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Intellectual property rights for new plant varieties have expanded

Monday, January 8, 2018

Intellectual property rights are intended to offer incentives for innovation by protecting new inventions from imitation and competition. When the modern U.S. Patent and Trademark Office was established in 1836, new plant varieties were considered products of nature and, therefore, not eligible for protection under any form of intellectual property. In 1930, asexually reproducing plants were the first to receive protection through plant patents, which have been issued primarily for fruits, tree nuts, and horticultural species. The remainder of the plant kingdom, including a broad range of commercial crops, became eligible for protection in 1970 with the introduction of plant variety protection certificates (PVPCs). However, PVPCs had exemptions for farmers to save seeds and for research uses. Full patent protection (without these exemptions) arrived in 1980 with the U.S. Supreme Court decision Diamond v. Chakrabarty. This ruling extended utility patent protection—the type of protection provided to most inventions in other areas—to plants. Despite being available for the least amount of time, annual utility patent grants for plant cultivars and lines have rapidly overtaken PVPCs and reached similar levels as plant patents. The rapid rise of utility patents mirrored the rapid rise in private research and development in the seed and agricultural biotech sector over a similar period. This chart updates data found in the ERS report Agricultural Resources and Environmental Indicators, 2006 Edition.

Share of production by type of farm varies across commodities, 2016

Monday, December 18, 2017

Farm production has been shifting to larger farms for many years, but this trend varies by commodity. In 2016, over 45 percent of U.S. farm production occurred on the 3 percent of U.S. farms classified as large-scale family farms—with at least $1 million in annual gross cash farm income before expenses (GCFI). These farms accounted for half of hog production and two-thirds of the production of both dairy and high-value crops like fruits and vegetables. Large-scale farms also contributed 60 percent of cotton’s value of production. By comparison, small family farms—with less than $350,000 GCFI—accounted for 90 percent of U.S. farms, but contributed less than 23 percent to U.S. farm production. These small farms, however, contributed larger shares of production for poultry (59 percent) and hay (50 percent). Nonfamily farms, which accounted for 1 percent of U.S. farms, contributed about 10 percent of U.S. farm production. This chart appears in the ERS report America’s Diverse Family Farms, 2017 Edition, released December 2017.

Share of land used for agricultural purposes has decreased 11 percentage points since 1949

Friday, December 8, 2017

The U.S. land area totals just under 2.3 billion acres. Land used in agriculture has become less common over time, declining from 63 percent in 1949 to 52 percent in 2012 (the latest data available). Gradual declines have occurred in cropland, while grazed forestland has decreased more rapidly. In 2012, 392 million acres of agricultural land were in cropland (18 percent less than in 1949), 655 million acres were in pasture and range (4 percent more), 130 million acres were in grazed forestland (59 percent less), and 8 million acres were in farmsteads and farm roads (45 percent less). In contrast, land used for rural parks and wilderness (included in nonagricultural special uses) has increased by 226 million acres since 1949, contributing to the relative growth in nonagricultural land use over time. Urban land, which represents a relatively small share of the U.S. land base, has nearly tripled in area since 1949 to accommodate economic and population growth. This chart appears in the December 2017 Amber Waves data feature, "A Primer on Land Use in the United States."

Farm sector profits forecast to stabilize in 2017

Wednesday, November 29, 2017

After several years of decline, net farm income in 2017 for the U.S. farm sector as a whole is forecast to be relatively unchanged at $63.2 billion in inflation-adjusted terms (up about $0.5 billion, or 0.8 percent), while inflation-adjusted U.S. net cash farm income is forecast to rise almost $2.0 billion (2.1 percent) to $96.9 billion. Both profitability measures remain below their 2000-16 averages, which included substantial increases in crop and animal/animal product cash receipts from 2010 to 2013. Net cash farm income and net farm income are two conventional measures of farm sector profitability. Net cash farm income measures cash receipts from farming as well as cash farm-related income, including government payments, minus cash expenses. Net farm income is a more comprehensive measure that incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income. Find additional information and analysis on ERS’s Farm Sector Income and Finances topic page, released November 29, 2017.

