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Majority of farms with debt have loans from a commercial bank

Monday, July 8, 2024

Not all farms use debt to finance their operations, but of those that do, the majority used commercial banks. Researchers with USDA, Economic Research Service examined direct loans reported from five different sources in 2022: the Farm Credit System, USDA Farm Service Agency, commercial banks, trade credit, and other lenders. More than half of each farm type reported loans owed to a commercial bank. Among borrowers, small family farms using debt had the highest proportion receiving financing through other lenders (28 percent). Among all the lending sources, the Farm Service Agency serviced between 8 and 10 percent of farms with loans, making it the least likely to provide a direct loan. Not reflected, however, are actions by the Farm Service Agency to provide a loan guarantee for some of those operations reporting loans from commercial banks and the Farm Credit System. This chart appears in America’s Farms and Ranches at a Glance, published December 2023.

Cover crops planted by dairy producers are often harvested

Monday, June 17, 2024

More than half of dairy operations that plant cover crops reported harvesting all their cover crop acreage for forage or other on-farm use between 2018 and 2020. While not all dairy operations have cropland, many of those who plant cover crops use them to provide feed for their herd, such as by harvesting a cover crop like cereal rye or triticale for silage to later feed to dairy cattle. Cover crops can also be planted and left unharvested to improve water quality and soil health. From 2018 to 2020, the Agricultural Resource Management Survey asked producers how many acres of cover crops they harvested for forage or other on-farm use, and how many acres of cover crops went unharvested. Exclusively harvesting cover crops was relatively more common in the Fruitful Rim and Heartland regions, where 63 percent of dairy operations only harvested acreage of cover crops in each region. The Northern Crescent had a higher proportion of dairy operations that only reported unharvested cover crops (31 percent). Information on cover crop practices can be found in the USDA, Economic Research Service report Cover Crops on Livestock Operations: Potential for Expansion in the United States, published in May 2024.

Livestock operations with cover crops often use them for forage

Monday, June 3, 2024

Researchers with USDA, Economic Research Service (ERS) examined survey data to identify how producers who planted cover crops, such as rye or winter wheat, used them. Unharvested cover crops are often left in the field to provide residue cover or to add organic matter to the soil. Cover crops can also be used for livestock forage, such as when livestock graze in the spring or fall, or can be mechanically harvested in the spring and stored as haylage or silage. Researchers found that in 2021, 89 percent of cow-calf operations and 72 percent of dairy operations with cover crops reported using at least some of their cover crop acreage for forage, either through harvesting or grazing. The high proportions of livestock producers who used cover crops for forage suggests that their value as forage is an important factor in cover crop adoption for these operations, especially in cow-calf operations. Dairy operations were more likely to harvest cover crops than graze them. One of the reasons for this is because dairy cows often consume at least a portion of rations as harvested hay or silage in a barn or milking parlor. This contrasts with cow-calf operations, where cattle are more likely to graze on pasture than be fed in a barn. Dairy operations also commonly harvest and store corn silage, so they may be more likely to have the equipment and experience necessary to harvest and store cover crops as haylage or silage. Even among operations without livestock, harvesting cover crops for forage is relatively common, with 41 percent of operations without livestock reporting harvesting cover crops for forage. Information on cover crop practices in livestock operations can be found in the ERS report Cover Crops on Livestock Operations: Potential for Expansion in the United States, published in May 2024.

Crop insurance payments to farmers vary by farm type

Wednesday, April 24, 2024

About 13 percent of U.S. farms participated in Federal crop insurance programs in 2022, with the highest share of participants coming from small family farms. The four types of small family farms (retirement, off-farm occupation, low sales, and moderate sales) accounted for 54 percent of the participants in Federal crop insurance programs and received 12 percent of the insurance payments. Small family farms harvested 26 percent of all cropland acres. On the other hand, midsize and large-scale family farm operators accounted for a slightly lower proportion of Federal crop insurance participants (42 percent) but harvested a majority of the U.S. cropland acres (67 percent) and received 80 percent of payments from Federal crop insurance. Larger farms like these account for 46 percent of agricultural acres operated in 2022. Researchers with USDA, Economic Research Service examined survey data and found that participation rates varied widely across commodity production. In 2022, 62 percent of farms producing row crops (cotton, corn, soybeans, wheat, peanuts, rice, and sorghum) purchased Federal crop insurance, while 9 percent of farms growing specialty crops, such as fruits, vegetables, and nursery crops, did the same. This chart appears in America’s Farms and Ranches at a Glance, published December 2023.

