Nearly Half of Sales Come From Million-Dollar Farms
A growing percentage of U.S. farm commoditysales come from “million-dollarfarms,” with annual sales of $1 million ormore. Agricultural census data show thatthese farms accounted for 48 percent of allU.S. farm product sales in 2002, up from 23percent in 1982 (with sales measured inconstant 2002 dollars). The share of salesattributable to million-dollar farms rose asthe share from small farms (sales less than$250,000) declined (see charts).
The number of million-dollar farmsmore than tripled between 1982 and 2002to 28,700, or 1.3 percent of all U.S. farms.Twelve percent of million-dollar farms hadsales of $5 million or more in 2002, andthey accounted for about one-fourth of U.S.farm sales.
By 2005, the number of million-dollarfarms had increased to 35,060, according toUSDA’s Agricultural Resource ManagementSurvey. The increase reflects—in part—good years for the farm sector since the 2002Census was conducted. Twenty-one percentof million-dollar farms were located in thePacific States of California, Oregon, andWashington, with 16 percent in Californiaalone.
The number of operators per farmincreases with sales since commercial-sizedfarms often require more management andlabor than one individual can provide. Suchmultiple-operator farms accounted for 69percent of million-dollar farms in 2005,compared with 43 percent of farms in general.One-third of million-dollar farms withmore than one operator were also multiplegenerationfarms (at least 20 years’ differencebetween the ages of the oldest andyoungest operators). Multiple-generationfarms made up a larger share of million-dollarfarms than any other sales class, probablybecause million-dollar farms hadenough business to keep more than onegeneration employed.
Most million-dollar farms (82 percent)were family operations in 2005, where themajority of the business is owned by individualsrelated by blood, marriage, or adoption.The other 18 percent were nonfamilyfarms, including 7 percent organized as nonfamilycorporations. Direct ownership ofmillion-dollar farms by large, publicly heldcorporations was negligible since nonfamilycorporations with more than 10 stockholdersaccounted for roughly 1 percent of million-dollar farms.
The situation was similar for the largestmillion-dollar farms (those with sales of$5 million or more): 69 percent were classifiedas family operators and 17 percentwere owned by nonfamily corporations.Nonfamily corporations with more than 10stockholders accounted for 1 percent of the$5-million farms.
Structure and Finances of U.S. Farms: Family Farm Report, 2007 Edition, by Robert A. Hoppe, Penni Korb, Erik O'Donoghue, and David E. Banker, USDA, Economic Research Service, June 2007