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Production Shifting to Very Large Family Farms

Image for Amber Waves finding "Production Shifting to Very Large Family Farms"

U.S. farm production is shifting to larger operations at the same time that people are continuing to be involved with part-time, small-scale farming operations. Small family farms (annual sales below $250,000) still account for most of the Nation’s farms, but their share of the value of U.S. agricultural production fell by nearly a third between 1993 and 2003. (Sales and production are adjusted for price changes and are reported in 2003 dollars.)

The number of small family farm operators who reported farming as their primary occupation has declined. In 1993, these farms accounted for 37 percent of all farms and 32 percent of the value of production. By 2003, their shares had fallen to 27 percent of all farms and 20 percent of production. By contrast, residential farms—or small farms whose operators report off-farm work as their primary occupation—rose from 36 percent of all farms in 1993 to 42 percent in 2003. But their average sales were very low ($12,000 in 2003), accounting for only 5 percent of production. In addition, small family farms with retired operators also increased as a proportion of all farms over the last decade.

Where did production go? Between 1993 and 2003, the number of nonfamily farms, which include farms with hired managers as well as farms organized as nonfamily corporations and cooperatives, grew by about a fourth to 35,000, and their share of production rose from 10 to 14 percent. But the major production shift is attributed to very large family farms, which have at least $500,000 in annual sales. The number of very large family farms rose by nearly half to 66,600 over the period, while their share of production grew from 33 to 44 percent. Production of livestock and fruits and vegetables has long been concentrated among very large family farms; substantial shares of field crop production are shifting to those operations as well.

This article is drawn from...

Structural and Financial Characteristics of U.S. Farms: 2004 Family Farm Report, by David Banker and James MacDonald, USDA, Economic Research Service, March 2005

Farm Structure and Organization, by Robert Hoppe and Doris Newton, USDA, Economic Research Service, May 2014