Crop acreage managed under mix of owner operation and lease agreements

Thursday, April 18, 2024

The proportion of farmland managed under a lease agreement and land that is managed by owner-operators varies across crops, according to data collected from Agricultural Resource Management Surveys (ARMS). Owner-operators farmed close to half of U.S. corn, soybean, and barley acres but roughly a third of sorghum and cotton acres. While both cotton and sorghum acreage were roughly evenly split among owner-operated, cash-rent, and share-rent agreements, share-rented farmland had a lower proportion of corn, soybean, and barley acreage. Cash contracts are those in which the tenant pays a fixed rent and provides both inputs and management, and share-based contracts are those in which the landlord and tenant split costs and revenues. Other agreements, such as hybrid arrangements, make up less than 1 percent of crops based on planted acreage in the survey year. Researchers with USDA, Economic Research Service (ERS) examined information supplied by farmers from ARMS across various crops to find that the overall trend in the farmland market favors cash-rented farmland. More information on land leasing can be found in the ERS report Farmland Rental and Conservation Practice Adoption, published in March 2024.

A greater share of women-only operations are retirement farms

Tuesday, March 26, 2024

Most farms operated only by women are retirement, off-farm occupation, or low-sales farms, according to findings by researchers with USDA, Economic Research Service (ERS). After examining 2017–20 data from the Agricultural Resource Management Survey (ARMS), researchers found that a greater share of farms operated only by women were retirement farms compared with the shares operated only by men or by men and women jointly, 24 versus 11 and 9 percent, respectively. Retirement farms generate annual gross cash farm income (GCFI) of less than $350,000 with principal operators who report they are retired from farming. Three percent of men-only operations were large family farms (with GCFI of $1 million to $4,999,999), compared to 2 and 0.2 percent of farms operated jointly by men and women, or only women respectively. The ARMS data also show that 7 percent of all farms were operated entirely by women from 2017 to 2020, and 44 percent of all farms were operated jointly by men and women, so 51 percent of all farms had at least one woman operator. For more information, see the ERS report An Overview of Farms Operated by Socially Disadvantaged, Women, and Limited Resource Farmers and Ranchers in the United States, published February 2024.

2022 Census of Agriculture: Number of U.S. farms decreased 10 percent from 2012 to 2022

Friday, March 8, 2024

In 2022, farms in the United States numbered 1,900,487, down from 2,109,303 in 2012, according to data from the 2022 USDA Census of Agriculture released in February 2024. That represented a 10-percent (208,816 farms) decline from 2012 to 2022. The Census of Agriculture is a complete count of U.S. farms conducted every 5 years by USDA, National Agricultural Statistics Service. As such, it provides a picture of how different-sized farms, categorized by economic class, changed. In looking at the last two 5-year survey periods, the number of farms decreased in all four farm size categories from 2012 to 2017, represented by the red part of bars in the chart. From 2017 to 2022 (represented by gray part of bars), there was an overall decrease in the number of farms, with a drop in the smallest three economic class categories and an increase in the number of farms with annual revenue of $1 million or more. Farms with annual revenue of less than $10,000 dropped the largest in number within the decade, declining by 151,611 farms, or 13 percent. On the other hand, large farms of $1 million or more in revenue increased by 32 percent, that is, from 81,660 farms in 2012 to 107,952 farms in 2022. The number of farms with $10,000 to $249,999 in revenue declined by 66,666 (a 9-percent decrease) from 2012 to 2022, and farms with revenue of $250,000 to $999,999 declined by 16,831 (a 10-percent decrease). To explore the 2022 Census of Agriculture, see the NASS Census of Agriculture website. For more information on farm structure and its relationship with agriculture, as well as other statistics on the financial performance of farms and ranches, see USDA, Economic Research Service’s report America’s Farms and Ranches at a Glance: 2023 Edition, published in December 2023, which draws on data from the NASS Agricultural Resources Management Survey (ARMS) of farm operations in 2022.