Cropland is shifting to larger farms, even as average size changes little

Friday, November 24, 2017

Errata: On November 24, 2017, the Chart of Note article “Cropland is shifting to larger farms, even as average size changes little” was reposted to correct a mislabeling in the chart’s legend.

U.S. cropland has shifted to larger farms over time. However, between 1982 and 2012, the average (or mean) acres of cropland and harvested cropland changed little. Acreage averages have been stable because the largest and smallest crop farms grew in number, while farms in the middle declined. With only small changes in total cropland and total crop farms, average acreages changed minimally. The trend in midpoint acreage—at which half of all cropland acres are on farms with more cropland than the midpoint and half are on farms with less—captures the consolidation of cropland better than average acreage. As cropland shifts to larger farms, the midpoint increases. Between 1982 and 2012, the midpoint acreage for both cropland and harvested cropland roughly doubled to about 1,200 acres each. This shift was aided by technologies that allowed a single farmer or farm household to farm more acres. This chart appears in the ERS report America's Diverse Family Farms, 2016 Edition, released December 2016.

Productivity has driven the growth in U.S. agricultural output

Tuesday, November 14, 2017

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 while using less inputs. As a result, even as the amount of land and labor used in farming declined, total agricultural output more than doubled between 1948 and 2015. During this period, agricultural output grew at an average annual rate of 1.48 percent, compared to 0.1 percent for total farm inputs (including land, labor, machinery, and intermediate goods). The major source of output growth is the increase in agricultural productivity, as measured by total factor productivity (TFP)—the difference between the growth of aggregate output and growth of aggregate inputs. Between 1948 and 2015, TFP grew at an average annual rate of 1.38 percent, accounting for more than 90 percent of output growth over that period. This chart appears in the ERS data product Agricultural Productivity in the U.S., updated October 2017.

Rented U.S. farmland was concentrated in the Corn Belt, Northern Plains, and Delta States

Tuesday, October 31, 2017

Of the 914 million acres of land in U.S. farms in 2012 (the latest data), 61 percent were owner-operated. The remaining land was rented, either from another farm operator or from a non-operator (an owner not actively engaged in farming). Farmland tenure arrangements vary across the country, with higher shares of renting and non-operator ownership in the Midwest and Plains regions. This geographic pattern is due to commodity specialization: the majority of land used to grow cotton and cash grains (such as rice, corn, soybeans, and wheat) is rented. According to data from the 2014 TOTAL Survey, cropland (54 percent) is more likely to be rented than pastureland (28 percent). This pattern is attributable to several factors, including the relatively low cost of purchasing pastureland compared to cropland. This chart appears in the August 2017 ERS report Major Uses of Land in the United States, 2012.

Low-income countries had the highest rate of agricultural growth, but middle-income countries had the highest rate of productivity growth

Monday, October 16, 2017

During 2001-14, low-income countries accounted for only 5 percent of global agricultural production. But these countries achieved a higher rate of agricultural output growth than middle- or high-income countries, at nearly 4 percent per year during that period. Most of that development came from increasing the use of land and other inputs, rather than from raising the total productivity of those inputs. Middle-income countries, on the other hand, accounted for 40 percent of global agricultural production and achieved growth that was nearly as high (more than 3.5 percent per year), largely because of improving productivity. For high-income countries, which accounted for 25 percent of global production, agricultural growth averaged under 2 percent per year, even as land and other inputs employed in the sector fell. Improvements in productivity account for all the output growth in high-income countries. Overall, most gains in global agricultural productivity have come from middle-income countries. Strengthening the capacity of national agricultural research and extension systems in large middle-income countries (such as Brazil and India) has been a key determinant of their agricultural productivity performance. This chart appears in the ERS topic page for International Agricultural Productivity, updated October 2017.

