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Farm Economy

  • Feature

    Farm Businesses Well-Positioned Financially, Despite Rising Debt

    Debt owed by U.S. farm businesses rose 39 percent between 1992 and 2011, after adjusting for inflation. Despite rising debts, financial leverage—measured as debt relative to the value of assets—declined over this period for the typical farm business. Debt use and financial leverage varies widely, but the vast majority of farm businesses are better positioned to withstand unexpected changes in farm income or interest rates than they were in the 1990’s.
  • Finding

    Farm Financial Position Expected to Remain Strong Despite a Forecast Drop in 2014 Income

    Farm financial position expected to remain strong despite a forecast drop in 2014 income.
  • Feature

    Family Farming in the United States

    The United Nations (UN) has designated 2014 the “International Year of Family Farming” with a primary focus on small farms that depend on a family for most labor. Farms in the U.S. are often much larger than the farms in developing countries that are the primary focus of the UN’s efforts, but farms relying primarily on family labor still account for nearly half of U.S. farm output.
  • Feature

    Adoption of Genetically Engineered Crops by U.S. Farmers Has Increased Steadily for Over 15 Years

    Farmers planted about 170 million acres of GE crops in 2013—principally corn, cotton, and soybeans—representing about half of the U.S. farmland used to grow crops. Pest management traits are the main feature engineered into GE crops grown, but over time, traits providing protection against additional pests and seeds combining several traits have been introduced and quickly adopted by farmers.
  • Feature

    Productivity Growth Slows for Specialized Hog Finishing Operations

    U.S. hog farm numbers dropped by 70 percent over 1991-2009 while hog inventories remained stable. The result has been an industry with larger hog enterprises, increased specialization in a single phase of production, greater reliance on purchased rather than homegrown feed, and greater use of production contracts. This structural change has led to higher productivity and lower pork prices.
  • Statistic

    Agricultural Productivity Growth in the United States: 1948-2011

    U.S. total farm production more than doubled between 1948 and 2011. Agricultural output growth was mainly driven by productivity growth, with little contribution from total agricultural inputs growth.
  • Statistic

    A Visual Primer for the Food and Agricultural Sectors

    Ag and Food Statistics: Charting the Essentials, released in September 2013, is a collection of charts and maps covering fundamental statistics and trends related to the U.S. agricultural and food sectors. This data feature highlights a few of the questions that can be answered by the Essentials.
  • Finding

    Who Is Adopting Organic Farming Practices?

    In response to rising demand for organic products, a growing number of farmers have had to adopt new (to them) organic production practices and establish new marketing channels. Early adopters of innovative farming practices tend to be operators of larger farms and have higher levels of schooling and stronger links to outside sources of information than other farmers.
  • Feature

    Cropland Consolidation and the Future of Family Farms

    Over the past three decades, U.S. crop production has been shifting to larger farms for most crops and in most States. Despite the shift, family farms continue to dominate U.S. crop production, accounting for 87 percent of the total value of U.S. crop production in 2011.
  • Feature

    Solving the Commodity Markets’ Non-Convergence Puzzle

    From 2005 to 2010, expiring corn, soybeans, and wheat futures contracts routinely settled at prices significantly higher than their cash market counterparts. Findings show that the observed non-convergence was an unintended consequence of market design rather than speculative trading.
  • Feature

    The Role of Conservation Program Design in Drought-Risk Adaptation

    Since USDA conservation programs are voluntary, farmers base their participation decisions on local conditions, among other factors, and those decisions are influenced by the level of local drought risk. This is a form of climate adaptation.
  • Finding

    Onfarm Energy Use Fairly Steady in 2001-11, But Share of Production Costs Rose

    Although agriculture’s demand for energy has historically been less than 2 percent of total U.S. energy consumption, energy-based inputs account for a significant share of agricultural production costs. For example, over 30 percent of total production expenditures by corn, sorghum, and rice farmers in 2011 were for energy-intensive inputs.
  • Finding

    China’s Agricultural Productivity Growth: Strong But Uneven

    The rapid growth in China’s agricultural productivity over the past few decades may not have been sustained in recent years. Annual total factor productivity growth peaked during 1996-2000 at 5.1 percent before slowing to 3.2 percent in 2000-2005. It then declined by 3.7 percent per year in 2005-07. The significance of this slowdown remains unclear.
  • Feature

    Crop Outlook Reflects Near-Term Prices and Longer Term Market Trends

    Initial indications suggest continued expansion of U.S. corn and soybean acres at the expense of rice and cotton. Factors behind the acreage shift include growing U.S. ethanol production, rising demand in China for U.S. soybeans, and new competition for U.S. wheat from Black Sea wheat exporters.
  • Feature

