Farming and Farm Income

American agriculture and rural life underwent a tremendous transformation in the 20th century. Early 20th century agriculture was labor intensive, and it took place on many small, diversified farms in rural areas where more than half the U.S. population lived. Agricultural production in the 21st century, on the other hand, is concentrated on a small number of large, specialized farms in rural areas where less than a fourth of the U.S. population lives. The following material provides an overview of these trends, as well as trends in farm sector and farm household incomes.

The number of farms has leveled off at about 2.1 million

After peaking at 6.8 million farms in 1935, the number of U.S. farms fell sharply until leveling off in the early 1970s. Falling farm numbers during this period reflected growing productivity in agriculture and increased nonfarm employment opportunities. Because the amount of farmland did not decrease as much as the number of farms, the remaining farms have more acreage, on average—about 440 acres in 2016 versus 155 acres in 1935. About 2.06 million farms are currently in operation.

Productivity growth is still the major driver of U.S. agricultural growth

Technological developments in agriculture have been influential in driving changes in the farm sector. Innovations in animal and crop genetics, chemicals, equipment, and farm organization have enabled continuing output growth without adding much to inputs. As a result, even as the amount of land and labor used in farming declined, total farm output more than doubled between 1948 and 2015.

Higher animal/animal product cash receipts underlie 2017 forecast increase in U.S. gross cash farm income

Gross cash farm income (GCFI) includes income from cash receipts, farm-related income, and government farm program payments. GCFI is forecast at $409 billion (inflation-adjusted 2017 dollars) in 2017, versus $314 billion in 2000, with the increase largely due to higher cash receipts. After declining in 2015 and 2016, GCFI is forecast to increase in 2017 due largely to a forecast increase in animal/animal product cash receipts.

U.S. net farm income is forecast to rise in 2017 after declining in the prior 3 years

Gross farm income reflects the total value of agricultural output. Net farm income (NFI)—which reflects income from production in the current year—is calculated by subtracting farm expenses from gross farm income. NFI considers both cash and noncash income and expenses. Inflation-adjusted net farm income is forecast up 1.5 percent after declining in 2014 through 2016, as gross farm income is forecast near its 2016 value and production expenses are forecast to decline in inflation-adjusted terms.

Cash receipts for corn and soybeans accounted for close to half of all U.S. crop receipts in 2016

Crop cash receipts totaled $189.6 billion in 2016. Receipts from corn and soybeans accounted for 44 percent of the total.

Cattle/calf receipts accounted for 39 percent of U.S. animal and product cash receipts in 2016

Cash receipts for animals and animal products totaled $162.9 billion in 2016. Cattle/calf receipts accounted for 39 percent of that total, while poultry/egg receipts accounted for 24 percent and dairy receipts 21 percent.

Distribution of farms and value of production varies by farm type

Gross cash farm income (GCFI) includes income from commodity cash receipts, farm-related income, and government payments. Family farms (where the majority of the business is owned by the operator and individuals related to the operator) of various types together accounted for nearly 99 percent of U.S. farms. Small family farms (less than $350,000 in GCFI) account for 90 percent of all U.S. farms. Large-scale family farms ($1 million or more in GCFI) account for about 3 percent of farms but 42 percent of the value of production. This chart was revised March 7, 2017, see errata for details.

Most farmers receive off-farm income, but small-scale operators depend on it

Median total household income among all farm households ($76,735) exceeded the median for all U.S. households ($56,516) in 2015. Slightly less than half of U.S. farms are very small, with annual gross cash farm income under $10,000; the households operating these farms typically rely on off-farm sources for the majority of their household income. Median household income and income from farming increase with farm size; the typical household operating the largest commercial farms earned $361,057 in 2015, and most of that came from farming.