The USDA’s Economic Research Service has updated its annual “America’s Diverse Family Farms” report, which primarily focuses on the “family farm,” or any farm where the majority of the business is owned by the principal operator and persons related to them. USDA defines a farm as any place that, during a given year, produced, and sold—or normally would have produced and sold—at least $1,000 of agricultural products. Farm size is measured by gross cash farm income (GCFI), a measure of the farm’s revenue including sales of crops and livestock, government payments, and other farm-related income, including fees received by operators from production contracts. The full report is available HERE. Below are some of the highlights:
Most U.S. Farms are Small Family Farms
- In 2020, approximately 89% of all farms were small family farms. Compared with 2011—the earliest year using the current farm typology—the share of land operated by small family farms fell from 52 to 48%, and the share of the value of production on small family farms declined from 26 to 20%.
- Large-scale family farms accounted for 46% of the total value of production in 2020, an increase from 35% in 2011. These farms also accounted for an increased share of total land operated, up from 16% in 2011 to 24% in 2020.
- In total, family farms accounted for about 98% of total farms and 87% of total production in 2020.
- Nonfamily farms accounted for the remaining 2% of farms and 13% of production. Among nonfamily farms, 18% had a GCFI of $1 million or more. Such farms accounted for 90% of nonfamily farms’ production. Examples of nonfamily farms include partnerships of unrelated partners, closely held nonfamily corporations, farms with a hired operator unrelated to the owners, and publicly held corporations.
Large-Scale Farms Produce Majority of Some Commodities
- The majority of the values of cotton (62%), dairy (73%), and high-value crops (57%) was produced on large-scale family farms in 2020. Small family farms produced the majority of hay (59%).
- Most poultry production is done under production contracts with a contractor paying a fee to a farmer who raises poultry to maturity. Small family farms produced 49% of U.S. poultry and egg output in 2020.
- Over one-quarter of beef production occurred on small family farms in 2020, whereas another 57% occurred on midsized and large-scale family farms. Small family farms generally have cow/calf operations, while large-scale family farms are more likely to operate feedlots.
- Nonfamily farms produced 27% of all high-value crops; 57% was produced on large-scale family farms in 2020.
Operating Expenses Vary Across Commodity but Relatively Unchanged from 2011
- A large share of total expenses on field crop farms went toward fertilizers and other chemicals (26%) in 2020, which was slightly less than the share spent in 2011 (27%). Spending on seed and plants accounted for another 14% of expenses on field crop operations in 2020, which was slightly more than in 2011 (13%).
- Feed expenses made up 48% of all expenses on dairy operations, 19% on cattle operations, and 29% on other livestock operations in 2020. The share of expenses allocated to feed on dairy and other livestock operations was similar in 2011. Livestock purchases accounted for a greater share of all expenses on beef cattle operations than did feed at 28% in 2020.
- The share of labor costs across all farms increased by 24% since 2011, despite a 22% decrease in the share allocated to labor costs for beef cattle operations. The largest increase in the share of operating expenses allocated to labor was in “other livestock” farms and specialty crops (19% and
- 13%, respectively).
- Unlike expenses such as seed or feed that follow closely with crop and livestock operations, certain expenses had relatively consistent shares across all types of farms in 2020. Machine-hire and custom work ranged from 1 to 5%; fuels and oils ranged from 3 to 6%; repairs and maintenance ranged from 4 to 8%; and other variable expenses ranged from 3 to 7% across all farm specializations. These shares of expenses were similar in 2011.
Median Total Family Farm Household Income Exceeded Median of All U.S. Households
- Median total farm household annual income varied across farm types, with very large family farms having the largest median income at over $1 million compared with low-sales family farms at $55,455. Low-sales and retirement farms ($65,526) had median household income below all U.S. households ($67,521) and the median among U.S. households with self-employment income ($89,492).
- The percent of family farms with income below the U.S. median-income level varied from 9 to 68%, depending on the type of farm.
- Operators of small family farms—especially retirement, off-farm occupation, and low-sales farms—often reported losses from farming. In 2020, the average farm income among off-farm occupation farms was –$2,427 and low-sales farms was –$1,637. Retirement farm households reported average farm income of $5,430 in 2020.
- Farm households often use off-farm income to cover farm expenses. While self-employment and wage salary jobs are the primary sources of off-farm income for farm households, public and private pensions, interest and dividend payments, asset sales, Social Security payments, and other sources of income have provided a significant share of off-farm income, particularly for retirement farms, which in 2020 reported $42,634 in unearned income on average.
- Most family farms also have higher wealth than the median household in the United States. The share of family farms that have wealth below the median wealth held by all U.S. households ranged from 1 to 5%, depending on the type of farm. Land comprises most farm households’ wealth.