    Research Raises Agricultural Productivity in Sub-Saharan Africa

    Agricultural productivity in Sub-Saharan Africa has been rising gradually since the 1980s. Agricultural research has spurred adoption of new technologies and has been a major driver of higher productivity in Sub-Saharan African agriculture. Despite these gains, productivity growth in the region remains well below that of other developing countries.
  • Finding

    Among Women Farmers, Different Specializations Dominate Farm Numbers, Farm Sales

    Most women-operated farms specialize in grazing livestock or miscellaneous crops, but these are mostly small operations that contribute relatively little to the total sales of women-operated farms. Most sales by women-operated farms come from farms specializing in poultry and eggs, specialty crops, grains and oilseeds, and dairy.
  • Statistic

    The Revised ERS Farm Typology: Classifying U.S. Farms To Reflect Today's Agriculture

    Since the release of ERS's farm typology nearly 15 years ago, the U.S. agricultural sector has changed in a number of ways. ERS recently updated the typology to reflect three important trends: commodity price increases, a shift in production to larger farms, and the rapid growth of the use of production contracts among livestock producers.
  • Feature

    The Importance of Farmer-Owned Nonfarm Businesses in the Rural Economy

    Farm households that also operate nonfarm businesses have accounted for roughly 18 percent of U.S. farm households since the 1990s. In 2007, farmer-owned nonfarm businesses employed over 800,000 nonfarm workers and contributed an estimated $55 billion to their local communities’ gross county product.
  • Finding

    Younger Beginning Farmers Tend To Operate Larger Farms

    In 2011, 11 percent of beginning farm operators under age 35 had gross farm sales of $250,000 or more, compared with 6 percent of beginning operators age 35-49 and 1 percent of those age 50 and older. As a result, young beginning farm households tend to earn more on their farm and less off their farm than other beginning farm households.
  • Statistic

    Understanding Farm Income’s Role in Farm Household Finances

    Over the last 20 years, farm income has represented a small share of total farm household income--as little as 4.6 percent and never more than 17.5 percent. This pattern supports the counterintuitive notion that farming matters little to the financial well-being of U.S. farm households. However, the share of farm income to total farm household income can be misleading.
  • Finding

    Farm Income Forecast To Remain High in 2013

    Net farm income in 2013 is forecast to be $128.2 billion, which would be nearly 14 percent higher than forecast in 2012. Adjusting for inflation, this would be the highest net farm income since 1973.
  • Feature

    Adaptation Can Help U.S. Crop Producers Confront Climate Change

    While the impact that climate change will have on future growing conditions in specific areas of the country remains uncertain, the ability of farmers to adapt to climate change—through planting decisions, farming practices, and use of technology—can reduce its impact on production, farm commodity prices, and farmer returns.
  • Feature

    Federal Income Tax Reform and the Potential Effects on Farm Households

    The complexity of the current tax code, together with perceptions that it distorts economically efficient decisions and is inequitable, has led to calls for fundamental tax reform.
  • Feature

    Rising Concentration in Agricultural Input Industries Influences New Farm Technologies

    The leading agricultural input firms are multinational companies with R&D facilities located around the world. These global research networks allow large firms to develop and adapt new technologies to local conditions, meet national regulatory requirements for new product introductions, and achieve cost economies in some of their R&D activities.
  • Finding

    Expansion in Direct Payments Did Not Lead to More Crop Production

    ERS analysis finds that direct payments have little effect on agricultural production decisions. A more rigorous analysis accounting for farm and regional characteristics also found no evidence of direct payments having economically significant effects on production.
  • Finding

    Health Care Expenditures of Self-Employed Farm Households

    Farm households purchasing individual health insurance directly from private vendors are likely to spend more on health care than those with other sources of health insurance. Other things being equal, among all farm households, those without any insurance coverage have the lowest health care expenditures.
  • Feature

    New Evidence Points to Robust But Uneven Productivity Growth in Global Agriculture

    Total factor productivity in agriculture is showing rapid growth at the global level led by improved performance in China and Brazil, although the global rate of growth in harvested yield for major grains and oilseeds has slowed. Agricultural productivity growth may be slowing in some countries and regions and remains very low in food-insecure Sub-Saharan Africa.
  • Feature

    Farmland Values on the Rise: 2000-2010

    Farmland values have been rising but so have farm earnings. Historically low interest rates contribute to sustained high farmland prices and have helped improve the affordability of farmland. Strong farm earnings have dampened the impact of a significant downturn in residential land markets.
  • Feature

