A quarter-century ago, small farms generated 46% of U.S. agricultural production. Today, the powerhouse of production is the large family farm with more than $1 million a year in gross cash farm income (GCFI). They represented 2.9% of the U.S. farm total in 2015 but were responsible for 42% of ag output, say USDA economists James MacDonald and Robert Hoppe.
When all types of ownership are considered, there were 65,000 farms with $1 million or more GCFI. Some 90% were family owned. The remaining 6,300 farms included 1,760 corporations. Almost all of the rest were partnerships, cooperatives, or operated by managers on behalf of trusts, estates, families, or institutions. Most of the corporate farms had 10 or fewer shareholders.
“Large corporations play important roles in setting procurement standards and organizing supply chains for farm products, but they directly operate very few U.S. farms,” say MacDonald and Hoppe. They total a few hundred farms out of more than 2 million.
Larger farms have higher operating profit margins and stronger financial performance, in general, than smaller operators. “The persistent gap in financial performance between large and small farms in 2015 indicates that consolidation is likely to continue,” say MacDonald and Hoppe.
As an example, in 1982, half of U.S. cropland was on farms that operated more than 589 acres; half was on farms with less than 589 acres. In 2012, the midpoint size was more than double at 1,234 acres.
“This shift was not only large and persistent but also ubiquitous, occurring in almost all states and for all crops,” say the economists.
Source: Agriculture.com
