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The distribution of beginning farms reflects local farm economies

Friday, December 19, 2014

In large part, the regional distribution of beginning farms mirrors that of all farms, but there are some differences. Beginning farms are located all across the country, but overall, the South is home to the largest percentage of beginning farms: 47 percent, which is about 5 percent higher than its share of all farms. The South also has the largest percentage of small beginning farms. Large-scale beginning farms are most likely to be in the Midwest, but with 30 percent of the nation’s beginning farms, the Midwest has fewer than its 37 percent share of all farms. The concentration of cash grain farms in the Midwest, which on average are larger than farms specializing in other types of commodities, not only explains the region’s higher shares of mid-size and large scale beginning farms, but may also explain the fact that fewer of its farms are operated by beginning farmers. This chart is found in the ERS topic page on Beginning & Disadvantaged Farmers, updated October 2014.

Beginning farmers differ demographically from established farmers

Thursday, November 6, 2014

In 1982, the Census of Agriculture reported 38 percent of principal operators had operated their farm for less than 10 years, but by 2007, this number had declined to 26 percent. In 2012, beginning farms—those headed and completely operated by farmers with 10 or fewer years of experience—made up just 17 percent of family farms. Although beginning farmers are more likely to be younger than established farmers—17 percent are under age 35, and their average age is 11 years younger (49 versus 60)—nearly 13 percent of beginning farmers are 65 or older. Beginning farmers are also more likely to be female than established farmers; nearly one in five principal operators of a beginning farm is female. Beginning farmers are also more likely than established farmers to have at least a 4-year college degree. The differing demographic profiles of beginning and established farmers may signal change for the sector as older farmers retire. This chart is from the ERS topic page on Beginning & Disadvantaged Farmers, updated October 2014.

Share of women farm operators varies widely by specialization

Monday, October 6, 2014

According to the 2012 Census of Agriculture, women are the principal operators of nearly 14 percent of U.S. farms, but their share varies widely by farm specialization. Women operate a disproportionately large portion of sheep/goat farms and “other livestock farms,” three-quarters of which are horse farms. Farms in these two categories tend to be small; 46 percent of sheep/goat farms and 57 percent of other livestock farms have sales less than $1,000, compared with only 20 percent of all U.S. farms. Establishments of this size qualify as farms under USDA’s definition because they have sufficient acres of crops or head of livestock to indicate they could normally have $1,000 or more in sales. For example, five horses or ponies would qualify an establishment as a farm even if the operator has no plans to sell the animals. On the other hand, 1 percent of farms with a woman principal operator (2,486 farms) have sales of $1 million or more. This chart is an update of one found in the ERS report, Characteristics of Women Farm Operators and Their Farms, EIB-111, April 2013.

New farmers account for a small share of agricultural production

Tuesday, June 17, 2014

With the number of new entrants declining, encouraging and supporting new farmers is a continuing policy goal. According to Census of Agriculture data, 38 percent of principal operators had less than 10 years of farming experience in 1982; by 2007, only 26 percent had such experience. In 2012, beginning farms—farms headed and completely operated by farmers with 10 or fewer years of experience—made up 17.2 percent of family farms and collectively accounted for only about 6-7 percent of the land in farms and the value of farm production. Beginning farm operators tend to hold fewer farm assets and have a median farm net worth that is roughly half the median farm net worth of established farmers. Not all beginning farmers are young; on average, the principal operator of a beginning farm is 49 years old. The unique demographic and production profiles of beginning farmers suggest the strategies for supporting them may need to be different than those aimed at established farmers. This chart is found in “Beginning Farmers and Ranchers and the Agricultural Act of 2014” in the June 2014 Amber Waves online magazine.

Small acreage farm numbers and sales differ by commodity specialization

Thursday, May 1, 2014

According to the 2007 Census of Agriculture, approximately 294,000 farms, or 13 percent of all U.S. farms, operated on 10 or fewer acres. Collectively, these small acreage (SA) farms operated only 0.18 percent of all U.S. farmland in 2007, but were responsible for approximately $9 billion in farm sales, or 3 percent of the U.S. total. More than half of all SA farms specialized in three broad product groups—other animals (primarily horses), cattle, and fruit and tree nuts; however, when combined, farms with these specialties accounted for only one-fifth of SA sales in 2007. Seventy-five percent of SA sales were in three other product groups—poultry and eggs, hogs and pigs, and greenhouse/nursery—though these products were produced on only 15 percent of SA farms. Most SA farms produce very little, if any, farm products for sale; only about one out of six reported gross sales of $10,000 or more in 2007. This chart can be found in Working the Land With 10 Acres: Small Acreage Farming in the U.S., EIB-123, April 2014.

