Commodity Payments, Farm Business Survival, and Farm Size Growth

by Nigel Key and Michael J. Roberts

In the last 25 years, U.S. crop farms have steadily declined in number and grown in average size, as production has shifted to larger operations. Larger farms tend to receive more commodity program payments because most payments are tied to a farm's current or historical production, but whether payments have contributed to farm growth is uncertain. This study uses farm-level data from the census of agriculture to determine whether there is a statistical relationship between farm commodity program payments and greater concentration in production. The analysis indicates that, at the regional level, higher commodity program payments per acre are associated with subsequent farm growth. Also, higher payments per acre are associated with higher rates of farm survival and growth.

Keywords: agricultural economics, farm commodity payments, commodity program, producers, cropland, crops, farm structure, cropland concentration, production, census of agriculture, agricultural payments, farm size, farm survival, consolidation

In this publication...

• Entire Report
• Report summary
• Abstract, Acknowledgments, Contents, and Summary
• Introduction
• Determinants of Farm Size and Survival
• Rapid Growth in Land Concentration
• Commodity Program Payments and the Concentration of Cropland
• Effect of Payments on Growth and Survival of Farms
• Summary and Discussion
• References
• Appendix