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Commercial farms received the highest average Government payments in 2021

Monday, June 26, 2023

In 2021, more than 34 percent of the 1.96 million U.S. family farms received Government payments through four types of programs: countercyclical, marketing loan, conservation, and other programs. These Government payments totaled $14.3 billion based on data from USDA’s Agricultural Resource Management Survey (ARMS). Economists with USDA’s Economic Research Service examined three groupings (commercial, intermediate, residence) of family farms to find that about 75 percent of commercial family farms—those with $350,000 or more in gross cash farm income (GCFI)—received Government payments. For intermediate family farms—those with less than $350,000 in GCFI and a principal operator whose primary occupation is farming—31 percent received Government payments. Finally, Government payments went to 29 percent of residence family farms, defined as those with less than $350,000 in GCFI and where the principal operator is retired from farming or has a primary occupation other than farming. Overall, on average, commercial farms received $66,314, intermediate farms received $12,794, and residence farms received $8,354 in Government payments in 2021. This chart is drawn from data in the USDA, Economic Research Service’s ARMS Farm Financial and Crop Production Practices data product and in the May 2023 Amber Waves article Commercial Farms Led in Government Payments in 2021. For more information on Federal programs, visit the Farm & Commodity Policy topic page.

Family farm households received an estimated $2,167 on average from Economic Impact Payments in 2020

Wednesday, November 10, 2021

In 2020, U.S. family farm households received $4.3 billion in Federal assistance during the Coronavirus (COVID-19) pandemic from Economic Impact Payments (EIP) (also known as stimulus payments). USDA, Economic Research Service (ERS) researchers used data from the most recent available 2019 Agricultural Resource Management Survey on farm households’ adjusted gross income and household composition to estimate the average EIP disbursed. The estimated average was $924, $2,408, and $2,466 for single, head of household, and joint filers, respectively. This disparity partly reflects the lower income thresholds for single households, which resulted in some not receiving the maximum EIP and others not receiving EIP at all. Additionally, since unmarried people with dependents were assumed to file as head of household, these households were estimated to have received an additional $500 per dependent. Among family farm households, ERS researchers estimated that 18 percent of single filers did not receive EIP, compared with 17 percent of head of household filers, and 13 percent of joint filers in 2020. In April and May 2020, U.S. households of all types—farm or otherwise—received more than $266 billion from the EIP program. This chart appears in the Amber Waves feature “U.S. Agriculture Sector Received an Estimated $35 Billion in COVID-19 Related Assistance in 2020,” released September 2021.

In 2020, crops sector received 65 percent of Paycheck Protection Program loans for agriculture

Wednesday, October 27, 2021

Errata: On November 9, 2021, the chart and text were revised to clarify that the Paycheck Protection Program eligibility simulation was carried out on both commercial and intermediate farm operations. No other data or findings are changed.

As part of its response to the Coronavirus (COVID-19) pandemic, the U.S. Federal Government implemented the Paycheck Protection Program (PPP). Agricultural producers could use forgivable loans from this program to help keep employees on payroll and offset some of their operating costs. The maximum PPP loan amount was 2.5 times the monthly average profit plus payroll and eligible overhead expenses, such as the employer’s share of insurance payments and unemployment taxes. If used on eligible expenses within the first 24 weeks of disbursement, PPP loans were fully forgiven. According to data from USDA’s 2019 Agricultural Resource Management Survey (ARMS), 72 percent of all farm businesses (operations with gross cash farm income of more than $350,000 or smaller operations where farming is reported as the operator's primary occupation) had either positive net income or positive payroll, which met the two most important eligibility requirements to apply for PPP loans. Individual Small Business Administration (SBA) loan data indicated that almost 121,000 farm operations applied for a total of $6.0 billion in PPP loans in 2020. That accounted for 17 percent of presumed-eligible farm businesses based on the 2019 ARMS. Out of the total PPP loans that was disbursed to farm operations in 2020, $3.9 billion (65 percent) went to crop operations, and the remaining $2.1 billion (35 percent) went to livestock operations. This chart appears in the Amber Waves finding “U.S. Producers Received Almost $6.0 Billion From the Paycheck Protection Program in 2020,” released October 2021.

