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Over the next decade, crop prices are projected to decline while livestock prices generally rise

Wednesday, November 17, 2021

Recently released USDA projections reveal expectations for U.S. crop prices to decrease over the next 10 years while prices for major animal products, except hogs, are forecast to increase. Expected declines for crops follow a period of generally higher prices that have peaked during the current marketing year. The price-bolstering effects of economic recovery, renewed export demand, and logistical problems in supply chains are forecast to subside after the recent peak during the 2021/22 marketing year, and crop prices are forecast subsequently to return to the earlier pattern of generally lower prices through 2031. Hog prices are projected to follow a similar pattern to crops and to move toward levels that reflect normal weather and an absence of major market shocks including policy changes. Beef cattle and broiler prices are expected to demonstrate a modest increase in the early years of the projection period before leveling off to slower growth, resulting in an average price increase of 8 to 17 percent over the decade. Similar to most animal products prices, prices that farmers are expected to receive for their eggs are forecast to rise steadily throughout the projection period, partly based on increased demand for cage-free eggs and regulatory changes that are projected to increase costs of production. This chart is based upon forecasts and projections using data available as of October 12, 2021, and long-term projections to 2031 released on November 5, 2021. Current projections are shown in the Economic Research Service’s (ERS) Agricultural Baseline Database. For 2020’s farm price projections, see the ERS Chart of Note from November 9, 2020.

Family farm households received an estimated $2,167 on average from Economic Impact Payments in 2020

Wednesday, November 10, 2021

In 2020, U.S. family farm households received $4.3 billion in Federal assistance during the Coronavirus (COVID-19) pandemic from Economic Impact Payments (EIP) (also known as stimulus payments). USDA, Economic Research Service (ERS) researchers used data from the most recent available 2019 Agricultural Resource Management Survey on farm households’ adjusted gross income and household composition to estimate the average EIP disbursed. The estimated average was $924, $2,408, and $2,466 for single, head of household, and joint filers, respectively. This disparity partly reflects the lower income thresholds for single households, which resulted in some not receiving the maximum EIP and others not receiving EIP at all. Additionally, since unmarried people with dependents were assumed to file as head of household, these households were estimated to have received an additional $500 per dependent. Among family farm households, ERS researchers estimated that 18 percent of single filers did not receive EIP, compared with 17 percent of head of household filers, and 13 percent of joint filers in 2020. In April and May 2020, U.S. households of all types—farm or otherwise—received more than $266 billion from the EIP program. This chart appears in the Amber Waves feature “U.S. Agriculture Sector Received an Estimated $35 Billion in COVID-19 Related Assistance in 2020,” released September 2021.

In 2020, crops sector received 65 percent of Paycheck Protection Program loans for agriculture

Wednesday, October 27, 2021

Errata: On November 9, 2021, the chart and text were revised to clarify that the Paycheck Protection Program eligibility simulation was carried out on both commercial and intermediate farm operations. No other data or findings are changed.

As part of its response to the Coronavirus (COVID-19) pandemic, the U.S. Federal Government implemented the Paycheck Protection Program (PPP). Agricultural producers could use forgivable loans from this program to help keep employees on payroll and offset some of their operating costs. The maximum PPP loan amount was 2.5 times the monthly average profit plus payroll and eligible overhead expenses, such as the employer’s share of insurance payments and unemployment taxes. If used on eligible expenses within the first 24 weeks of disbursement, PPP loans were fully forgiven. According to data from USDA’s 2019 Agricultural Resource Management Survey (ARMS), 72 percent of all farm businesses (operations with gross cash farm income of more than $350,000 or smaller operations where farming is reported as the operator's primary occupation) had either positive net income or positive payroll, which met the two most important eligibility requirements to apply for PPP loans. Individual Small Business Administration (SBA) loan data indicated that almost 121,000 farm operations applied for a total of $6.0 billion in PPP loans in 2020. That accounted for 17 percent of presumed-eligible farm businesses based on the 2019 ARMS. Out of the total PPP loans that was disbursed to farm operations in 2020, $3.9 billion (65 percent) went to crop operations, and the remaining $2.1 billion (35 percent) went to livestock operations. This chart appears in the Amber Waves finding “U.S. Producers Received Almost $6.0 Billion From the Paycheck Protection Program in 2020,” released October 2021.