Median farm household income has exceeded median U.S. household income in recent years

Thursday, April 3, 2014

Since the 1980s, ERS has reported an income measure for farm operator households comparable to the U.S. Census Bureau's measure for all U.S. households. From 1991 to 1997, median farm household income (which is driven almost entirely by off-farm income) was consistently less than median U.S. household income. Since 1998, however, the opposite has been true. The reversal may reflect greater returns to farm household skills employed off the farm, in addition to other factors such as changes in the composition of the farm population. As such, the size of the median household income gap reflects differences in the location and type of nonfarm jobs held by the typical farm and U.S. household, as well as variation in farm income. This chart is found in the ERS topic page on Farm Household Well-being, updated February 2014.

Editor's Pick 2013:<br>Small family farms account for most U.S. farms and a majority of farm assets

Friday, December 20, 2013

Ninety-seven percent of U.S. farms are family farms where the majority of the business is owned by the operator and individuals related to the operator. The remaining 3 percent are nonfamily farms, which produced 15 percent of the value of agricultural output in 2011. Two features of family farms stand out. First, there are many small family farms (having less than $250,000 in annual sales); together, they account for 87 percent of all U.S. farms. Second, large-scale family farms account for most of the Nation’s agricultural production—70 percent in 2011, as measured by value of output. The share of farm assets held by small farms is substantially higher than their 15-percent share of production. Small-scale family farms hold about 56 percent of all farm assets. The disproportionate asset holdings of smaller farms reflects their overinvestment, particularly in land and dwellings, for purposes other than production, and economies of size enjoyed by larger farms that allow them to produce more with the resources they control. This chart updates one found in the 2010 Edition of the ERS report, America’s Diverse Family Farms, with 2011 Agricultural Resource Management Survey data recently added to the ERS ARMS Web tool. Originally published on Wednesday, February 6, 2013.

Multiple-operator farms are prevalent among large and very large family farms

Friday, October 25, 2013

Commercial-sized farms often require more management and labor than an individual can provide. Additional operators can provide the necessary labor and management, and possibly other resources such as capital or farmland. Having a secondary operator may also provide a successor when an older principal operator phases out of farming. Multiple-operator farms are particularly prevalent among large and very large family farms. In 2011, 42 percent of all U.S. farms were multiple-operator farms, while 73 percent of very large family farms had more than one operator. Because farms are generally family businesses, one would expect family members to serve as secondary operators. In fact, 73 percent of all secondary operators were spouses. About 12 percent of all multiple-operator farms (and 5 percent of all farms) were multiple-generation farms in 2011, with at least 20 years' difference between the ages of the oldest and youngest operators. The presence or absence of younger related operators may affect farm expansion and contraction decisions, depending on the principal operator's lifecycle position. This chart is found in the ERS topic on Farm Structure and Organization, updated September 2013.

The distributions of women-operated farms and farm sales differ widely among commodity specializations

Friday, June 7, 2013

According to the most recent Census of Agriculture, women-operated farms—farms where a woman was the principal operator—numbered 306,200 in 2007 (13.9 percent of all U.S. farms). Most women-operated farms (about 62 percent in 2007) specialized in grazing livestock or miscellaneous crops, but these are mostly small operations that contributed relatively little (16 percent) to the total sales of women-operated farms. A large majority of women-operated grazing livestock farms and ranches had less than $10,000 in annual sales, and 98 percent of miscellaneous crop farms had no sales in 2007. Most sales by women-operated farms (nearly 72 percent in 2007) came from farms specializing in poultry and eggs, specialty crops, grains and oilseeds, and dairy. While accounting for only about 20 percent of women-operated farms, average annual sales exceeded $130,000 for farms with these specializations. This chart is found in the May 2013 Amber Waves.

Women-operated farms and ranches increased in all sales classes between 1982 and 2007

Thursday, May 2, 2013

The total number of women-operated farms—where the person most responsible for day-to-day business decisions is a woman—more than doubled between 1982 and 2007. In addition, each sales class (adjusted for price changes) experienced a gain. In contrast, the number of men-operated farms declined by 10 percent, and men-operated farms increased in only the largest and smallest sales classes. Since the number of women-operated farms grew more rapidly than that of men-operated farms in each sales class, women principal operators increased their share of farms in every sales class during the past 25 years. Women operators accounted for 14 percent of all farms, but their share of farms with no or very low sales was even larger, at roughly 21 percent. For sales exceeding $100,000, however, women’s share of farms remained small, in the 4- to 5-percent range. This chart is found in the ERS report, Characteristics of Women Farm Operators and Their Farms, EIB-111, April 2013.

