US Farms in 2021
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January 26, 2023
The US has two million farms that generated over $400 billion in sales in 2021, an average of about $200,000. However, averages in agriculture are misleading because over half of US farms had sales of less than $8,000, while the 70,000 farms that each had sales of $1 million or more accounted for 70 percent of US farm production.
USDA defines a farm as a place that sells at least $1,000 worth of farm commodities a year, and includes in gross cash farm income the value of government payments.
90% of US farms are part-time or hobby operations that generate 18% of farm sales
Farm type | Number of farms | Percentage of farms | Percentage of acres operated | Percentage of value of production | |
---|---|---|---|---|---|
Small | Retirement | 227,795 | 11.4 | 4.8 | 1.0 |
Off-farm | 760,224 | 37.9 | 13.5 | 4.7 | |
Low sales | 697,438 | 34.8 | 16.7 | 4.5 | |
Moderate sales | 99,079 | 4.9 | 10.2 | 7.6 | |
Midsize | Midsize | 113,005 | 5.6 | 17.8 | 18.4 |
Large-scale | Large | 57,155 | 2.9 | 16.3 | 27.8 |
Very large | 5,998 | 0.3 | 10.6 | 18.7 | |
Nonfamily | Nonfamily | 43,058 | 2.1 | 10.1 | 17.3 |
Total | 2,003,754 | ||||
Notes: Land operated is equal to (owned land + leased land) - (leased land to others). The total acres operated were 875.8 million, and the total value of production was $407.5 billion in 2021. Due to rounding, percentages may not add up to 100. |
USDA distinguishes between family and nonfamily farms, defining nonfamily farms as partnerships of unrelated partners, nonfamily corporations, and farms with a hired manager unrelated to the owners. Nonfamily farms are two percent of US farms, but they accounted for 17 percent of US farm sales in 2021.
Nonfamily farms are larger than family farms
Percentage of farms | Percentage of agricultural land | Percentage of value of production | |
---|---|---|---|
Nonfamily farms | 2 | 10 | 17 |
Large-scale family farms | 3 | 27 | 46 |
Midsize family farms | 6 | 18 | 18 |
Small family farms | 89 | 45 | 18 |
Large-scale family-owned farms produced three fourths of the cotton and 70 percent of the dairy commodities in 2021; many of these farms hired workers.
Specialty crop farms producing fruits and vegetables are most likely to be nonfamily farms. In 2021, nonfamily farms produced 43 percent of specialty crops, more than were produced by large family farms.
Fruits and vegetables and hogs are the commodities most likely to be produced by nonfamily farms
Poultry and eggs | Hay | Beef | Hogs | Cash grains and soybeans | Cotton | Dairy | Specialty crops | |
---|---|---|---|---|---|---|---|---|
Nonfamily farms | 5 | 13 | 16 | 35 | 8 | 7 | 18 | 43 |
Large-scale family farms | 18 | 20 | 46 | 35 | 51 | 73 | 69 | 39 |
Midsize family farms | 30 | 14 | 11 | 17 | 26 | 16 | 8 | 10 |
Small family farms | 47 | 53 | 26 | 13 | 15 | 4 | 5 | 8 |
People farm for many reasons, from enjoying outdoor work or interactions with animals to aiming for profits from farm production and land price appreciation. USDA’s measure of operating profit margins from current production show that most farms can expect low profit margins of less than 10 percent despite the risks inherent in producing often perishable commodities.
Large family farms are most likely to have operating profit margins
Small family farms | Large-scale family farms | ||||||||
---|---|---|---|---|---|---|---|---|---|
Retirement | Off-farm occupation | Low sales | Moderate sales | Midsize family farms | Large | Very Large | Nonfamily farms | All farms | |
Ration not calculated | 7 | 5 | 4 | - | - | - | - | 2 | 4 |
Low-risk level (OPM > 25 percent) | 19 | 12 | 10 | 31 | 46 | 54 | 40 | 30 | 17 |
Medium-risk level (OPM 10-25 percent) | 5 | 7 | 5 | 18 | 20 | 20 | 32 | 13 | 8 |
High-risk level (OPM < 10 percent) | 69 | 77 | 81 | 50 | 33 | 25 | 29 | 53 | 71 |
Despite low profit margins, most farms have enough assets to repay their debt. One reason is that many smaller farms have owners who fully own their land.