Texas accounted for 6 percent ($21 billion) of U.S. farm sector cash receipts in 2016

Wednesday, October 11, 2017

Each August, as part of the its Farm Income data product, ERS produces estimates of the prior year’s cash receipts—the cash income the farm sector receives from agricultural commodity sales. This data product includes State-level estimates, which can help offer background information about States subject to unexpected changes that affect the agricultural sector, such as the recent hurricane that struck Texas. In 2016, U.S. cash receipts for all commodities totaled $352 billion. Texas contributed about 6 percent ($21 billion) of that total, behind only California and Iowa. Cattle and calves accounted for 40 percent ($8 billion) of cash receipts in Texas, compared to 13 percent nationwide. Only Nebraska had higher cash receipts for cattle and calves in 2016. Texas led the country in cash receipts from cotton at almost $3 billion (13 percent of the State’s receipts), accounting for 46 percent of the U.S. total for cotton. Milk and broilers each accounted for 9 percent of cash receipts in Texas. The State ranked sixth in both milk and broiler cash receipts nationwide. This chart uses data from the ERS U.S. and State-Level Farm Income and Wealth Statistics data product, updated August 2017.

Public sector spending on agricultural research declining in the United States and Western Europe, but rising in China, India, and Brazil

Wednesday, September 13, 2017

U.S. public sector funding for agricultural R&D is falling, both in absolute terms and relative to major countries and regions. Between 1990 and 2013, the U.S. share of spending among nations with major public agricultural R&D investments fell from about 23 to 13 percent. This decline was driven by a combination of falling U.S. spending (lately mirrored in Western Europe) and rapidly rising spending in developing countries such as India and, especially, China. Chinese government spending on agricultural R&D rose nearly eightfold in real (inflation-adjusted) terms between 1990 and 2013, surpassing U.S. spending in 2008 and more than doubling it in 2013. In simple dollar terms, the decline in U.S. public sector funding has been more than offset by a rise in U.S. private research spending, but the two are not substitutes, as each tends to specialize in different kinds of R&D. This chart appears in the November 2016 Amber Waves feature, "U.S. Agricultural R&D in an Era of Falling Public Funding."

2017 net farm income and net cash farm income forecast up over 2016

Wednesday, August 30, 2017

After several years of declines, inflation-adjusted U.S. net farm income is forecast to increase about $0.9 billion (1.5 percent) to $63.4 billion in 2017, while inflation-adjusted U.S. net cash farm income is forecast to rise almost $9.8 billion (10.8 percent) to $100.4 billion. The expected increases are led by rising production and prices in the animal and animal product sector compared to 2016, while crops are expected to be flat. The stronger forecast growth in net cash farm income, relative to net farm income, is largely due to an additional $9.7 billion in cash receipts from the sale of crop inventories. The net cash farm income measure counts those sales as part of current-year income, while the net farm income measure counts the value of those inventories as part of prior-year income (when the crops were produced). Despite the forecast increases over 2016 levels, both profitability measures remain below their 2000-16 averages, which included surging crop and animal/animal product cash receipts from 2010 to 2013. Net cash farm income and net farm income are two conventional measures of farm sector profitability. Net cash farm income measures cash receipts from farming as well as farm-related income including government payments, minus cash expenses. Net farm income is a more comprehensive measure that incorporates non-cash items, including changes in inventories, economic depreciation, and gross imputed rental income. Find additional information and analysis on ERS’s Farm Sector Income and Finances topic page, released August 30, 2017.

Different forms of outreach can increase farmer participation in County Committee elections

Friday, August 18, 2017

County Committees (COC) are critical to the delivery of farm support programs and make numerous program decisions, such as whether or not a producer is in compliance with the program’s eligibility requirements. However, participation in COC elections have declined over time. An ERS experiment tested the impact of using different forms of outreach on voter participation during the 2015 COC elections. Some voters received ballots with information about candidates printed on the outside. Other voters received postcards with deadlines and candidate information. A third group of voters received both, and a baseline group received neither. Compared to the baseline, the experiment found that printing candidate information on the outside of the ballot plus sending postcards increased voter participation by nearly 3 percent. This information may offer a relatively low-cost outreach strategy to encourage participation in future elections. This chart appears in the ERS report Economic Experiments for Policy Analysis and Program Design: A Guide for Agricultural Decisionmakers, released August 2017.