2022 Census of Agriculture: Number of U.S. farms falls below 2 million

Wednesday, February 28, 2024

The number of farms in the United States has fallen below 2 million for the first time since before the Civil War, according to the recently released 2022 Census of Agriculture. In 2022, there were 1,900,487 farms in the country, a 7-percent decline from the level reported in the 2017 Census. A farm is defined as an establishment that produced and sold, or would have sold in normal conditions, at least $1,000 in agricultural production in a year. The Census of Agriculture, conducted every 5 years by USDA, National Agricultural Statistics Service (NASS), includes producer responses to questions about their farming operations. The latest Census also reported that the total U.S. land in farms declined 2.2 percent to 880 million acres in 2022. This decline, when combined with the higher proportional decline in the number of farms, meant that the average farm size increased by 5 percent to 463 acres per farm. For more details from the 2022 Census of Agriculture, see the NASS Census of Agriculture website. For more information on farm structure and its relationship with agriculture, as well as other statistics on the financial performance of farms and ranches, see USDA, Economic Research Service’s recent report America’s Farms and Ranches at a Glance: 2023 Edition, published in December 2023, which draws on data from the NASS Agricultural Resources Management Survey of farm operations in 2022.

Most small family farms are at high financial risk based on operating profit margin

Tuesday, January 23, 2024

Small family farms were more likely to have greater financial vulnerability than other farms, according to data from the 2022 Agricultural Resource Management Survey (ARMS). Researchers with USDA, Economic Research Service (ERS) calculated the operating profit margin (OPM), one of many financial risk measures, by taking the ratio of profit to gross farm income to find that in 2022, between 52 and 79 percent of small family farms—depending on the farm type (retirement, off-farm occupation, low sales, moderate sales)—were at the high-risk level. If OPM is less than 10 percent, the operation is considered at high financial risk. When OPM is between 10 and 25 percent, the operation is considered at medium financial risk, and if OPM is above 25 percent, the operation is at low financial risk. A majority of small-scale family farms, which have a gross cash farm income (GCFI) of up to $350,000, earn most of their income from off-farm sources. For these farms, farm profitability is not necessarily essential to the survival of the household. Small family farms make up 88 percent of all farms but account for only 19 percent of the total value of production. Large family farms (GCFI of $1 million to $5 million) in 2022 were most likely to have low financial risk at 51 percent and least likely to be at high financial risk at 27 percent. Midsize farms (GCFI of $350,000 to $999,999) were also most likely to be in the low-risk zone at 39 percent and least likely to be in the medium-risk zone at 23 percent. This chart appears in the ERS report America’s Farms and Ranches at a Glance, published December 2023.

Smaller cow-calf operations still outnumber large operations, but herd sizes have increased

Thursday, August 17, 2023

In the United States, most cow-calf operations are relatively small and have fewer than 50 cows though a few very large operations (with more than 1,000 cows) can be found. On cow-calf farms, calves are birthed, raised, and weaned on site. While some calves remain on the farm until they reach slaughter weight, most are either moved directly to feedlots after weaning or retained on-farm for additional weight gain before being sold to feedlots. Unlike many other animal production operations, cow-calf farms generally do not require a major upfront investment in capital assets specific to cow-calf production, such as housing. The combination of relatively lower cow-calf specific startup costs and pasture as a primary source of feed has resulted in a variety of operation sizes on a range of land types for both full- and part-time farmers. Data from USDA, National Agricultural Statistics Service, Census of Agriculture indicate that between 1997 and 2017, most cow-calf operations remained small. In 2017, 54 percent of farms with beef cows had fewer than 20 cows, slightly down from 1997. However, across the two decades, the overall number of cow-calf operations in the United States decreased by 19 percent, while the average herd size of operations grew. These changes in farm number and herd size, while notable, have not been as significant as industry shifts in hog and dairy production. This chart is drawn from the USDA, Economic Research Service report Structure, Management Practices, and Production Costs of U.S. Beef Cow-Calf Farms, published in July 2023.

