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Are we seeing a resurgence in small farms? The latest Census of Agriculture reported that there were more small farms in 2007 than in 2002. But it’s important to understand the diversity among small farms, and the broad definition of a farm.
USDA defines a small farm as an operation with gross cash farm income under $250,000. Within that group are commercial and noncommercial farms. The number of small commercial farms – with sales of $10,000 to $250,000 – actually fell between 2002 and 2007. It was the noncommercial farms that accounted for the growth in small farm numbers. In fact, all of the growth occurred among farms under $1,000 in sales. These are classified as farms so long as they have enough land or livestock to generate $1000, whether or not actual sales reach that level. Most of these operations are better described as rural residences; the households on these farms – and on many other small farms – rely heavily on off-farm income.
While most U.S. farms are small – 91 percent according to the Census of Agriculture – large farms ($250,000 and above) account for 85 percent of the market value of agricultural production. Moreover, the number of small commercial farms, as well as their share of sales, has shrunk over time.
Production is shifting to larger farms because economies of scale reduce costs in some tasks, and because modern tillage systems, seeds, and equipment reduce the time needed to perform other tasks. Farmers who are able to assemble the needed land and equipment can now run bigger farms than they could 25 years ago.
Despite the continuing shift in production to larger farms, the contribution of small commercial family farms is still considerable. They numbered about 800,000 of the 2.2 million U.S. farms in 2007, and the value of their output exceeded the production of all Corn Belt farms. And many small operations remain profitable.
What about the product mix? Some observers regard fruit and vegetable production, with limited land needs, as a viable small farm option. But many surviving small commercial farms focus on commodities that involve a limited labor commitment. Cattle, poultry, and grains/soybeans – which can be produced on a part-time basis – account for over 70 percent of small commercial farm production.
Along with my colleagues Bob Hoppe and Penni Korb, I invite you to learn more about these issues from our report Small Farms in the United States: Persistence Under Pressure.
By Jim MacDonald, Chief, Agricultural Structure and Productivity Branch, Economic Research Service
Small farm. Photo courtesy Shutterstock.
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