The share of beginning midsize farms held steady from 2005 to 2014

Tuesday, August 15, 2017

The aging of the overall farm population raises questions about whether there are enough beginning farms to replace those that exit farming. Between 2005 and 2014, the share of beginning farms generally declined across all farm sizes, though overall farm numbers were relatively steady during this period. A beginning farm is one where all operators have 10 years or less farming experience. Very-low sales farms—those with annual gross cash farm income (GCFI) under $10,000—had the most beginning farms across these years, but also saw the greatest decline: from 27 percent in 2005 to 24 percent in 2014. By comparison, the share of beginning midsize farms—those with GCFI between $350,000 and $999,999—hovered around 9 percent during this period. In 2014, that represented about 12,000 midsize farms. This chart and the factors affecting these results appear in the ERS report The Changing Organization and Well-Being of Midsize U.S. Farms, 1992-2014, released October 2016.

USDA provides operating loans to farmers through different programs

Thursday, August 3, 2017

The USDA Farm Service Agency (FSA) provides loans to farmers through a number of programs. Direct Operating Microloans are designed to be more convenient and accessible than FSA’s traditional Direct Operating Loans (DOLs) for groups such as beginning farmers, women, and veterans. The number of new FSA direct loan borrowers—those who had not previously received an FSA direct loan, such as a traditional DOL or Microloan—increased substantially in 2009. During that time more farmers turned to FSA, as commercial sources of credit tightened during the Great Recession. Since then, the number of new FSA direct loan borrowers increased overall, though the number receiving traditional DOLs fell in 2013, when the Microloan program began. This suggests that the Microloan program may have attracted new borrowers that otherwise might have applied for traditional DOLs. At the time of receiving their first Microloan, 8,182 borrowers (71 percent) were new to FSA direct loans. Microloans are much smaller than traditional DOLs, with a maximum loan limit of $50,000 compared to $300,000. A version of this chart appears in the ERS report USDA Microloans for Farmers: Participation Patterns and Effects of Outreach, released December 2016.

After years of growth, U.S. farm real estate values have stalled since 2014

Friday, June 30, 2017

In recent years, farm real estate (including farmland and buildings) has accounted for about 80 percent of the value of U.S. farm assets—amounting to about $2.4 trillion in 2015. Strong farm earnings and historically low interest rates have supported the increase in farmland values since 2009. Since 2014, farm real estate values in many regions have leveled off; and, in 2016, the national average per-acre value declined slightly. This is partly a response to the recent declines in farm income, which may temper expectations of future farm earning potential. In addition, the 2016 USDA 10-year commodity outlooks suggest that the prices of major commodities will all stabilize at, or grow modestly from, their current price levels—which are significantly lower than those in 2011. Expectations of interest rate increases, which have been noted in some U.S. farm regions, also put downward pressure on land values. Given that farm real estate makes up such a significant portion of the balance sheet of U.S. farms, changes in its value can affect the financial well-being of individual farms and the farm sector. Over 60 percent of U.S. farmland was owner-operated in 2014; for these owners, increases in real estate values make it easier to obtain credit and service debt. For the farmers who rent the remaining 39 percent of farmland, higher real estate values can lead to higher rent expenses. This chart appears in the ERS topic page for Farmland Value, updated April 2017.

Managed honeybee colony numbers increased since 2006 even as colony mortality remained high

Friday, June 23, 2017

About one-third of the world’s food crops depend on pollinators, such as managed honeybees and more than 3,500 species of native bees. These pollinators face a variety of stressors that can impact their health, such as insect pests, pesticide exposure, and habitat changes. Honeybee mortality, as measured by the loss of a honeybee colony, has remained high over the last decade. In 2006-07, approximately 30 percent of honeybee colonies were lost during the over-winter period (October 1 through April 1). The over-winter loss rate has since diminished (22 percent in 2014-15), but over-summer losses have grown. The net result is that about 44 percent of colonies perished in 2015-16, compared with 36 percent in 2010-11. While recent public attention has focused largely on colony mortality trends, overall colony numbers have increased since 2006. This was accomplished with intensified beekeeper management, including splitting colonies, adding new queens, and offering supplemental feeding. This chart is based on the ERS report Land Use, Land Cover, and Pollinator Health: A Review and Trend Analysis, released June 2017.

