48 percent of all U.S. farm product sales in 2002,
up from 23 percent in 1982 (with sales measured
in constant 2002 dollars). The share of sales attributable
to million-dollar farms rose as the share from small
farms (sales less than $250,000) declined.
The number of million-dollar farms
more than tripled between 1982 and 2002 to 28,700,
or 1.3 percent of all U.S. farms. Twelve percent
of million-dollar farms had sales of $5 million
or more in 2002, and they accounted for about one-fourth
of U.S. farm sales.
By 2005, the number of million-dollar
farms had increased to 35,060, according to USDA’s
Agricultural Resource Management Survey. The increase
reflects—in part—good years for the
farm sector since the 2002 Census was conducted.
Twenty-one percent of million-dollar farms were
located in the Pacific States of California, Oregon,
and Washington, with 16 percent in California alone.
The number of operators per farm
increases with sales since commercial-sized farms
often require more management and labor than one
individual can provide. Such multiple-operator farms
accounted for 69 percent of million-dollar farms
in 2005, compared with 43 percent of farms in general.
One-third of million-dollar farms with more than
one operator were also multiple-generation farms
(at least 20 years’ difference between the
ages of the oldest and youngest operators). Multiple-generation
farms made up a larger share of million-dollar farms
than any other sales class, probably because million-dollar
farms had enough business to keep more than one
generation employed.
Most million-dollar farms (82
percent) were family operations in 2005, where the
majority of the business is owned by individuals
related by blood, marriage, or adoption. The other
18 percent were nonfamily farms, including 7 percent
organized as nonfamily corporations. Direct ownership
of million-dollar farms by large, publicly held
corporations was negligible since nonfamily corporations
with more than 10 stockholders accounted for roughly
1 percent of million-dollar farms.
The situation was similar for
the largest million-dollar farms (those with sales
of
$5 million or more): 69 percent were classified
as family operators and 17 percent were owned by
nonfamily corporations. Nonfamily corporations with
more than 10 stockholders accounted for 1 percent
of the $5-million farms.
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