Gap between H-2A positions certified and H-2A visas issued grew during COVID-19 pandemic

Wednesday, October 20, 2021

The H-2A Temporary Agricultural Workers Program attracts foreign farmworkers on temporary work visas to fulfill short-term labor contracts. All positions to be filled with H-2A workers are first certified by the Department of Labor, then U.S. consulates issue corresponding visas. The number of positions certified each year generally exceeds the annual number of visas issued, in part because an H-2A worker may fill multiple positions on the same visa. At the onset of the Coronavirus (COVID-19) pandemic, temporary changes to H-2A program rules provided visa extensions to H-2A workers already in the country and allowed them to more easily switch to certified positions with other employers. In the first few months of the pandemic, the gap between positions certified and the number of visas issued grew. Position certifications typically peak in March, while visas issued peak a month later as workers begin work. In March and April 2020 combined, a record 81,000 positions were certified, and 57,000 visas were issued during the corresponding months of April and May. This difference is larger than previous years and suggests that proportionally fewer certified positions were filled with new H-2A entries in 2020. This chart first appeared in the USDA, Economic Research Service (ERS) report, Farm Labor Markets in the United States and Mexico Pose Challenges for U.S. Agriculture, published in November 2018, and has been updated through 2020. For more information on how H-2A visas have fulfilled seasonal labor requirements, see the ERS report Examining the Growth in Seasonal Agricultural H-2A Labor, published in August 2021, and the Amber Waves feature “Use of H-2A Guest Farm Worker Program More Than Triples in Past Decade,” published in September 2021.

Local residents living in oil-dependent counties experienced long-term effects following the oil boom and bust of the 1980s

Monday, October 18, 2021

Errata: On October 22, 2021, the map presented in this Chart of Note was revised to show the correct number of counties in the contiguous United States.

Focusing on the rapid rise and decline of oil production in the 1970s and 1980s, researchers at USDA’s Economic Research Service (ERS), the University of Oregon, and the University of Wisconsin-Madison studied the cumulative effects of oil booms (and subsequent busts) on households living in counties with the most dependence on oil extraction. The authors identified individuals living in “boom counties” in 1980, defined as those with greater than 2.5 percent employment in oil and natural gas extraction. On average, the incomes of boom households increased by $5,000 dollars annually during the early years of the 1975-1979 oil boom and $6,900 per year during the later boom of 1980-1984, compared with similar households in counties that were not producing oil. The subsequent bust, however, reduced household incomes on average by more than $8,000 annually from 1985 to 1992. These losses were driven in part by increased unemployment and the dissipation of relative wage gains during the boom. The earlier oil boom and bust appeared to have no effect on household income after 1993. The average household in a boom county saw cumulative income losses of $7,600 compared with households in non-boom counties between 1969 and 2012, the final year of the study. These income losses were experienced entirely by workers in their prime working age of 25-54. Boom household heads above 54 were also about 15 percent less likely to retire from 1989 to 1992, compared with non-boom household heads. To estimate the effects of booms and busts on employment, the researchers used annual household-level survey data from the Panel Study of Income Dynamics. This chart appears in the Amber Waves finding “Oil Booms Can Reduce Lifetime Earnings and Delay Retirement,” published October 2021.