Socially disadvantaged farm operations concentrated in South and West

Tuesday, May 16, 2023

Socially disadvantaged farmers and ranchers tend to be more concentrated in southern and western regions of the country than in other areas of the United States. USDA defines socially disadvantaged farmers and ranchers as those belonging to groups that have been subject to racial or ethnic prejudice. They include non-white and Hispanic farmers. In some counties, the proportion of operations classified as racially or ethnically socially disadvantaged is more than 58 percent, such as in parts of Arizona, New Mexico, Texas, and Florida. Overall, socially disadvantaged farms accounted for 9.4 percent of the 2 million farms in the United States, according to the 2017 Census of Agriculture. In 2017, 1.3 percent of all producers identified themselves as Black or African American only, 1.7 percent identified as American Indian or Alaska Native only, 0.6 percent identified as Asian only, 0.1 percent as Native Hawaiian or other Pacific Islander only, and 0.8 percent of all producers reported more than one race. In addition, 3.3 percent of all producers of any race indicated Hispanic, Latino, or Spanish origin. This chart appears in the USDA, Economic Research Service report Access to Farmland by Beginning and Socially Disadvantaged Farmers: Issues and Opportunities, published in December 2022.

Number of U.S. farms continues to decline, but farm size grows slightly

Tuesday, April 25, 2023

After peaking at 6.8 million farms in 1935, the number of U.S. farms and ranches fell sharply through the early 1970s. Rapidly falling farm numbers in the mid-20th century reflect the growing productivity of agriculture, increased mechanization, and increased nonfarm employment opportunities. Since 1982, the number of U.S. farms has continued to decline, but much more slowly. In 2022, there were 2.0 million U.S. farms, down from 2.2 million in 2007. Similarly, the acres of land in farms continue a downward trend with 893 million acres in 2022, down from 915 million acres 10 years earlier. The average farm size in 2022 was 446 acres, only slightly greater than the 440 acres recorded in the early 1970s. This chart appears in the ERS data product Ag and Food Statistics: Charting the Essentials, updated March 2023.

Beginning farm operations tend to be in the South and West

Monday, April 10, 2023

Beginning farms tend to be more concentrated in Southern and Western States than in other areas of the United States. In some counties in California and Texas, for instance, the proportion of beginning farms is more than one-third of the total farms. As of 2017, there were about 340,000 farms—with almost 900,000 operators—on which all operators were beginning farmers with 10 or fewer years of farm management experience. Most beginning farms are small-scale operations; about 67 percent of beginning farms produced less than $10,000 worth of output. Less than 2 percent of beginning farms achieve an annual production value of more than $1 million. New beginning farms and ranches accounted for 17 percent of the 2 million farms in the United States and 8 percent of the total agricultural production. Among farms with at least $10,000 in production value or sales, principal operators—the people most responsible for making day-to-day decisions—of beginning farms were 43 years old on average. In contrast, the age of operators of established farms averaged 63 years old. USDA offers numerous resources for beginning farmers. This chart appears in the Economic Research Service bulletin Access to Farmland by Beginning and Socially Disadvantaged Farmers: Issues and Opportunities, published in December 2022.