Most farms have enough assets to repay their debt
Small family farms | Large-scale family farms | ||||||||
---|---|---|---|---|---|---|---|---|---|
Retirement | Off-farm occupation | Low sales | Moderate sales | Midsize family farms | Lage | Very large | Nonfamily farms | All farms | |
Current ratio not calculated | 1 | 1 | 2 | - | - | - | - | 1 | 1 |
Current ratio greater than or equal to 1 | 47 | 52 | 57 | 75 | 76 | 75 | 76 | 61 | 57 |
Current ratio less than 1 | 52 | 47 | 41 | 25 | 23 | 25 | 24 | 37 | 42 |
The median income of farm households, $92,000 in 2021, is higher than the median income of nonfarm households, $71,000. The median income of very large family farms exceeded $1 million, and farm households also have more wealth than nonfarm households.
Farm households have higher incomes than nonfarm households
Small family farms | Large-scale farmily farms | ||||||
---|---|---|---|---|---|---|---|
Retirement | Off-farm occupation | Low sales | Moderate sales | Midsize family farms | Large | Very large | All farms |
63.9 | 114.2 | 62.6 | 125.6 | 210.7 | 464.9 | 1,144.2 | 92.2 |
Almost all farm households had more wealth than nonfarm households
Farm households with... | ||
---|---|---|
Income below U.S. median ($70,784) | Wealth below U.S. median ($132,037) | |
Percent of farm households | ||
Small family farms | ||
Retirement | 56.2 | 2.3 |
Off-farm occupation | 24.0 | 1.8 |
Low sales | 53.9 | 2.4 |
Moderate sales | 25.9 | 3.4 |
Midsize family farms | 16.9 | 4.1 |
Large-scale family farms | ||
Large | 12.1 | 3.4 |
Very large | 7.9 | 2.5 |
All family farms | 37.7 | 2.4 |
Notes: Farm households are the households of the principal operator on family farms. Operator household income and wealth are not estimated for nonfamily farms. Wealth is the value of household assets minus household debt. Given that net income is a calendar year flow, all income and expenses are included when they occur from January 1 to December 31. U.S. median wealth was adjusted to 2021 dollars using the Gross Domestic Product chain-type price index. |
Half of all family farms lost money farming
Farm type | Mean wealth (dollars) | Mean total income (dollars) | Income from farming | Mean income from off-farm sources (dollars) | |||
---|---|---|---|---|---|---|---|
Mean (dollars) | Percent of households with negative income | Total | Earned | Unearned | |||
Small family farms | |||||||
Retirement | 1,814,986 | 74,877 | 5,052 | 45 | 69,825 | 25,942 | 43,883 |
Off-farm occupation | 1,781,636 | 141,761 | -315 | 57 | 142,075 | 110,261 | 31,814 |
Low sales | 1,651,265 | 83,584 | -334 | 56 | 83,917 | 41,869 | 42,048 |
Moderate sales | 2,792,306 | 128,255 | 62,354 | 17 | 65,901 | 35,599 | 30,302 |
Midsize family farms | 3,975,636 | 239,971 | 152,442 | 14 | 87,529 | 58,790 | 28,740 |
Large-scale family farms | |||||||
Large | 6,692,775 | 556,974 | 461,413 | 11 | 95,561 | 63,160 | 32,401 |
Very large | 15,201,685 | 1,744,401 | 1,662,892 | 7 | 81,508 | 49,113 | 32,395 |
All family farms | 2,100,879 | 135,281 | 30,821 | 48 | 104,460 | 67,838 | 36,622 |
Notes: Operator household income is not estimated for nonfamily farms. Off-farm income may come from both earned and unearned sources. Earned income comes from off-farm, self-employment or wage/salary jobs. Unearned income includes interest and dividends, benefits from Social Security and other public pensions, alimony, annuities, net income of estates or trusts, private pensions, etc. Components may not sum to 100 percent due to rounding. |
References
Whitt, Christine, Noah Miller, and Ryan Olver 2022. America’s Farms and Ranches at a Glance.