Survey results: Family farms dominate ag landscape

WASHINGTON — U.S. farming is still overwhelmingly a family business, according to the latest Agricultural Resource Management survey data.

The U.S. Department of Agriculture Economic Research Service survey, conducted in early 2022 and released recently, found 98% of the nation’s 2 million farms are classified as family farms, accounting for 83% of production.

“We define a farm as any place that sold or normally would have sold at least $1,000 of farm products in a given year,” said ERS Agricultural Economist Noah Miller in a webinar Dec. 7.

“A family farm refers to any farm where the majority of the business is owned and operated by an operator or individuals related to the operator. The operator is the person making the day-to-day operating decisions for the farm. This means that the family farm definition ties farm management and ownership together.”

Survey results were broken down into farm sizes. Small family farms are those with gross cash farm income less than $350,000, including off-farm occupation farms, farming occupation farms, low sales farms with GCFI less than $150,000 and moderate sales farms with GCFI between $150,000 and $349,000.

Midsize family farms are defined as those with GCFI between $350,000 and $999,999. Large-scale family farms have GCFI of $1 million or more annually.

Non-family farms are defined as those where any operator or any individuals related to them do not own a majority, or 50%, of the business.

Summary

Miller highlighted the survey results:

• Small family farms made up 89% of the farm count and operated nearly 50% of the farmland, but only generated 18% of the total value of production. The largest share of the value of farm production, at 46%, occurred on large-scale family farms. However, small family farms accounted for 47% of the value of poultry and eggs and 53% of hay production.

• The share of farms with a low-risk operating profit margin varied by farm size in 2021. Between 50% and 81% of small family farms had an OPM in the high-risk zone, an OPM less than 10% — depending on the farm type — compared with 25% and 33% of midsize and large-scale family farms, respectively. Some small family farms of each type operated in the low-risk zone, as did more than 40% of midsize and large-scale family farms.

• Farm households, in general, were neither low income nor low wealth. In 2021, median farm household income, which includes both farm and off-farm income sources, exceeded that for all U.S. households, but was lower than the median income of all U.S. households with self-employment income. About 38% of farm households had income below the median for all U.S. households, and 2% had wealth below the U.S. median in 2021.

• USDA Conservation Reserve Program payments went to different types of farms than other government payments. CRP payments target environmentally sensitive cropland, with most payments going to retirement, off-farm occupation and low-sales farms. In contrast, most commodity-related and working-land payments went to family farms with a gross cash farm income of $350,000 or more.

• Most of the pandemic assistance to U.S. agriculture came from the U.S. Small Business Administration. Farms also received USDA assistance from the Coronavirus Food Assistance Program, Pandemic Cover Crop Program and Pandemic Livestock Indemnity Program. Midsize and large family farms received a greater share of total pandemic assistance than very large family, small family and non-family farms.

• Overall, 14% of all farms participated in federal crop insurance in 2021. However, 62% of farms growing row crops purchased federal crop insurance. Indemnities from federal crop insurance were roughly proportional to acres of harvested cropland. Midsize and large-scale family farms together accounted for 66% of all harvested cropland acres and received 84% of indemnities from federal crop insurance in 2021.

• Nearly 3% of the 2 million U.S. farms were engaged in some form of agritourism in 2021. Participation in agritourism increased by approximately half a percent between 2020 and 2021. The survey found 68% of agritourism-participating farms came from the low-income category, followed by middle-income farms at 23% and high-income farms at 8%. Low-income farms also derived substantially more of their income from agritourism. On average, net proceeds of agritourism accounted or 34% of participating low-income farms’ gross cash income, compared with 9% and 10% for middle- and high-income farms, respectively.

• Price indices for production inputs — that is, seed, fertilizer, chemicals, fuel and feed — increased an average of 21% in 2021, compared to the 23% increase in the Producer Price Index in 2021. The fertilizer price index saw the largest increase, at 66%, followed by the increase in the fuel price index, at 34%. The seed price index remained unchanged.