Family farm households received an estimated $5.6 billion in assistance from Economic Impact Payments and Federal Pandemic Unemployment Compensation in 2020

Friday, August 6, 2021

Family farms are any farm organized as a sole proprietorship, partnership, or family corporation—and accounted for 98 percent of all U.S. farms in 2019. Family farm households received Coronavirus (COVID-19) related financial assistance from multiple Federal sources, including Economic Impact Payments (EIP) and Federal Pandemic Unemployment Compensation (FPUC). These payments provided farm households with an immediate injection of cash to spur demand and mitigate the economic downturn. The full EIP amounted to $1,200 for individuals or $2,400 for couples filing jointly, with an additional $500 per dependent. To qualify for a full stimulus payment, joint filers, heads of household, and all other tax-filing individuals must have had an adjusted gross income (AGI) of less than $150,000, $112,500, and $75,000, respectively, based on their 2018 or 2019 taxes. According to data from USDA’s 2019 Agricultural Resource Management Survey (ARMS), the median married and unmarried household may have received an increase in one month’s total household income of 30 percent and 24 percent, respectively, as a result of EIP. Researchers from USDA, Economic Research Service (ERS) also estimated that family farm households received a total of $4.3 billion from EIP, with 84 percent going to married households. FPUC provided $600 per week (March 29, 2020 to July 25, 2020) to those who were unemployed during the COVID-19 pandemic (in addition to existing State unemployment benefits). Many farm households rely on off-farm employment, with 71 percent having one or more household members who earned an off-farm salary or wages in 2019. ERS researchers used county-level unemployment data from the U.S. Bureau of Labor Statistics to estimate the average FPUC payment at $996 per household and the total for all farm households at $1.3 billion. In total, EIP and FPUC provided $5.6 billion in assistance to farm households in 2020. Family farm households also received COVID-19 related assistance from other Federal sources—including the Coronavirus Food Assistance Program (CFAP, $23.7 billion) and the Paycheck Protection Program (PPP, $5.9 billion). This chart is based on data from the ERS data product ARMS Farm Financial and Crop Production Practices, updated May 2021.

Commercial farms received the highest average Government payments in 2019

Wednesday, July 21, 2021

Errata: On July 28, 2021, the chart was revised to correct an error in presentation. No other data or text were affected.

Government payments to farm operator households totaled $14.8 billion in 2019, based on data from USDA’s Agricultural Resource Management Survey. More than 30 percent of about 1.97 million U.S. farms received some Government payments that year, with an average payment of $24,623. The distribution of payments varied by farm type, which USDA’s Economic Research Service defines based on gross cash farm income (GCFI) and operator type. About 74 percent of commercial farms (those with $350,000 or more in annual GCFI) received Government payments in 2019, with an average payment of $84,775. By comparison, about 31 percent of intermediate farms (less than $350,000 in annual GCFI and a principal operator whose primary occupation is farming) received Government payments, with an average payment of $11,731. About 24 percent of all residence farms (less than $350,000 in annual GCFI and a principal operator who is retired from farming or has a primary occupation other than farming) received Government payments, with an average payment of $8,147. The distribution of payments also varied by the type of Government program. Across programs, average payments were always highest for commercial farms and typically lowest for residence farms, with intermediate farms in the middle. For example, average countercyclical payments in 2019 were $28,093 for commercial farms, compared with $5,800 and $2,660 for intermediate and residence farms, respectively. The only exception was in conservation payments, where intermediate farms had the lowest average payments. This chart appears in the July 2021 Amber Waves finding, Commercial Farms Received the Most Government Payments in 2019. For more information on the Federal programs discussed above, visit the topic page for Farm & Commodity Policy.