Impact of changing capital gains taxation at death varies by farm size

Wednesday, October 6, 2021

A proposal to change the way capital gains are taxed at death would affect family farm estates differently according to the size of the farm. Under current law, most inherited assets receive a step-up in basis, which means the tax basis—the amount for determining gain or loss—of property transferred to an heir at death is increased to its current fair market value at the date of death, eliminating any capital gains tax liability on those inherited gains. The change, which was included in the American Families Plan (AFP), would end stepped-up basis for gains above $1 million for the estates of individuals or $2 million for married couples. Gains above these exemption amounts would be subject to tax at death. However, the transfer of a family farm to a family member who continues the operation would not result in a tax at death. Farm and business assets exceeding the exemption amounts would receive a carry-over basis deferring capital gains tax until the assets are sold, or until the farm is no longer family owned and operated. USDA, Economic Research Service (ERS) researchers, using modeling to evaluate potential effects of the AFP proposal, found that as family farm size increased, the estimated share of estates owing no tax at death and receiving stepped-up basis on all assets decreased, while the estimated share of estates that would receive carry-over basis increased. For small farm estates, with gross cash farm income (GCFI) less than $350,000, 83.4 percent would owe no capital gains tax at death and would receive a stepped-up basis on all assets, resulting in no change to their capital gains tax liability. Under the ERS model, that share would drop to 34.2 percent for midsize farms (those with GCFI of $350,000 to $1 million), 20.4 percent for large farms (with GCFI of $1 million to $5 million), and 3.6 percent for very large farms (with GCFI of more than $5 million). Some estates would be taxed on nonfarm gains at death and potentially could owe deferred taxes on farm gains if the heirs stop operating the farm. For those estates, the estimated share increased from 1.1 percent for small farms to 2.5 percent for very large farms. Other estates would not have to pay tax at death but could see deferred taxes on farm gains if the heirs stop operating the farm. For that group, the estimated share increased from 15.5 percent for small farms to 93.9 percent for very large farms. This chart can be found in the ERS report The Effect on Family Farms of Changing Capital Gains Taxation at Death, published September 2021.

How proposed capital gains tax changes could affect estates of family farms

Wednesday, September 22, 2021

The American Families Plan (AFP) that President Joe Biden announced in April 2021 included a proposal to make accumulated gains in asset value subject to capital gains taxation when the asset owner dies. Under current law, asset value gains can be passed on to heirs without being subject to capital gains taxation because the value of the assets are reset to the fair market value at the time of inheritance. This adjustment in asset valuation, known as a “stepped-up basis,” eliminates capital gains tax liabilities on any gains incurred before the assets were transferred to the heirs. AFP also included a provision that would exempt from capital gains taxes $1 million in gains for the estates of individuals and $2 million in gains for the estates of married couples, as well as for gains on a personal residence of $250,000 for individuals and $500,000 for married couples. Gains above these exemption amounts would be subject to tax at death. However, the transfer of a family farm to a family member who continues the operation would not result in a tax upon the death of the principal operator. Under the proposal, any remaining farm and business gains above the exemption amount would receive a “carry-over basis” that effectively defers any capital gains tax until the assets are sold or until the farm is no longer family-owned and operated. Using 2019 Agricultural Resource Management Survey data, USDA, Economic Research Service (ERS) researchers estimated that of the 1.97 million family farms in the United States, 32,174 estates would result from principal operator deaths in 2021. From these farm estates, the ERS model used to evaluate potential effects of the AFP proposal estimated that heirs of 80.7 percent of family farm estates would have no change to their capital gains tax liability upon death of the principal operator. Heirs of 18.2 percent of family farm estates would not owe taxes at the time of the principal operator’s death but could be subject to a future potential capital gains tax obligation on inherited farm gains if the heirs stop farming. Heirs of 1.1 percent of estates would owe tax on nonfarm gains upon death of the principal operator and have a future potential capital gains tax obligation resulting from inherited farm gains if the heirs stop farming. This chart can be found in the ERS report The Effect on Family Farms of Changing Capital Gains Taxation at Death, published September 2021.

