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Family farms account for the vast majority of U.S. agricultural production, according to the U.S. Department of Agriculture. Forum News Service file photo

Report: Family farms still dominant

Family farms continue to be the core of U.S. agriculture, a new federal government report says.

Family farms account for 98% of U.S. farms and 88% of U.S. ag production, according to “America’s Diverse Family Farms – 2019 Edition” from the U.S. Department of Agriculture’s Economic Research Service.

The numbers reflect a longstanding pattern, Bryon Parman, North Dakota State University Extension agriculture finance specialist, said when asked by Agweek to comment on the report.

“(Ag) corporations get a lot of attention, but family farms are still crucial,” he said, adding that the report held few, if any, surprises.

The report defines a family farm as one where the majority of the business is owned by the primary operator — the person responsible for day-to-day decisions — and individuals related to the primary operator.

Further, 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 ag products. That definition is a very low hurdle to clear, and greatly increases the number of farms covered by the report.

The report notes that averages can mask substantial variations among farms, with farm size often trumping farm numbers. For example, half of all U.S farms sold less than $6,000 in agricultural production in 2018 — even though 50% of all U.S. ag production occurred on farms with at least $1 million in 2018 ag productions.

“Statistics can be misleading,” Parman said.

Even so, several statistics from the report stand out to emphasize the importance of family farms:

  • About 90% of U.S. farms are small (gross cash farm income of less than $250,000 annually.) In 2018, small farms accounted for 48% of the land operated by farms.

  • Large-scale family farms (gross cash farm income of more than $1 million annually) accounted for 46% of production, more than any other segment. Mid-scale family farms (gross cash farm income of $350,000 to $999,000 annually) accounted for 21% of production. So roughly two-thirds (67%) of U.S. ag production occurred on family farms with at least $350,0000 in gross cash farm income.

  • Nonfamily farms accounted for just 2% of farms and 12% of ag production in 2018. Nonfamily farms include partnerships of unrelated partners, closely held nonfamily corporations, farms with a hired producer unrelated to the owners, and (relatively few) publicly held corporations.

  • Midsize ($350,00 to $999,000 in gross cash farm income) farms and large-scale (more than $1 million in gross cash farm income) farms accounted for 74% of cash grains/soybean production and 66% of hog production.

  • Small (less than $350,000 in gross cash farm income) farms and large-scale farms together account for 69% of beef production. Small farms generally have cow/calf operations, while large-scale farms are more likely to operate feedlots.

The report also found that small farms generally have a higher risk of financial problems than midsize, large and very large farms. Principal operators of small farms often have off-farm income, however, which helps to pay family living expenses and can assist small farms to remain in operation.

To read the report: https://www.ers.usda.gov/webdocs/publications/95547/eib-214.pdf?v=9906.4.

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