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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
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)
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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