Employment in U.S. agriculture grew 9 percent between 2010 and 2020

Friday, September 3, 2021

Data from the U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) show that wage and salary employment in agriculture was stable in the 2000s. Starting in 2010, it gradually increased from 1.07 million jobs to 1.17 million jobs in 2020—a gain of 9 percent. From 2010-20, growth was fastest in the livestock sub-sector, which added 41,300 jobs, an 18 percent increase, and in crop support services, which added 38,000 jobs, a 13 percent increase. Firms in the crop and livestock support sub-sectors provide specialized services to farmers including farm labor contracting, custom harvesting, and animal breeding services. By comparison, employment of direct hires in the crop sub-sector, which has the largest number of hired farm workers, remained essentially unchanged. Data from QCEW is based on unemployment insurance records, not on surveys of farms or households. As a result, it does not cover smaller farm employers in States that exempt such employers from participation in the unemployment insurance system. However, survey data from sources such as the American Community Survey and the Current Population Survey also showed rising farm employment since the turn of the century. This chart appears in the Economic Research Service topic page for Farm Labor, updated August 2021.

U.S. farm sector profits forecast to increase in 2021

Thursday, September 2, 2021

USDA’s Economic Research Service forecasts inflation-adjusted net cash farm income (NCFI)—gross cash income minus cash expenses—to increase by $19.8 billion (17.2 percent) from 2020 to $134.7 billion in 2021. U.S. net farm income (NFI) is forecast to increase by $15.0 billion (15.3 percent) from 2020 to $113.0 billion in 2021. Net farm income is a broader measure of farm sector profitability that incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income. If this forecast is realized, NFI would be 20.4 percent above its 2000–20 average and would be the highest since 2013. NCFI would be 18.9 percent above its 2000–20 average and would be the highest since 2014. Underlying these forecasts, cash receipts for farm commodities are projected to rise by $51.2 billion (13.8 percent) from 2020 to 2021, their highest level since 2015. Production expenses are expected to grow by $12.9 billion (3.5 percent) during the same period, somewhat moderating income growth. Additionally, direct Government payments to farmers are expected to fall by $19.3 billion (40.8 percent) in 2021 compared with 2020’s record high payments. This decline is largely caused by lower anticipated payments from supplemental and ad hoc disaster assistance for Coronavirus (COVID-19) relief. Find additional information and analysis on the USDA, Economic Research Service’s topic page for Farm Sector Income and Finances, reflecting data released on September 2, 2021.

Commercial farms received the highest average Government payments in 2019

Wednesday, July 21, 2021

Errata: On July 28, 2021, the chart was revised to correct an error in presentation. No other data or text were affected.

Government payments to farm operator households totaled $14.8 billion in 2019, based on data from USDA’s Agricultural Resource Management Survey. More than 30 percent of about 1.97 million U.S. farms received some Government payments that year, with an average payment of $24,623. The distribution of payments varied by farm type, which USDA’s Economic Research Service defines based on gross cash farm income (GCFI) and operator type. About 74 percent of commercial farms (those with $350,000 or more in annual GCFI) received Government payments in 2019, with an average payment of $84,775. By comparison, about 31 percent of intermediate farms (less than $350,000 in annual GCFI and a principal operator whose primary occupation is farming) received Government payments, with an average payment of $11,731. About 24 percent of all residence farms (less than $350,000 in annual GCFI and a principal operator who is retired from farming or has a primary occupation other than farming) received Government payments, with an average payment of $8,147. The distribution of payments also varied by the type of Government program. Across programs, average payments were always highest for commercial farms and typically lowest for residence farms, with intermediate farms in the middle. For example, average countercyclical payments in 2019 were $28,093 for commercial farms, compared with $5,800 and $2,660 for intermediate and residence farms, respectively. The only exception was in conservation payments, where intermediate farms had the lowest average payments. This chart appears in the July 2021 Amber Waves finding, Commercial Farms Received the Most Government Payments in 2019. For more information on the Federal programs discussed above, visit the topic page for Farm & Commodity Policy.

