It’s no secret that over the last three decades U.S. farms have become much larger, but despite all the blather about commercialization of farming, the majority of the nation’s farms remain family-owned/operated.
While many are small operations run by people whose primary source of income is off the farm, the farms that provide a livelihood for the families running them have become much larger, and account for a large and growing share of agricultural production, according to a USDA Economic Research Service analysis, “Three Decades of Consolidation in U.S. Agriculture,” by James M. MacDonald, Robert A. Hoppe, and Doris Newton.
By 2012, they note, 36 percent of all cropland was farms with at least 2,000 acres, up from 15 percent in 1987. By 2015, 51 percent of the value of U.S. farm production was from farms with at least $1 million in sales, compared to just 31 percent in 1991 (adjusted for price changes). The ERS and National Agricultural Statistics Service reports classify large farms as those with at least $1 million in sales, and very large farms as those with at least $5 million.
Changes in the farm sector’s organization have accompanied and facilitated major improvements in agricultural productivity, allowing the U.S. to “substantially increase agricultural production while reducing the amount of land, labor, and capital devoted to agriculture.
Large farms are not just larger, the authors note. While most are family-owned and operated, they encompass a wide range of legal structures and ownership patterns. They use leases and rental agreements to access land and capital, and often hire custom service providers and labor contractors for some farm tasks, freeing the operators to specialize. Some large farms are part of firms that own multiple farms and operate them as integrated businesses.
The long-term shifts toward agricultural consolidation have occurred in tandem with a shift toward greater farm specialization. While few farms specialize in a single crop, field crop operations increasingly grow just two or three crops, versus four to six crops previously. Livestock production continues to shift toward farms that produce no crops, but rely on purchased feed.
It is in areas such as hogs and poultry production that large corporate firms “play a coordination role” in U.S. farming through the use of contracts. Some firms — for example, in specialty crops, cattle feedlots, poultry, and hogs— operate multiple farms.
Changes in the farm sector’s organization have accompanied and facilitated major improvements in agricultural productivity, the authors note, allowing the U.S. to “substantially increase agricultural production while reducing the amount of land, labor, and capital devoted to agriculture.”
Bucking the general trend of consolidation, cattle cow-calf operations exhibit little consolidation; 44 percent of pasture and grazing land (primarily used for cattle) was on ranches with at least 10,000 acres in 2012, down from 51 percent in 1987. “These sectors are important because permanent pasture and grazing land accounts for over 400 million acres (45 percent) of U.S. farmland, and because over 700,000 U.S. farms have beef cows.”
Download the complete report at https://bit.ly/2FF91Mw