Eighty-nine percent of all farms are small family farms and they generated 18 percent of total production value in 2021

Monday, February 27, 2023

In 2021, about 89 percent of all farms were small family farms. Small family farms operated 45 percent of U.S. agricultural land and produced 18 percent of the total value of production. Farm size classifications are based on annual gross cash farm income, a measure of a farm's revenue—including sales of crops and livestock, payments made under Federal agricultural programs, and other farm-related cash income—before deducting expenses. Small family farms have gross cash farm income (GCFI) below $350,000. In comparison, large-scale family farms, with GCFI above $1 million, operated 27 percent of agricultural land and were responsible for 46 percent of the total value of production in 2021. Midsize family farms, with GCFI between $350,000 and $1 million, operated 18 percent of agricultural land and similarly generated 18 percent of the total value of production. Overall, family farms of all sizes comprised about 83 percent of the overall production value while making up 98 percent of all farms. The remaining 2 percent of farms were classified as nonfamily. This category includes partnerships (of unrelated partners), nonfamily corporations, and farms with a hired manager unrelated to the owners. Despite accounting for such a small percent of farms, the nonfamily category was responsible for 17 percent of the total value of production. This chart appears in the ERS report America’s Farms and Ranches at a Glance, 2022 edition.

Number of U.S. hog operations declined between 1997 and 2017, while farm size and contract production increased

Friday, December 9, 2022

The structure of the U.S. hog sector changed between 1997 and 2017, shifting hog production to fewer, but larger, farms. According to data from the Census of Agriculture, which is administered by the USDA, National Agricultural Statistics Service, the number of hog operations with inventory declined 37 percent between 1997 and 2002 and continued to drop through 2012. Despite ticking upward in 2017, the number of operations with inventory ended at roughly 66,000 operations, 47 percent less than in 1997. In contrast, the average farm size roughly doubled over those two decades, as measured by the number of head of hogs in inventory per farm. The share of the U.S. hog inventory on farms with 5,000 or more head rose from 40 percent in 1997 to 73 percent in 2017. Overall, the U.S. hog inventory increased by 18 percent over the period, and the average hog farm size rose to more than 1,000 head of hogs. Reductions in the number of hog operations and increases in hog farm size have occurred alongside increases in production contract use. For example, by 2017, the percentage of hogs sold under a production contract rose to more than 50 percent in Iowa and Minnesota (combined) and in North Carolina, three hog-producing States that together contributed to more than half the hogs sold in the United States. From 2012 to 2017, contract production rose from 51 to 59 percent in Iowa and Minnesota and from 83 to 91 percent in North Carolina. This chart appears in the USDA, Economic Research Service report U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth, published in August 2022.

U.S. hog sector increased specialization, production contract use, and farm size from 1992 to 2015

Wednesday, October 5, 2022

The U.S. hog industry has experienced structural change, productivity growth, and increased output since the early 1990s. The average U.S. hog farm has become larger, more specialized, and focused on contract production. Hog and pig producers sold more than nine times the volume of hogs per farm in 2015 than in 1992, ending at 8,721 head of hogs per farm in 2015. Over the same period, feeder-to-finish operations—those specializing in raising feeder pigs from 30-80 pounds to market weights of 225-300 pounds—became the majority, growing from 19 to 60 percent of all hog operations. Hog operations also became increasingly likely to use production contracts. A sharp increase in contract production occurred from 1992 to 2004, but contract production leveled off near 70 percent between 2004 and 2015. By 2015, the majority of hogs and pigs were being produced on specialized operations (89 percent) and under contract production (69 percent). From 1992 to 2015, production contract use increased from 3 to 53 percent of operations, with roughly 71 percent of feeder-to-finish operations engaged in contract production by 2015. These agreements were attractive because contractors typically provided the hogs and feed, made many management decisions, transported animals to market, and decided where and when hogs were to be sold. This chart appears in the USDA, Economic Research Service’s report U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth, published August 2022.

Contract broiler growers have higher median but a greater range of household income compared to all U.S. farms and households

Wednesday, September 14, 2022

Farm households that raise broilers under contract have higher median incomes than U.S. farms and households overall. In 2020, the median income among all U.S. households was $67,251, while the median income among farm households was $80,060. The median for contract broiler growers was higher, at $106,694. These figures include on- and off-farm income. However, median income does not tell the whole story. The range of household incomes earned by contract broiler growers is wider than other groups. The bottom 20 percent of contract broiler growers earns $170,871 less than those in the top 20 percent, compared to $123,094 for all farm households, and $114,084 for all U.S. households. The wider range reflects, in part, the financial risks associated with contract broiler production. Grower compensation per bird can vary widely based on the productivity of the farm and the type of compensation system found in most broiler grower contracts. Sometimes called tournament-based systems, fees paid to the grower are based on the grower’s performance compared to other growers who provide birds to processing plants at the same time. This chart updates information found in the August 2014 Amber Waves feature “Financial Risks and Incomes in Contract Broiler Production.