Research investments help many countries sustain growth in agricultural productivity

Monday, July 12, 2021

Raising the productivity of existing agricultural resources—rather than bringing new resources into production—has become the major source of growth in world agriculture. Farm productivity is measured by total factor productivity (TFP), an index that takes into account the land, labor, capital, and material resources employed in farm production and compares them with the total amount of crop and livestock output. If total output is growing faster than total inputs, then the total productivity of the factors of production (i.e., total factor productivity) is increasing. Using the latest available data through 2016, agricultural productivity has risen steadily in most industrialized countries at between 1 and 2 percent a year since at least the 1970s. Since the 1990s, many developing countries as well as transition economies that belonged to the former Soviet bloc also have increased their agricultural productivity. Long-term research investments to develop new technologies have been especially important to sustaining higher agricultural TFP growth rates in large, rapidly developing countries such as Brazil and India. Institutional and economic reforms, combined with technological changes, have led to significant benefits for Chinese agriculture. Additionally, Russian agriculture rebounded after the early 1990s economic transition from a planned to a market-based economy, and the southern region of the country achieved notable productivity improvement. In contrast, under-investment in agricultural research remains an important barrier to stimulating agricultural productivity growth in Sub-Saharan Africa. This chart appears in USDA, Economic Research Service data product for International Agricultural Productivity, updated November 2019.

Farms with higher sales had a larger share of households with positive farm income

Wednesday, June 23, 2021

Farm households earn income from both farm operations and off-farm sources, such as off-farm employment, pensions, and capital gains. In 2019, more than half (51 percent) of all U.S. farm households had positive net returns, where total revenue from farming exceeded total costs. Farms with higher sales had a larger share of households with positive farm income. For example, 39 percent of farm households with annual gross sales less than $10,000 had positive farm income, compared with 85 percent of farms with sales of $1 million or more. At the same time, 56 percent of households operated the smallest farms with sales of less than $10,000, compared with 4 percent operating the largest ones with annual sales of $1 million or more. Households operating larger farms relied more on income from farming than households operating smaller farms. For instance, households that operated farms with sales of $1 million or more—and that had net positive returns—earned a median share of 87 percent of their income from farming. For those with sales less than $10,000, that median share was 5 percent. This chart is based on data from the ERS data product ARMS Farm Financial and Crop Production Practices, updated December 2020.

Average age of hired farm workforce increased from 2006 to 2019

Monday, June 14, 2021

With fewer young immigrants entering the U.S. farm workforce, the average age of foreign-born hired farmworkers rose in 2019. That, in turn, pulled up the average age for the U.S. farm workforce as a whole. According to the latest data from the American Community Survey, the average age of foreign-born farmworkers increased by nearly 7 years from 2006 to 2019, from 35.7 to 41.6 years. In contrast, the average age for farmworkers born in the United States remained roughly constant over the same period. The average age of all farmworkers increased from 35.8 years in 2006 to 39.5 years in 2019. U.S. farmworkers, who make up less than 1 percent of the Nation’s workforce, are more likely to be Hispanic of Mexican origin and less likely to be citizens than are workers in occupations other than agriculture, according to the American Community Survey. This chart updates data found in the October 2020 Amber Waves data feature, “U.S. Farm Employers Respond to Labor Market Changes With Higher Wages, Use of Visa Program, and More Women Workers.”

Largest shares of women principal farm operators found on poultry and other livestock operations in 2019

Wednesday, June 9, 2021

Women play an integral part in farming, either as a principal operator or as a secondary operator. In 2019, more than half (51 percent) of all farming operations in the United States had a woman principal or at least one woman secondary operator. Women were primarily responsible for the day-to-day operation decisions—the “principal operator”—on 14 percent of farms. In 37 percent of operations, women were “secondary operators,” meaning they were involved in decisions for the operation but were not the principal operators. The share of principal farm operators who were women varied by commodity specializations. In 2019, the two largest shares of women principal operators were found on farms specializing in poultry (31 percent) and other livestock (about 30 percent). Operations specializing in dairy production had the largest share of operations with at least one woman secondary operator, about 54 percent. The smallest share (about 33 percent) of women operators, either principal or at least one secondary, was found on cotton farms. Among operations with at least one woman operator, 78 percent of the women were the principal operator’s spouse and worked on the farm. This chart is found in the Economic Research Service report, America’s Diverse Family Farms: 2020 Edition, released December 2020. It also appears in the June 2021 Amber Waves article, “Women Identified as Operators on 51 Percent of U.S. Farms in 2019.”