Farms involved in rural development related activities vary by type of activity

Thursday, March 28, 2013

While rural development efforts generally focus on the nonfarm economy in the United States, over the last 10 years, several USDA Rural Development programs have put increased emphasis on funding farm-related business activities associated with renewable energy, local/regional food industries, and the use of farm and ranch natural resources. Using data from the 2007 Agricultural Resource Management Survey, the characteristics of farms involved in organic farming, value-added agriculture, direct marketing, agritourism, and energy/electricity production are compared in this chart. Household wealth and income are important indicators of financial capacity, or the ability to make financial investments in farm activities. Average farm household net worth was highest for agritourism farms ($2.0 million) and lowest for direct marketing farms ($631,000). Total household income exhibited a different pattern and was highest for energy/electricity farms ($165,000 annually) and value-added farms ($90,000 annually), on average. The income generated by these rural development-related activities is considered part of farm income (which was highest, on average, for energy/electricity and organic farms, and negative for agritourism farms). This chart comes from the ERS report, Farm Activities Associated With Rural Development Initiatives, ERR-134, May 2012.

Beginning farmers are less likely to inherit or purchase land from a relative than are established farmers

Wednesday, March 20, 2013

Beginning farms (those with an operator with 10 or fewer years of experience) made up 21 percent of all family farms in 2010, and since they are smaller, on average, than established farms, they accounted for 10 percent of the value of production on family farms. Beginning farmers often report that their biggest challenge getting started in farming is access to enough capital and farmland to operate at a size capable of earning a sufficient profit. Not surprisingly, beginning farm operator’s households have lower farm and nonfarm net worth than established farm households. While most beginning farms include some operator-owned land, they are more likely than established farms to have only rented land. For U.S. farmers, in general, the most common way to have acquired “owned land” for their operation is to have purchased it from a nonrelative. But established farms of all size classes are more likely than beginning farms to have inherited or purchased their owned land from relatives. This chart is drawn from Beginning Farmers and Ranchers at a Glance.

Beginning farms participate less than established farms in Government farm payment programs

Friday, February 22, 2013

Consistent with their commodity specializations, beginning farms—those whose operators have 10 or fewer years of farm operator experience—are less likely than more established farms to participate in Government direct-payment programs. Most farm programs focus on cash grain production while relatively few beginning farms specialize in cash grains. As a result, while they represented 22 percent of all farms in 2011, beginning farms accounted for only 14 percent of all farms that received Government payments, and received only 9 percent of all payments that year. However, beginning farmers and ranchers do avail themselves of other farm programs targeted at their needs, including farm loans, the Conservation Reserve Program’s Transition Incentive Program, and the Beginning Farmer and Rancher Development Program. This chart is found in the ERS report, Beginning Farmers and Ranchers at a Glance, EB-22, January 2013.

Small family farms account for most U.S. farms and a majority of farm assets

Wednesday, February 6, 2013

Ninety-seven percent of U.S. farms are family farms where the majority of the business is owned by the operator and individuals related to the operator. The remaining 3 percent are nonfamily farms, which produced 15 percent of the value of agricultural output in 2011. Two features of family farms stand out. First, there are many small family farms (having less than $250,000 in annual sales); together, they account for 87 percent of all U.S. farms. Second, large-scale family farms account for most of the Nation’s agricultural production—70 percent in 2011, as measured by value of output. The share of farm assets held by small farms is substantially higher than their 15-percent share of production. Small-scale family farms hold about 56 percent of all farm assets. The disproportionate asset holdings of smaller farms reflects their overinvestment, particularly in land and dwellings, for purposes other than production, and economies of size enjoyed by larger farms that allow them to produce more with the resources they control. This chart updates one found in the 2010 Edition of the ERS report, America’s Diverse Family Farms, with 2011 Agricultural Resource Management Survey data recently added to the ERS Web tool.

