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April 2012 Volume 18 Number 2
US: Farm Income, Employment, Ag-Gag
US farmers had a record year in 2011, producing crops and livestock worth over $400 billion, with about half from crops and half from livestock. Net farm income topped $100 billion, the most ever, and farm exports reached a record $135 billion.<< back
Low interest rates combined with rising farm exports raised the price of farm land. The average price of US farm land doubled between 2000 and 2010, from $1,090 to $2,140 an acre, pushing the value of farm assets toward $2.5 trillion. Farm prices and farm land values are expected to remain high in 2012.
Average incomes of farm households are higher than average incomes of nonfarm households, $77,200 compared to $68,000 in 2009. About 90 percent of the household income of farm households comes from nonfarm sources. However, as farm sales increase, so does the share of income from farm sources.
Employment. Even though less than two percent of the 155-million strong US labor force is employed on farms, agriculture is sometimes described as the largest sector of the US economy. The reason is that farming is considered the keystone of the larger food and fiber sector of the economy. Without farmers, this argument runs, there would be fewer workers employed in the input or upstream industries that provide inputs to farmers, and fewer employed in output or downstream industries that process, transport, and sell food.
Producing food and fiber on farms employed an average 1.6 million workers in 1996, according to USDA, but providing inputs from seeds to equipment to farmers employed an average 4.3 million workers. Processing and distributing food and fiber employed 16.7 million workers, so there were an average 13 nonfarm workers employed for each farm worker in 1996.
Wage in food and fiber are lower than average, explaining why the $1 trillion food and fiber system employed 17 percent of the US labor force in 1996 while generating 13 percent of GDP.
Productivity. Productivity measures efficiency, and the productivity growth that is key to rising incomes means more output from the same or fewer inputs. US agriculture has experienced significant and sustained productivity growth, with output rising 1.6 percent a year while inputs were stable.
USDA measures the output of crops and livestock and then constructs indexes of input use. Between 1960 and 2004, hired labor inputs rose in eight mostly western states and Florida (by 0.2 percent a year in California), and fell in 42 states, with the sharpest falls in hired labor in southern states such as Louisiana and Mississippi (down over 3.5 percent a year, according to Table 11. www.ers.usda.gov/Data/AgProductivity)
There is significant variation in hired labor inputs in sub-periods. For example, during the 1990s, hired labor input rose by an annual average of over four percent a year in California and Illinois. However, between 2000 and 2004, hired labor input fell by 2.5 percent a year, while rising almost 14 percent a year in West Virginia.
Ag-Gag. Iowa, the leading producer of eggs and pork, enacted a so-called "Ag Gag" bill in March 2012. HF 589 makes it a crime to get a job on a farm or in a food processing plant in order to secretly tape conditions there.
The original version of HF 589 would have made it a crime to take, possess, or share pictures of factory farms that were taken without the owner's consent; the final version makes it a crime punishable by up to two years in prison to provide false statements on "agricultural production" job applications, which is expected to have most job applications add a question asking if the applicant is affiliated with a news organization or animal protection group.
Animal protection groups such as the Humane Society of the United States and Mercy for Animals sometimes send workers to farms and into processing plants to secretly film activities while they work. In 2008, the USDA ordered the recall of 143 million pounds of beef from a California slaughterhouse after videotapes of workers using force to get "downer" cattle on their feet so they could be slaughtered.
At least five states have laws that make it illegal to do the undercover work conducted by several major animal welfare groups. North Dakota, Montana and Kansas enacted Ag Gag laws in 1990-91, and Iowa and Utah did in 2012. Ag-Gag bills are pending in Minnesota, Missouri, Nebraska, New York and Tennessee.
Lipton, Kathryn, William Edmondson, and Alden Manchester. 1998. The Food and Fiber System: Contributing to the U.S. and World Economies. USDA ERS AIC 742. July.