Fees paid to growers for raising broiler chickens varied widely in 2020

Thursday, September 8, 2022

Almost all broiler chickens (99.5 percent in terms of the value of production in 2020) are raised under a production contract in which a farmer is paid a fee to raise animals owned by the contractor. In the broiler industry, growers are paid relative to other growers in what is often called a “tournament” pay system. Under tournament systems, broiler companies who manage each stage of the supply chain (also known as “integrators”) contract with farmers who grow birds to be delivered to a processing plant. Integrators provide chicks to multiple growers at the same time, for delivery to a processor in the same week. The growers provide housing, equipment, utilities, and labor. Integrators provide chicks, feed, transportation, veterinary services, and technical guidance. Once a flock of broilers is ready for processing, the integrator weighs the flock and tallies the cost of the inputs to determine the flock’s performance compared to other growers in the same tournament. Growers whose costs are lower than the average for all growers receive a premium over the contract’s base fee; those whose costs exceed the average for all growers receive a deduction from the base. The amount of the premium or deduction reflects the size of the cost difference. In 2020, the median payment to growers was 6.79 cents per live-weight pound delivered. But actual fees varied widely, from 4.29 cents paid to the bottom 10 percent of growers to 9.64 paid to growers to the top 10 percent. This chart uses data from the 2020 Agricultural Resource Management Survey to update the chart that appeared in the 2014 Amber Waves article “Financial Risks and Incomes in Contract Broiler Production.”

Number of U.S. farms continues slow decline as farm size slowly rises; overall land used remains constant

Tuesday, June 21, 2022

After peaking at 6.8 million farms in 1935, the number of U.S. farms and ranches fell sharply through the early 1970s. Rapidly falling farm numbers in the mid-20th century reflect the growing productivity of agriculture and increased nonfarm employment opportunities. Since then, the number of U.S. farms has continued to decline, but much more slowly. In 2021, there were 2.01 million U.S. farms, down from 2.20 million in 2007. With 895 million acres of farmland nationwide in 2021, the average farm size was 445 acres, only slightly greater than the 440 acres recorded in the early 1970s. This chart appears in the ERS data product Ag and Food Statistics: Charting the Essentials, updated June 2022.

Contracts are common in animal and crop production

Friday, April 29, 2022

In 2020, agricultural contracts governed the production of about 33 percent, by value, of all U.S. farm commodities. A contract is a legal agreement between a farmer and another person or firm to produce a specific type, quantity, and quality of crops or livestock. Farmers use contracts, with set pricing (or a pricing formula) or fees, instead of traditional cash sales to manage income risks. USDA, Economic Research Service identifies two types of agricultural contracts: marketing and production. Under marketing contracts, the ownership of commodities stays with the farmer during production. The contracts set a price or a pricing formula, product quantities and qualities, and a delivery schedule. Under production contracts, the contractor generally owns the commodity and provides inputs, services, production guidelines, and technical advice to the farmer. Relative to overall commodity production, marketing contracts and production contracts are equally used. However, crop farmers are more likely to use marketing contracts and livestock producers typically use production contracts. Marketing contracts represented 23 percent of all crop production in 2020. More than half the value of production of sugar beets, peanuts, and fruits was produced under marketing contracts in 2020, and less than 20 percent of soybeans, corn, and wheat production fell under marketing contracts. Production contracts represented 36 percent of all livestock production, including 76 percent of poultry and egg production, and 74 percent of hog production. Although marketing contracts are mostly used for crop production, a small percentage of poultry and eggs was produced using marketing contracts. Likewise, a small percentage of vegetable production occurred under production contracts even though most production contracts cover livestock. This chart was drawn from the Farm Structure and Contracting topic page, updated March 2022.