Many farm operators are retirement age

Thursday, January 24, 2013

One of the most striking characteristics of U.S. principal farm operators—the operator most responsible for running the farm—is their advanced age. In 2011, about 32 percent of principal farm operators were at least 65 years old, compared with less than 11 percent of nonagricultural self-employed U.S. workers. Not surprisingly, retirement farms--those operated by farmers who consider themselves retired--had the highest percentage of older operators (72 percent). Among the principal operators of larger family farms (those with annual sales of at least $250,000) and operators of smaller farms that consider farming their primary occupation, the share of older operators declines as farm size increases. Thirty-eight percent of low-sales farm (under $100,000 in sales per year) operators are at least 65 years old, while 17 percent of operators running very large farms (with annual sales of $500,000 or more) are that old. The advanced age of so many farm operators is understandable given that the farm is the home for most farmers and they can phase out of farming gradually. This chart updates one found in the ERS report, America’s Diverse Family Farms, 2010 Edition, with data from the 2011 Agricultural Resource Management Survey, added to the ERS Web tool in November 2012.

Young operators are not uncommon on farms involved in rural development-related on-farm activities

Monday, August 13, 2012

Five on-farm rural development-related activities were examined in a recent ERS study. Using data from the 2007 Agricultural Resource Management Survey, the characteristics, such as operator age, of farms participating in organic farming, value-added agriculture, direct marketing, agritourism, or renewable energy/electricity production were considered. With the exception of agritourism farms, younger farmers (under 45 years of age) were more likely to operate development-related farms than they were for all other farms. Young operators were most common on energy/electricity farms (26 percent). Older farmers (65 years of age and older) played a larger role as operators of agritourism farms (40.4 percent) than for the other farm activities. This chart comes from Farm Activities Associated With Rural Development Initiatives, ERR-134, May 2012.

Household income for beginning farms is high due to off-farm sources of income

Thursday, August 9, 2012

In 2010, beginning farms or ranches accounted for 21 percent of family farms, 10 percent of the value of production by family farms, and 9 percent of acres operated by family farms. The average income of families operating beginning farms was nearly $93,000, which is significantly higher than the average household income for families with established farms (roughly $82,000). On average, beginning farms lost money farming and relied entirely on their off-farm income sources. However, beginning farms that were larger in size, had a principal operator whose major occupation was farming, specialized in crop commodities, dairy, or poultry, participated in government direct payment programs, or engaged in production and marketing contracts were more likely to have positive farm incomes. This chart is from the Beginning & Disadvantaged Farmers topic page on the ERS website, updated May 29, 2012.

Age of principal operator varies with amount of farm sales

Friday, June 29, 2012

In 2007, roughly 30 percent of principal farm operators were at least 65 years old. In contrast, farmers less than 35 years old made up roughly 5 percent of principal operators. Older operators' share of farms declined with sales class, reflecting their gradual withdrawal from farming. For example, older operators accounted for more than 30 percent of farms with sales up to $99,999, but only 17 percent of farms with sales greater than $500,000. The prevalence of older farm operators in smaller sales classes is understandable given the low sales requirements to qualify as a farm. Most operators live on their farm, and farmers can phase out of farming over a decade or more while easily retaining enough land or livestock to produce $1,000 in sales. Improved health and advances in farm equipment also allow operators to farm later in life than in past generations. The data for this chart is found in the ERS report, The Changing Organization of U.S. Farming, EIB-88, December 2011.

Farm populations targeted by USDA programs

Thursday, May 17, 2012

The 2008 Farm Act established or modified several USDA farm programs to increase the participation of beginning farmers or ranchers, women and minority principal operators (so-called socially disadvantaged farmers), and limited-resource farmers (based on their low farm sales and household income), In 2010, 39 percent of all family farms were classified as one or more of these targeted farm groups. They are less likely to participate in government farm payment programs than other farm households (25 compared to 42 percent) and they receive a small share (28 percent) of the total payments relative to their numbers (39 percent of all family farms). However, the share of payments they receive is on par with their share of the total value of agricultural products they produce (17 compared to 16 percent). This chart appears in Beginning Farmers, Demographics, and Labor Allocations, part of the Farm Household Economics and Well-Being topic on the ERS website, updated November 2011.

Beginning farmers are located across the country

Tuesday, April 17, 2012

USDA defines beginning farmers and ranchers as those who have operated a farm or ranch for 10 years or less either as a sole operator or with others who have operated a farm or ranch for 10 years or less. Beginning farmers are located across the country. In some counties, more than half of all farms are beginning farms. A variety of factors affect the share of farmers classified as beginning in any particular county. Access to farmland affects the number of beginning farmers, and access is affected by competition for land. Urbanization also affects resource allocations for beginning farms, many of which rely on proximity to off-farm job opportunities and access to specialized farm markets. This map is found in the ERS report, Beginning Farmers and Ranchers, EIB-53, May 2009.