How do you see the future of family farms?
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| Can our current farm community structure continue as a viable business model? |
The average size of a U.S. crop farm has changed little
during the past three decades. However, this seeming stability masks important
structural changes in the farm sector: there are growing numbers of very small
and very large farms and declining numbers of mid-sized farms. In 2011, 1.68
million U.S. farms had an average size of 234 acres, according to our USDA.
However, 80% of farms were smaller than this average with just 45 acres. On the
other hand, most cropland was on much larger farms—those with 1,000 acres or
more. How can this be?
Cropland consolidation has occurred across the U.S. with
most crops shifting to larger farms. As examples; the midpoint enterprise size
for corn rose from 200 acres to 600 acres, from 450 to 1,090 acres for cotton,
from 295 to 700 acres for rice, from 243 to 490 acres for soybeans, and from
404 to 910 acres for wheat. In fact, cropland shifted to larger operations in
almost all commodities. Based on census of agriculture data the calculated
midpoint acreages for 39 crops accounting for berries, fruits, tree nuts, and
vegetables also experienced an average increase over 107%.
The evidence is consistent. Cropland shifted to larger
farms in most States and for most crops. The increases were persistent over
time, and they were substantial.
Among the many factors contributing to cropland
consolidation, two have had a particular effect: changes in technology and
changes in farm organization. Farmers who want to make a living from farming,
and who can operate a larger crop operation, have a strong incentive to expand
because larger operations, on average, show better financial performance.
In recent decades, farm equipment has gotten larger and
faster, and guidance systems have become more precise and reliable. With
available equipment having higher effective speeds, larger capacities, and the
ability to cover more of a field with each trip across, farmers can now cover
more acreage in a given amount of time than ever before.
Changes in farm organization have also affected
consolidation. As late as 1960, most U.S. farms raised at least some cattle,
poultry, and swine, and almost all farms raised corn to feed this livestock. By
2011, less than 10% of farms had any swine, poultry, or dairy cattle. As a
result, farmers without a livestock enterprise have more time available to
devote to crop production, and operate a larger crop enterprise.
Farmers have also pursued organizational changes that
limit some of the financial risks faced by larger and more specialized
operations. They now rely more on forward contracts to manage input and product
price risks, and they rely more on leased equipment and custom service
providers to limit the risks associated with major purchases of fixed capital
equipment.
In 2011, 96% of U.S. farms with cropland were family
farms. Few U.S. industries are as dominated by family businesses as
agriculture. To date, family farms
continue to dominate U.S. agriculture. If continued innovations enable large,
complex operations to overcome the information-gathering, monitoring, and
decision-making advantages still clearly held by family farms, then they may be
able to make wider use of their ability to finance large-scale operations.
Information for this article was adapted from: Farm Size
and the Organization of U.S. Crop Farming, by James MacDonald, Penni Korb, and
Robert Hoppe, USDA, Economic Research Service, August 2013
For additional research on U.S. farms, farming and farm
families check:
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