    Creating Rural Wealth: A New Lens for Rural Development Efforts

    Creating and maintaining a broad portfolio of wealth may be central to sustainable rural prosperity. However, the impacts that rural development strategies have on wealth and the impacts of existing wealth on those strategies are generally not well understood.
  • Finding

    R&D and Productivity Lag in Food Manufacturing

    R&D expenditures by the global food manufacturing industry reached $11.5 billion in 2007, with the U.S. accounting for $3.1 billion of the total. However, research spending relative to the value of production in U.S. food manufacturing is relatively low, at about 1.5 percent, compared with 10 percent for total U.S. manufacturing.
  • Statistic

    In the Long Run: Global Private-Sector Research Is Considerably Larger for Crop Inputs Than for Livestock

    In recent years, private-sector research expenditures directed at crop production inputs have been 3.5 to 5.5 times higher than those directed at livestock production inputs.
  • Finding

    Net Farm Income Is Expected To Decline in 2012 But Remain at a Near Record Level

    After 2 straight years of rapid growth, U.S. net farm income is forecast to decline by 6.5 percent in 2012 to $91.7 billion.
  • Finding

    Public Agricultural Research Investment Helps Determine Productivity Growth

    The main driver of agricultural productivity growth over the last 50 years has been the application of new technologies to farming. Robust productivity growth has allowed U.S. agriculture to hold down the cost and environmental consequences of growing more food and fiber.
  • Feature

    Switching the Payment Trigger for an Area-Based Revenue Program Could Increase Participation

    The ACRE program relies on State- and farm-level revenue payment triggers to provide producers with an alternative to price-based and direct payment commodity programs. Switching from a State-level trigger to one closer to the farm level would generally increase expected payments, but the impact would vary by crop, region, and market prices.
  • Statistic

    How Is Land in the United States Used? A Focus on Agricultural Land

    The ERS Major Land Uses series provides over 50 years of estimates of land in various uses, including cropland, pasture and range, and forest. These State and national estimates provide insights into changes in land use over time.
  • Statistic

    In the Long Run: Commodity Prices Vary More Than U.S. Cropland Acreage

    Since 1980, the variation in cropland used for crops has been relatively small, despite significant variation in real (adjusted for inflation) commodity prices.
  • Feature

    Government Commodity Payments Continue To Shift to Larger Farms, Higher Income Households

    As agricultural production has shifted to farms with larger sales, so, too, has the distribution of commodity-related program payments. Unless the design of commodity programs changes substantially, current payment trends are likely to continue.
  • Finding

    Biofuels and Land-Use Change: Estimation Challenges

    Most studies estimate significant increases in land-use requirements for agricultural production resulting from scaled-up biofuel production. Additional research on variables, such as projected crop yields, will be instrumental in narrowing the bands of uncertainty associated with such projections.
  • Feature

    Rural America Benefits From Expanded Use of the Federal Tax Code for Income Support

    Increased use of the tax code for policy goals has boosted incomes of rural taxpayers, who tend to have lower incomes and higher poverty than urban taxpayers.
  • Finding

    Net Farm Income Expected To Increase 20 Percent in 2011

    Net value added, net farm income, and net cash income—the three key U.S. farm sector financial indicators—are expected to improve in 2011.
  • Finding

    Contracting Expands for Field Crops

    Contracts cover a growing share of U.S. corn, soybean, and wheat production. Rising use likely reflects increased price variability, a wider availability of risk management tools, and structural change in agriculture.
  • Feature

    Income Growth in Developing Countries Can Increase U.S. Agricultural Exports

    According to USDA long-term projections, continued income growth will make developing countries the main source of the projected increases in global food demand and trade.
  • Statistic

    Research Areas

    Selected statistics on agriculture and trade, diet and health, natural resources, and rural America
  • Statistic

    Indicators

    Indicators tables from the September 2010 issue of Amber Waves magazine.
  • Finding

    Urban Areas Prove Profitable for Farmers Selling Directly to Consumers

    In 2007, $1.2 billion of farm products were sold directly to consumers by 136,800 farms, or 6 percent of all farms. Direct sales are highest in the urban corridors in the Northeast and on the West Coast.
  • Feature

    Accelerated Productivity Growth Offsets Decline in Resource Expansion in Global Agriculture

    The rate of growth in global agricultural productivity has accelerated in recent decades and accounts for an increasing share of expanding agricultural production.
  • Feature

    U.S. Farm Structure: Declining—But Persistent— Small Commercial Farms

    The continuing shift in production away from small commercial farms to larger farms is driven by financial pressures and aging operators.
  • Finding

    Is U.S. Agricultural Productivity Growth Slowing?