Economic recovery, competition shape projections of U.S. farm prices to 2030

Monday, November 9, 2020

USDA projections for changes in nominal (not adjusted for inflation) U.S. farm prices between 2020 and 2030 indicate a mixed outlook shaped by the expected recovery in U.S. and global demand, continued export competition, and market conditions during 2020. For crops, the strongest gains are projected for wheat and cotton. Wheat prices are projected to rise as domestic and export demand begin to outpace domestic production, while higher cotton prices are driven by a projected recovery in export demand. Modest changes in prices for U.S. corn and soybeans from current levels reflect the relatively steady demand for these products during 2020, together with the moderating influences of productivity gains and continued export competition. Among livestock products, farm prices of hogs, broilers, and eggs are projected higher by 2030, as economic recovery restores growth in domestic and export demand. U.S. beef cattle prices are expected to rise during the early years of the 10-year projection period, before declining somewhat as the multi-year cattle cycle and a longer-term trend of sluggish demand growth turn prices downward. The projections are based on an assumed long-term macroeconomic outlook that includes a recovery in income growth—beginning in 2021—from the declines that have occurred in most economies during 2020. The outlook for the U.S. economy, and for many important U.S. agricultural markets and competitors, however, remains uncertain. This chart is based on projections prepared by the USDA Interagency Projections Committee using data available as of October 9, 2020, and released by the Office of the Chief Economist on November 6, 2020. Updates are shown in the Economic Research Service Agricultural Baseline Database.

Conservation spending remained roughly level in recent years, a trend projected to continue through 2023

Monday, October 5, 2020

USDA’s voluntary conservation programs form the backbone of U.S. agricultural conservation policy. These programs include the Conservation Reserve Program, Agricultural Conservation Easement Program, Environmental Quality Incentives Program, Conservation Stewardship Program, Regional Conservation Partnership Program, and Conservation Technical Assistance. The programs help agricultural producers improve their environmental performance related to soil health, water quality, air quality, wildlife habitat, and greenhouse gas emissions. Between 1996 and 2011, real (inflation-adjusted) conservation spending grew by roughly 50 percent, largely due to expansion of the major working lands programs. Since 2011, annual spending has remained between $6.0 and $6.5 billion (except in 2015) and is projected to remain within that range between 2019 and 2023. Under the Agriculture Improvement Act of 2018 (also known as the 2018 Farm Act), the Congressional Budget Office (CBO) estimates mandatory conservation spending of $29.5 billion over 5 years. This is about $560 million more than CBO’s projection of 2019-23 spending with the extension of the programs and provisions of the 2014 Farm Act. Although most conservation programs receive “mandatory” funding, the funding levels are not guaranteed and could be revised in future years. This chart appears in the ERS topic page for Conservation Programs, updated September 2019.

USDA commodity-income support levels have increasingly varied since 2015

Monday, August 19, 2019

In the years leading up to 2015, USDA commodity-income support was predominantly from direct, unconditional payments, which paid farmers roughly the same amount each year. Although other conditional payment programs existed at the time, the rise in commodity market prices reduced the total amount of conditional payments paid by the U.S. Government. With mostly unconditional payment programs providing income support, payments remained reasonably constant across the years leading up to the 2014 farm bill. Under these unconditional programs, corn base acres received the largest amount of income support (larger than soybeans and wheat), in part because corn covered the largest number of acres. The 2014 farm bill created two new conditional programs called Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). Under these programs, farmers receive commodity-crop income support only if revenues or prices fall below predetermined thresholds. The creation of ARC and PLC, in combination with a decline in prices from 2012 peaks, has increased the variability of payments in recent years. For example, in 2016, the combined expenses across these three crops and two programs was $6.6 billion. Just 2 years later in 2018, this number decreased by $4.7 billion to $1.8 billion. This chart appears in the August ERS Amber Waves article, “Changes in Commodity-Income Support Programs and Commodity Prices have Caused Increased Variability in Support Payments.”

Food safety actions by the produce industry and commercial buyers have moved food safety practices forward

Thursday, April 4, 2019

Errata: On April 4, 2019, the final sentence in the text of the Chart of Note “Food safety actions by the produce industry and commercial buyers have moved food safety practices forward” was corrected so that the date of its related ERS report was properly stated as April 2019.

