Large family farms receive the highest payments from energy development

Energy payments, such as for leasing land for wind, oil, or natural gas development, are higher on average for large-scale family farms. Among those receiving payments from 2011 to 2020, large-scale family farms (those with gross cash farm income of $1 million or more), received an average annual energy payment of $152,285. By comparison, small family farms, whose gross cash farm income is less than $350,000, received an average annual energy payment of $18,088. Although the payments for midsize farms (those with gross cash farm income between $350,000 and $999,999) were similar to nonfamily farms, the portion of midsize family farm landowners receiving payments was more than twice as high at 6.82 percent versus 3.23 percent. This indicates that nonfamily farms may have different objectives and face different trade-offs when evaluating whether to lease land for energy development. Between 2011 and 2020, 3.5 percent of farm operations received energy payments, and the average annual payment to the operators was more than $30,000 in 2020 dollars. Read more about the size, frequency, trends, and relative contribution of energy payments to farm operator income in the USDA, Economic Research Service report The Role of Commercial Energy Payments in Agricultural Producer Income, released in April 2024.

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