    Long-term agricultural productivity is driven by innovations in animal and crop genetics, chemicals, equipment, and farm organization. Public agricultural research funding, which historically has driven innovation, faces budgetary pressure in the U.S., therefore raising concerns about current and future U.S. productivity growth.
  • Finding

    Direct Payments Can Influence Farmers’ Production Decisions

    ERS has identified multiple avenues through which Production Flexibility Contract payments could influence agricultural production, including providing easier access to capital markets, changing farmers’ risk preferences, or affecting land values, labor markets, and/or farmers’ expectations about future payments.
  • Statistic

    Research Areas

    Research area charts from the September 2012 issue of Amber Waves
  • Finding

    Half of Farm Expenditures Are Spent Locally

    About half of all farm input and equipment expenditures were made locally in 2004. But over 40 percent of all U.S. farms are located in metro areas so that farm business expenditures may have relatively minor impacts on nearby urban communities and are unlikely to flow to more distant rural suppliers.
  • Statistic

    Indicators

    Selected statistics on agriculture and trade, diet and health, natural resources, and rural America.
  • Feature

    Removal of Government Controls Opens Peanut and Tobacco Sectors to Market Forces

    Farm legislation in the early 2000s eliminated longstanding supply controls and geographic restrictions on the production of peanuts and tobacco. The ensuing consolidation produced fewer but larger farms for each crop that are more efficient and responsive to market developments.
  • Finding

    New Traders in Corn, Soybean, and Wheat Futures Markets Scrutinized

    The growing participation of nontraditional traders in futures markets, such as index funds and swap dealers, has coincided with increasing volatility in commodity markets and a weakening of the usual correlation between futures and cash prices. ERS research, however, finds no link between these trends and the growing presence of nontraditional traders.
  • Finding

    Changing the Definition of a “Farm” Can Affect Federal Funding

    The Federal Government's definition of a farm affects farm statistics and influences the design and delivery of Federal farm programs. The definition also has implications for States because each State’s share of the national farm population is used to help allocate some Federal funding.
  • Feature

    Debt Landscape for U.S. Farms Has Shifted

    The capital structure of U.S. farms has changed over the last two decades. Fewer farms have outstanding debts than in the past, but debt carried is concentrated among fewer and larger farms.
  • Finding

    Rising Wheat Prices Outpace Input Costs

    Because wheat prices in 2009 remain well above historical levels, 90 percent of U.S. wheat producers are expected to have covered their production costs during 2009/09, despite rising prices of fuel, fertilizer and other inputs.
  • Finding

    Million-Dollar Farms Dominate Production of Some Commodities

    In 2007, 37,300 farms—2 percent of U.S. farming operations—accounted for half of U.S. agricultural production, according to the Agricultural Resource Management Survey. These farms were million dollar farms—that is, they had sales of $1 million or more.
  • Statistic

    Research Areas

    This page contains research area charts from the March 2009 issue of Amber Waves.
  • Finding

    Farm Income Expected to Decline in 2009

    Based on USDA’s early forecast, after 7 consecutive years of increases, U.S. cash receipts from crops are expected to drop by 10 percent from the record level reached in 2008. But at $162.4 billion, crop receipts in 2009 would still reflect the second highest level ever attained. Most of the decline is expected to come from corn and wheat sales, but nearly all crop commodities are forecast to have lower receipts in 2009.
  • Finding

    Federal Funding in Rural America Goes Far Beyond Agriculture

    For the first time in the nearly 40 years that ERS has been analyzing the geographic distribution of Federal spending, rural areas received more in total per capita Federal funding ($7,473) in fiscal year (FY) 2005 than urban areas ($7,391).
  • Finding

    Conservation Program Provision May Have Limited Impact on Underserved Farmer Participation

    Conservation program funding set-asides in the 2008 Farm Act may have little impact on the participation of beginning farmers in EQIP. Payments to beginning farmers in EQIP exceeded the set-aside funding amount in 2006, but regionally administered set-asides may increase participation in certain regions.
  • Statistic

    Data Feature

    U.S. agriculture relies almost entirely on productivity growth, primarily from innovation and changes in technology, to raise output.
  • Finding

    Conservation Reserve Program Acreage To Decline; Will Benefits Also Fall?