The produce industry and commercial buyers (retailers, foodservice buyers, and produce processors) have been instrumental in pushing food safety practices forward. Retailers strive to ensure food safety while not having direct control over production practices. Many retail companies have turned to indirect means, using third-party audits, to make certain that the produce they buy is grown following certain food safety practices. In 1999, Safeway became the first U.S. grocery chain to require audits from its suppliers of “high risk” fresh produce. Many other retailers followed. Marketing orders—standards initiated by producers—began to emerge later as a means for specific commodity groups to provide assurance of safe practices to industry buyers and consumers. The California leafy greens industry in 2007 initiated the Leafy Greens Marketing Agreement (LGMA)—a voluntary program that requires participants to implement mandatory food safety practices, which include third-party audits—and many others followed. Retailer food safety requirements have shaped the current food safety landscape and will determine the extent to which the Food Safety Modernization Act’s recently implemented “Produce Rule” affects growers. This information grew out of ERS research, including the 2007 Amber Waves article, “Outbreak Linked to Spinach Forces Reassessment of Food Safety Practices.” This chart appears in the ERS report, “Food Safety Requirements for Produce Growers: Retailer Demands and the Food Safety Modernization Act,” released in April 2019.

Pasture, rangeland, and forage-area crops have driven the growth in insured acres since 2007

Tuesday, February 19, 2019

The 2018 Farm Act continues to emphasize support for farm risk management and to expand coverage within the Federal Crop Insurance Program (FCIP) that was established in the 2014 Farm Act. Since 2007, the largest growth in insured acres has come from the introduction of coverage for pasture, rangeland, and forage areas. The 2018 Farm Act introduces a catastrophic coverage option for these policies, which is likely to further increase the total acres insured for pasture, rangeland, and forage areas. Premiums for catastrophic coverage policies are fully subsidized (farmers pay no premium, only an administrative fee), while higher levels of coverage are only partially subsidized (farmers pay part of the premium). The availability of cheaper policies may induce additional participation in FCIP. However, the county base values that are used to assess the economic value of insured production covered by pasture, rangeland, and forage policies will be lower in the 2019 crop year than in previous years. In turn, this decrease lowers the value of insured hay and forage production and may reduce the demand for pasture, rangeland, and forage area policies. This chart appears in the ERS crop insurance topic page of The Agriculture Improvement Act of 2018: Highlights and Implications, published February 2019.

2018 Farm Act maintains conservation spending

Tuesday, February 12, 2019

Voluntary conservation incentive programs are the backbone of U.S. agricultural conservation policy. For fiscal years 2019 to 2023, the Congressional Budget Office (CBO) projects mandatory spending on conservation programs under the 2018 Farm Act would be $555 million higher than baseline (projected) spending if the previous 2014 Farm Act had remained in force. That represents an increase of about 2 percent. Nearly all of this spending will flow through five programs: the Conservation Reserve Program, Conservation Stewardship Program, Environmental Quality Incentives Program, Agricultural Conservation Easement Program, and Regional Conservation Partnership Program. For these programs and their predecessors, inflation-adjusted spending increased under both the 2002 and 2008 Farm Acts (2002-2013) but was lower under the 2014 Farm Act (2014-2018). CBO projections suggest that the 2018 Farm Act will provide slightly higher funding, on average, than the 2014 Farm Act. Although program funding is mandatory and does not require appropriations, spending in future years is subject to congressional review and has sometimes been reduced from levels specified in the Farm Acts. This chart appears in the ERS topic page The Agriculture Improvement Act of 2018: Highlights and Implications, updated February 2019.

