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 smaller 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 U.S. farms continues to decline slowly

After peaking at 6.8 million farms in 1935, the number of U.S. farms fell sharply until the early 1970s. Rapidly falling farm numbers during the earlier period reflected growing productivity in agriculture and increased nonfarm employment opportunities. Since then, the number of U.S. farms has continued to decline, but much more slowly. In the most recent survey, there were 2.01 million U.S. farms in 2021, down from 2.20 million in 2007. With 895 million acres of land in farms in 2021, the average farm size was 445 acres, only slightly greater than the 440 acres recorded in the early 1970s.

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 nearly tripled between 1948 and 2019.

U.S. gross cash farm income to increase in 2022

Gross cash farm income (GCFI) is annual income before expenses and includes cash receipts, farm-related income, and Government farm program payments. GCFI is forecast at $577 billion in calendar year 2022, versus $341 billion (inflation-adjusted 2022 dollars) in 2002, with the increase across time primarily due to higher cash receipts. If forecasts are realized, GCFI would increase 10.8 percent in 2022 and be at its highest level on record.

U.S. net farm income flat in 2022 following growth in 2021

Gross farm income reflects the total value of agricultural output plus Government farm program payments. Net farm income (NFI)—which reflects income after expenses from production in the current year—is calculated by subtracting farm expenses from gross farm income. NFI considers both cash and noncash income as well as expenses and accounts for changes in commodity inventories. Inflation-adjusted net farm income is forecast to decrease 0.6 percent in calendar year 2022, to $147.7 billion. This follows NFI growth in 2021 to levels not seen since 2013. Inflation-adjusted farm production expenses are projected to increase 11.3 percent in 2022.

Corn, soybeans accounted for half of all U.S. crop cash receipts in 2021

Crop cash receipts totaled $237.8 billion in calendar year 2021. Receipts from corn and soybeans accounted for $119.7 billion (50.3 percent) of the total.

Cattle/calf receipts comprised the largest portion of U.S. animal/animal product receipts in 2021

Cash receipts for animals and animal products totaled $195.8 billion in calendar year 2021. Cattle/calf receipts accounted for $72.9 billion (37.2 percent) of that total, while poultry and eggs receipts accounted for $46.1 billion (23.5 percent), and dairy receipts accounted for $41.8 billion (21.3 percent).

Most farms are small, but large-scale farms account for almost half of production

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 98 percent of U.S. farms in 2020. Small family farms (less than $350,000 in GCFI) accounted for 89 percent of all U.S. farms. Large-scale family farms ($1 million or more in GCFI) accounted for about 3 percent of farms but 46 percent of the value of production.

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

Median total household income among all farm households ($80,060) exceeded the median total household income for all U.S. households ($67,521) in 2020. Median household income and income from farming increase with farm size and most households earn some income from off-farm employment. About 89 percent of U.S. farms are small, with gross cash farm income less than $350,000; the households operating these farms typically rely on off-farm sources for most of their household income. In contrast, the median household operating large-scale farms earned $402,780 in 2020, and most of that came from farming.

Last updated: Thursday, September 01, 2022

For more information, contact: Kathleen Kassel