    The Conservation Reserve Program-the long-time centerpiece of U.S. agricultural conservation policy-is shrinking. The acreage cap will fall to 32 million acres beginning in October, 2009, and program acreage could fall farther without new enrollments. As CRP acreage declines, will environmental benefits decline at the same rate?
  • Finding

    New Payment Limits, Lower Income Cap Unlikely To Have Significant Impact

    Despite payment limits and an income cap on eligibility for farm program payments, a substantial portion of payments continue to go to large farms. The 2008 Farm Act makes a number of changes to these provisions but is unlikely to have a significant impact on the distribution of farm program payments.
  • Statistic

    Indicators

    Amber Waves presents the broad scope of ERS's research and analysis. The magazine covers the economics of agriculture, food and nutrition, the food industry, trade, rural America, and farm-related environmental topics. Available on the Internet and in print, Amber Waves is issued in print five times a year (February, April, June, September, and November). The Internet edition, or "eZine," includes links to web-only resources.
  • Statistic

    Research Areas

    Research area charts from the September 2008 issue of Amber Waves.
  • Statistic

    Research Areas

    Research area charts from the June 2008 issue of Amber Waves.
  • Statistic

    Indicators

    Indicators charts from the June 2008 issue of Amber Waves
  • Finding

    Producers Rely on Contracts To Manage Increased Price Risks

    U.S. agricultural production continues to shift away from cash markets and toward greater use of contracts. According to a new ERS study, agricultural contracts covered 41 percent of the value of agricultural production in 2005, up from 36 percent in 2001 and 28 percent in 1991.
  • Statistic

    Research Areas

    Research area charts from the April 2008 issue of Amber Waves.
  • Statistic

    Indicators

    Indicators tables from the April 2008 issue of Amber Waves.
  • Finding

    Agricultural Research Sustains Productivity Growth and Earns High Returns

    Twenty-seven studies evaluated the economic impact of U.S. agricultural research. Four-fifths of the studies found the annual social rate of return to research to be between 20 percent and 60 percent.
  • Finding

    Record Levels of Cash Receipts and Income Forecast in 2008

    The 2008 outlook for commodity market receipts, production expenses, and government payments translates into record amounts of all three measures of farm sector income-net value added, net farm income, and net cash income. Production and sales of feed grains and oilseeds will contribute significantly to record-level crop receipts in 2008. Total agricultural production expenses are forecast to increase 8.6 percent to $279.2 billion, largely due to higher feed and fertilizer costs. This article presents the latest farm income forecasts from ERS.
  • Statistic

    Indicators

    Amber Waves presents the broad scope of ERS's research and analysis. The magazine covers the economics of agriculture, food and nutrition, the food industry, trade, rural America, and farm-related environmental topics.
  • Finding

    Productivity Drives Growth in U.S. Agriculture

    U.S. agriculture relied entirely on growth in total factor productivity (TFP) rather than input accumulation to expand output between 1948 and 2004. TFP growth in agriculture accounted for 12 percent of all TFP growth in the U.S. private economy between 1960 and 2004.
  • Statistic

    Indicators, Research Areas

    Research area charts from the September 2007 issue of Amber Waves.
  • Feature

    U.S. Ethanol Expansion Driving Changes Throughout the Agricultural Sector

    A large expansion in ethanol production is underway in the United States, spurred by high oil prices and energy policies. Although corn is the primary feedstock used to produce ethanol in the United States, market adjustments to the ethanol expansion extend well beyond the corn sector to supply and demand for other crops, as well as to the livestock sector, farm income, government payments, and food prices. Adjustments in the agricultural sector to increased demand for biofuels will continue as interest grows in renewable sources of energy to lessen dependence on foreign oil.
  • Finding

    Managing Environmental Risk at the Rural-Urban Fringe

    Concerns over environmental quality by nonfarm residents in close proximity to farms may influence farmers' choice of management practices. Detailed analysis of corn farms yields insight into this relationship and its implications for the use of cropland best management practices.
  • Finding

    Lowering the Income Cap for Farm Payments Would Affect Few Farmers

    Policymakers have proposed lowering the $2.5-million income eligibility cap for farm program payments. An ERS analysis of a $200,000 adjusted gross income cap, the lowest proposed cap, shows that about 1.5 percent of all farms potentially would be affected by a $200,000 cap.
  • Statistic

    Indicators

    Indicators tables from the September 2007 issue of Amber Waves.
  • Finding

    Latest Indicators Point to Continued Strength of Farm Finances

    U.S. agriculture relied entirely on growth in total factor productivity (TFP) rather than input accumulation to expand output between 1948 and 2004. TFP growth in agriculture accounted for 12 percent of all TFP growth in the U.S. private economy between 1960 and 2004.