California farmers shifted to groundwater when drought reduced surface water availability

Tuesday, January 2, 2018

Prolonged drought generally results in large reductions in the quantity of surface water delivered, affecting farm production systems that depend heavily on surface water for irrigation. Groundwater may substitute as a source for irrigation water when the availability of surface water declines. For example, although most farmers in California’s main agricultural areas rely on surface water for the largest share of their irrigation needs, many parts of the State have sufficient groundwater reserves to provide a partial buffer against the impacts of drought. However, recurring drought and groundwater “overdraft”—when the amount of water extracted is greater than the amount of water entering the aquifer—have resulted in large declines in aquifer levels in some areas. This chart appears in the June 2017 Amber Waves feature, "Farmers Employ Strategies To Reduce Risk of Drought Damages."

Payments from Government farm programs have shifted to higher-income farm households to varying degrees, but with declines in some since 2013

Friday, December 1, 2017

USDA’s commodity, Federal crop insurance, and conservation programs provided about $16.9 billion in financial assistance to farm producers and landowners in 2015. Over time, as agricultural production shifted to larger farms, these programs’ payments shifted to higher-income households—which often operate larger farms. In 1991, half of commodity program payments went to farms operated by households with incomes over $60,717 (adjusted for inflation). By 2015, this midpoint value, at which half of payments went to households with higher incomes, was $146,126. Similar trends hold for other programs, though with variability across programs and over time. For example, the midpoint income level for crop insurance indemnity payments increased from 2010 to 2013, but by 2015 had dropped below the 2008 level, to $143,806. For context, the median U.S. household income shows little change over the period and in 2015 was $56,516. Payments from commodity programs reduce financial risks to specific commodity producers, while payments from federally subsidized crop insurance mitigate yield and revenue risks. Payments from conservation programs aim to conserve natural resources and reduce environmental impacts from farming. This chart appears in the ERS report The Evolving Distribution of Payments from Commodity, Conservation, and Federal Crop Insurance Programs, released November 2017.

Drought is typically the largest single driver of crop disaster assistance and indemnity payments

Tuesday, October 17, 2017

At any given time, some portion of the country faces drought conditions. In recent years, large areas of the United States have experienced prolonged drought, with significant impacts across entire agricultural sectors. A major drought can reduce crop yields, lead farmers to cut back planted or harvested acreage, reduce livestock productivity, and increase costs of production inputs such as animal feed or irrigation water. Since the Dust Bowl in the 1930s, drought has been an important focus of U.S. farm policy. Early Federal policy mitigated farmers’ drought-induced hardships primarily by providing ad hoc disaster assistance in response to a drought. With changes to the Federal crop insurance program in the 1990s, the emphasis of farm programs shifted from ad hoc disaster assistance to risk management, with a greater reliance on crop insurance to compensate farmers for drought losses. As a result, drought has been the largest individual driver of Federal indemnity payments and disaster assistance for over four decades. This chart appears in the June 2017 Amber Waves feature, "Farmers Employ Strategies To Reduce Risk of Drought Damages."

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.

Agriculture contributed $992 billion to the U.S. economy in 2015

Thursday, April 6, 2017

Agriculture and agriculture-related industries contributed $992 billion to the U.S. gross domestic product (GDP) in 2015, a 5.5-percent share. The output of America’s farms contributed $136.7 billion of this sum—about 1 percent of GDP. The overall contribution of the agriculture sector to GDP is larger than this because related sectors rely on agricultural inputs like food and materials used in textile production in order to contribute added value to the economy. In 2015, farming’s contribution to GDP fell for the second consecutive year after reaching a high point of $189.9 billion in 2013. A major reason for this downward trend has been falling commodity prices like corn and soy, which peaked around 2013 and have since fallen by at least 30 percent. The category of food service, eating and drinking places has expanded over a similar timeframe and may be a beneficiary of the lower commodity prices at the farm level. This chart was updated in March 2017 and appears in the ERS data product, Ag and Food Statistics: Charting the Essentials.

