#515. America’s Diverse Family Farms – 2014

America’s Diverse Family Farms – 2014

The Unites States Department of Agriculture’s Economic Research Service recently posted America’s Diverse Family Farms – 2014 Edition.  This report looks at the make-up of farms in America, from the size of the farm, the production on those farms, the number and age of operators, profits, and government and insurance payments. The Conclusions and Implications of the report are outlined below:

• Farming is still overwhelmingly comprised of family businesses. Ninety-seven percent of farms are family farms, and they account for 85 percent of farm production.

• Small farms make up 90 percent of the farm count and operate half of the farmland. Most farm production, however, occurs on midsize and large-scale family farms.

• The nonfarm economy is critically important to operators of small family farms. Because many small-farm households rely on off-farm sources for most of their income, general economic policies, such as tax or economic-development policy, can be as important to them as traditional farm policy.

• Thirty-two percent of U.S. farms have a principal operator at least 65 years old. Some potential replacement operators are already working as secondary operators on multiple-generation farms. A substantial number of people also enter farming, although they are not necessarily young. With growing productivity in farming, the competitive market for agricultural commodities is likely to mean that fewer, but larger, farms will be necessary in the future.

• Different farm programs affect distinctly different sets of farmers. Commodity program payments largely flow to moderate-sales, midsize, and large farms; the largest share of working-land conservation payments go to midsize farms; and land-retirement conservation payments largely go to retirement, off-farm occupation, and low-sales farms. Most farms, however, do not receive Government farm-related payments and are not directly affected by them.

• Federal crop insurance has grown in importance in recent decades. Indemnities from Federal crop insurance first exceeded Government payments to farmers in 2011. The distribution of indemnities is roughly proportionate to acres insured, so midsize and large farms receive 70 percent of indemnities.

Farming continues to be the key industry in many small towns across America. We at Agracel will always hold a soft spot for farmers and the agriculture industry, as that is where our roots lie. (Learn more here.)  We will continue to watch this industry as it evolves.