Larger U.S. dairy farms tend to be more profitable than smaller dairy farms

Tuesday, June 1, 2021

According to the most recently available data, in 2016, 62 percent of U.S. dairy farms with at least 2,000 cows generated gross returns that exceeded total costs, compared with 43 to 44 percent of farms in the two next-largest classes (500-999 cows and 1,000-1,999 cows). In the smallest classes (10-49 cows and 50-99 cows), less than 10 percent of farms generated positive net returns. Total costs include cash expenses such as those for feed, fuel, and hired labor, but they also include estimates of the costs of the farm’s capital and of the family labor provided to operate the dairy farm. A farm that does not cover total costs can continue to operate, and to provide a living for the family operating the farm, if it covers cash expenses and the costs of the family’s labor (total cost except capital recovery). For example, while about 20 percent of farms with 100-199 cows earned positive net returns in 2016, 46 percent earned enough to cover all cash expenses and to provide a living for the farm family. However, these farms did not earn enough to cover annual costs of capital recovery (the replacement value of the capital, such as equipment and structures, used on the farm). Continued operation makes financial sense for those farms until the cash expenses of maintaining an aging plant rise enough to cut into the family’s income from dairy farming. This chart appears in the Economic Research Service report Consolidation in U.S. Dairy Farming, released July 2020. It also appears in the August 2020 Amber Waves feature, Scale Economies Provide Advantages to Large Dairy Farms.

U.S. farm sector liquidity forecast to decline in 2021

Friday, May 21, 2021

Liquidity is the ability to convert assets to cash quickly to satisfy short-term obligations without the assets losing material value. Researchers at the USDA, Economic Research Service (ERS) examined two measures of the U.S. farm sector’s liquidity: working capital and the times interest earned ratio. Working capital measures the amount of cash available to fund operating expenses after paying off debt to creditors due within 12 months (current debt). ERS forecasts U.S. farm sector working capital in 2021 at $74.3 billion, a 13.6-percent decrease from 2020 after adjusting for inflation. If realized, this would be the largest decline since 2016. By comparison, the times interest earned ratio measures the farm sector’s ability to service debt out of net farm income, so a higher times interest earned ratio indicates greater ease in making debt payments. ERS forecasts the times interest earned ratio will decrease from 9.2 in 2020 to 8.4 in 2021, after a forecasted increase in 2020. The weakening of this ratio in 2021 reflects the forecast decline in net farm income as well as the expected increase in interest expenses. Still, the times interest earned ratio is forecast to remain above 2014-19 levels. This chart appears in the ERS Amber Waves finding, Farm Sector Liquidity Forecast to Decline in 2021, released March 2021.

Food services industry share of the food dollar increased in 2019 for eighth consecutive year

Monday, May 17, 2021

In 2019, restaurants and other eating places claimed 38.5 cents of the average U.S. food dollar, continuing a steady climb since 2009, when the food services industry’s share was 29.6 cents. Farm production was the only other industry with a rising food dollar share in 2019, up slightly to 7.6 cents from its 25-year low of 7.4 cents in 2018. The proportion of the food dollar was the smallest since 1993 for several industries in 2019: agribusiness (such as fertilizer and farm services), food processing, packaging, wholesale trade and retail trade. The 2019 food dollar reflects conditions before the COVID-19 pandemic. ERS’s annual Food Dollar Series provides insight into the industries that make up the U.S. food system and their contributions to total U.S. spending on domestically produced food. ERS uses input-output analysis to calculate the cost contributions from 12 industry groups in the food supply chain. Annual shifts in the food dollar shares between industry groups occur for a variety of reasons, including changes in the mix of foods consumer buy, costs of materials, ingredients, and other inputs, as well as changes in the balance of food at home and away from home. This chart is available for the years 1993 to 2019, and can be found in ERS’s Food Dollar Series data product, updated on March 17, 2021.

