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

Number of farms and distribution of farm, value of production, and acres operated by the farm typology, 2021
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
Large-scale	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

Nonfamily farms are larger than family farms (percent)
	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

Fruits and vegetables and hogs are the commodities most likely to be produced by nonfamily farms (percent of value of production)
	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

Large family farms are most likely to have operating profit margins (percent of farms in group)
	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

Most farms have enough assets to repay their debt (percent of farms in group)
	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

Median operator household income by farm type, 2021 (Thousand dollars)
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 or wealth below the median for all U.S. households, 2021
	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 operator income per household by source and farm type, 2021
Farm type	Mean wealth (dollars)	Mean total income (dollars)	Income from farming		Mean income from off-farm sources (dollars)
Farm type	Mean wealth (dollars)	Mean total income (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.

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