Classifying Diverse Farms
Broad descriptions of farms based on U.S. averages can mask variation among different sizes and types of farms. A farm classification—or typology—developed by the Economic Research Service (ERS) categorizes farms into more homogeneous groupings for reporting and evaluation purposes. The classification is based largely on annual gross cash farm income of the farm business, the primary occupation of the operator, and ownership of the farm.
The ERS Farm Typology
Farm size is measured by annual gross cash farm income (GCFI)—a measure of the farm's revenue (before deducting expenses) that includes sales of crops and livestock, payments made under agricultural federal programs, and other farm-related cash income including fees from production contracts.
- Small family farms (GCFI less than $350,000)
- Retirement farms. Small farms whose principal operators report they are retired, although they continue to farm on a small scale.
- Off-farm occupation. Small farms whose principal operators report a primary occupation other than farming. The category also includes farms (about 18 percent of off-farm occupation farms) whose operators do not consider themselves to be in the labor force.
- Farming-occupation farms. Small farms whose principal operators report farming as their primary occupation.
- Low-sales farms. GCFI less than $150,000.
- Moderate-sales farms. GCFI between $150,000 and $349,999.
- Midsize family farms (GCFI between $350,000 and $999,999)
- Large-scale family farms (GCFI of $1,000,000 or more)
- Large farms. Farms with GCFI between $1,000,000 and $4,999,999.
- Very large farms. Farms with GCFI of $5,000,000 or more.
- Nonfamily farms. Farms where an operator and persons related to the operator do not own a majority of the business.
The farm typology focuses primarily on the "family farm," or any farm where the majority of the business is owned by an operator and individuals related to the operator, including relatives who do not live in the operator's household. USDA defines a farm as any place that produced and sold—or normally would have produced and sold—at least $1,000 of agricultural products during a given year. USDA uses acres of crops and head of livestock to determine if a place with sales less than $1,000 could normally produce and sell at least that amount. For more information, see the ERS report, Updating the ERS Farm Typology (EIB-110, April 2013).
Distribution of U.S. Farms, Value of Prouction, and Farm Assets
Based on the ERS farm typology and data from the 2019 Agricultural Resource Management Survey (ARMS), 98 percent of U.S. farms are family farms. The remaining 2 percent are nonfamily farms, which produce 14 percent of the value of agricultural output. Two features of family farms stand out. First, there are many small family farms—those with GCFI less than $350,000—making up 90 percent of all U.S. farms and holding 62 percent of farm assets. Second, most production—65 percent—occurs on the 8 percent of family farms classified as midsize or large-scale. Among small family farms, moderate-sales farms (GCFI of $150,000 to $349,999) account for the highest share of total U.S. production, at 10 percent.