COVID-19 Federal financial assistance to U.S. farms varied by State

Friday, May 7, 2021

In 2020, the Federal Government provided assistance to farm operations that experienced losses because of the Coronavirus (COVID-19) pandemic. The aid came in the form of loans from the Paycheck Protection Program (PPP) and payments from the two iterations of the Coronavirus Food Assistance Program (CFAP), programs 1 (CFAP 1) and 2 (CFAP 2). PPP, administered by the U.S. Small Business Administration, provided loans to small businesses to help them keep their workers employed during the pandemic. CFAP, administered by USDA’s Farm Service Agency, provides assistance to agricultural producers whose operations were directly affected by the pandemic. The PPP loan amount each farm business could receive depended on their income and employment costs, while CFAP payments were based on commodity prices, previous sales, acres, and/or inventory. USDA, Economic Research Service (ERS) researchers compared the total amount of PPP loans plus CFAP payments received in each State in 2020 to its 2019 value of production (estimates of the 2020 value of production are not yet available). Massachusetts received the largest share of total loans and payments relative to the State’s 2019 value of production (12.2 percent), and South Dakota came in second at 11.1 percent of its 2019 production. California, which had the highest value of agricultural production in 2019, received the largest total amount of PPP and CFAP aid at $3.1 billion. Iowa, which had the second highest level of agricultural production in 2019, was No. 2 with $2.4 billion in assistance. This chart used data found in the ERS data product Farm Income and Wealth Statistics, Farm sector financial indicators, State rankings, updated February 2021.

Share of off-farm income varies by commodity specialization

Monday, April 26, 2021

Farm households obtain income from farming and off-farm income, such as salaries, pensions, and investment interest. Among farm businesses, off-farm wage and salary income varied by commodity specialization. For general crops, beef cattle, and poultry operations, average off-farm wage and salary income contributed more than half of total household income. Dairy operations, by comparison, averaged $37,339 in off-farm wage and salary income, the lowest of any commodity. Dairy operations require extensive and ongoing time commitments, so managing a dairy farm rarely permits an operator to work many hours off-farm. As a result, dairy farm households relied primarily on income from the operation, an average of $148,831 in 2019. This chart is based on data from the ERS data product ARMS Farm Financial and Crop Production Practices, updated December 2020.

Farm share of U.S. food dollar increased in 2019 after 7 years of decline

Wednesday, March 31, 2021

On average, U.S. farmers received 14.3 cents for farm commodity sales from each dollar spent on domestically produced food in 2019, up from a newly revised estimate of 14.2 cents in 2018. Known as the farm share, this amount increased slightly after 7 consecutive years of decline. Average prices received by U.S. farmers (as measured by the Producer Price Index for farm products) have been relatively stable for the last three years, following sharp declines in 2015 and 2016. The USDA, Economic Research Service (ERS) uses input-output analysis to calculate the farm and marketing shares from a typical food dollar, including food purchased at grocery stores and at eating-out establishments. The marketing share covers the costs of getting domestically produced food from farms to points of purchase, including costs related to packaging, transporting, processing, and selling to consumers at grocery stores and eating-out places. The farm and marketing shares of the food dollar in 2019 reflect conditions before the COVID-19 pandemic. Beginning in March 2020, the ERS monthly Food Expenditure Series reported sharp declines in the share of eating-out food dollars. Farmers receive a smaller share from eating-out dollars because of the added costs for preparing and serving meals at restaurants, cafeterias and other food-service establishments. The data for this chart can be found in ERS’s Food Dollar Series data product, updated March 17, 2021.