Beef cattle operations received more than half of all Microloans between 2013 and 2015

Thursday, June 15, 2017

In January 2013, USDA’s Farm Service Agency (FSA) launched the Direct Farm Operating Microloan program to better serve the credit needs of small farms, beginning farmers, farmers from socially disadvantaged groups (women and minorities), and veterans. FSA issued over 13,800 Microloans as of mid-November 2015, which varied by the type of operation. The number of Microloans received by crop farmers remained fairly stable, while those received by livestock farmers increased each year—from about 2,300 in 2013 to nearly 4,000 in 2015. Crops include grain and oilseeds, vegetables, and fruits; livestock include beef cattle, dairy, and poultry. Beef cattle operations alone received more than half of all Microloans. Grain and oilseed farms, the next largest category, received about 15 percent. Beef cattle operations accounted for about a third of all operations in 2014, a much larger share than any other production category. They also tend to be relatively small, so small loans like Microloans (up to $50,000 each) might fulfill the financing needs of more beef cattle operations relative to other commodity specializations. This chart appears in the ERS report USDA Microloans for Farmers: Participation Patterns and Effects of Outreach, released December 2016.

Dairy farming offers profits, but also financial risks

Thursday, May 25, 2017

On average, larger dairy farms earn higher profits than smaller farms, spurring a steady shift of cows and production to larger operations. Between 2011 and 2015, farms with at least 1,000 milk cows earned the highest average rates of return on equity (ROE), a measure of profitability that captures the return to the capital that farmers have invested in the business. According to the 2012 Census of Agriculture (the latest data), these farms accounted for nearly half of all cows. By comparison, farms with less than 100 cows generally had negative average ROE between 2011 and 2015, but accounted for only 17 percent of all cows in 2012. Average ROE data can mask variation at the farm level: some farms are profitable and others are not. Low and negative ROE indicate that dairy farmers could earn more by investing their money elsewhere. Dairy farming carries financial risks for farms in all herd size classes. For example, ROE rose in 2014 as the prices that farmers receive for their milk rose to well over $20 per hundredweight of milk, but then fell sharply the following year as monthly milk prices declined by about 30 percent. This chart updates data from the ERS report Changing Structure, Financial Risks, and Government Policy for the U.S. Dairy Industry, released March 2016.

Gains in productivity have fueled the growth in U.S. agricultural output

Thursday, May 11, 2017

From 1948 to 2013, U.S. farm sector output grew by 170 percent with about the same level of farm input use over the period. This output growth resulted mainly from gains in productivity, as measured by total factor productivity (TFP)—the difference between the growth of aggregate output and growth of aggregate inputs (such as land and labor). Between 1948 and 2013, total output grew at an average annual rate of 1.52 percent, agricultural TFP at 1.47 percent, and input use at only 0.05 percent. Long-term agricultural productivity is fueled by innovations in animal/crop genetics, chemicals, equipment, and farm organization that result from public and private research and development. This chart appears in the ERS publication Selected charts from Ag and Food Statistics: Charting the Essentials, 2017, released April 28, 2017.

Larger family farms show stronger financial performance than smaller farms

Tuesday, May 9, 2017

Ongoing innovations in agriculture have enabled a single farmer, or farm family, to manage more acres or more animals. Farmers who take advantage of these innovations to expand their operations can reduce costs and raise profits because they can spread their investments over more acres. In 2015, larger family farms displayed stronger financial performance, on average, than smaller farms. For example, 74 percent of very large family farms—those with gross farm cash income (GCFI) of $5 million or more—had estimated operating profit margins (OPM) of at least 10 percent. This represents the safer yellow and green zones, with lower financial risk. By comparison, 54 percent of midsize family farms (GCFI of $350,000 to $999,999) also had an OPM of at least 10 percent. Most small farms (GCFI under $350,000) in the red zone (OPM under 10 percent), had a negative OPM, the result of losses from farming. Small farms account for 90 percent of U.S. farms, but only contribute about a quarter of the value of production. The majority of their operator households’ income comes from off-farm sources. This chart appears in the March 2017 Amber Waves data feature, "Large Family Farms Continue To Dominate U.S. Agricultural Production."

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