ACRE payments for corn are concentrated in the Midwest

Monday, October 10, 2016

USDA's Average Crop Revenue Election Program (ACRE) is an alternative to price-based commodity programs. Begun in 2009, the program uses a combination of State- and farm-level revenue guarantees that are determined from recent historic prices and yields. The ACRE program makes payments to producers when both State average revenue and farm revenue for a crop fall below recent historic levels. The map shows expected ACRE payments, based on simulated crop revenue variability, per acre for representative farms (one per crop per county) relative to national average ACRE payments. For corn, ACRE payments would be high in Midwest areas with high average yields, even though these areas have low yield and revenue variability and strong negative price-yield correlations. ACRE payments also tend to be high along the Southeast and Middle Atlantic coast where average yields are low and yield and revenue variability are high. This map originally appeared in the December 2010 issue of Amber Waves.

Some conservation practices are more widely adopted than others

Wednesday, September 21, 2016

The environmental effects of agricultural production, e.g., soil erosion and the loss of sediment, nutrients, and pesticides to water, can be mitigated using conservation practices. Some practices are more widely adopted than other practices; no conservation practice has been universally adopted by U.S. farmers. Variation in conservation practice adoption is due, at least in part, to variation in soil, climate, topography, crop/livestock mix, producer management skills, and financial risk aversion. These factors affect the onfarm cost and benefit of practice adoption. Presumably, farmers will adopt conservation practices only when the benefits exceed cost. Government programs can increase adoption rates by helping defray costs. The potential environmental gain also varies—ecosystem service benefits (such as improved water quality and enhanced wildlife habitat) depend both on the practice and on the location and physical characteristics of the land. This chart is based on data from ARMS Farm Financial and Crop Production Practices.

Use of crop insurance on U.S. farms continues to grow

Thursday, August 11, 2016

The share of U.S. cropland insured has increased from less than 30 percent in the early 1990s to nearly 90 percent—299 million acres—in 2015. Passage of the Federal Crop Insurance Reform Act in 1994 led to a spike in the use of crop insurance, reflecting the introduction of low-coverage, fully subsidized Catastrophic Risk Protection Endorsement (CAT) insurance and a temporary requirement that producers obtain insurance coverage to be eligible for other commodity support programs. CAT insurance pays only 55 percent of the price of the commodity on crop losses in excess of 50 percent, and farmers have increasingly opted to purchase insurance with higher coverage levels—known as “buy-up” insurance—for greater protection against risk. Premiums for buy-up policies are also subsidized, and these subsidies were increased in the 1994 Act as well as under the Agricultural Risk Protection Act of 2000. While buy-up policies are not fully subsidized like CAT insurance—in 2015 producers paid, on average, 38 percent of the total cost of buy-up policies—they in some cases can protect more than 75 percent of the value of a crop. By 2015, buy-up policies covered 95 percent of insured cropland. This chart is from the ERS report, How Do Time and Money Affect Agricultural Insurance Uptake? A New Approach to Farm Risk Management Analysis, released on August 1, 2016.

While total acreage in the Conservation Reserve Program (CRP) continues to decline, land in "continuous signup" steadily increases

Thursday, June 25, 2015

The Agricultural Act of 2014 gradually reduces the cap on land enrolled in the Conservation Reserve Program (CRP) from 32 million acres to 24 million acres by 2017. CRP acreage declined 34 percent since 2007, falling from 36.8 million acres to 24.2 million by April 2015. Environmental benefits may not be diminishing as quickly as the drop in enrolled acreage might suggest. While initially enrolling mainly whole fields or farms (through periodically announced general signups), CRP increasingly uses “continuous signup” (which has stricter eligibility requirements than general signup) to enroll high-priority parcels that often provide greater per-acre environmental benefits. Conservation practices on these acres include riparian buffers, filter strips, grassed waterways, and wetland restoration. Riparian buffers, for example, are vegetated areas that help shade and partially protect a stream from the impact of adjacent land uses by intercepting nutrients and other materials, and provide habitat and wildlife corridors. Enrollment under continuous signup increased by about 50 percent, from 3.8 million acres in 2007 to 5.7 million acres in 2014. A version of this chart is found on the ERS web page, Agricultural Act of 2014: Highlights and Implications (Conservation).