Charts+

There are many storylines in farming and food business and policy, and charts and other materials will be added here periodically to highlight a few of those.

What Do You Mean by "Farmer"?

When you say farmer, what do you mean? Do you mean a person primarily dependent on farming for their household income, or do you mean anyone in a household with farm income? Because there are about twice as many farms (1.96 million farms according to USDA ERS 2020 ARMS estimates) as there are farms of farm types with on average more than half of household income primarily from farming (964 thousand farms). And as attention continues to turn towards the upcoming Farm Bill process with expiration of much of current policy on Sept 30, 2023, the context of certain characteristics of U.S. farms and farmers could have implications on the policy and politics of those negotiations.

First, and most fundamentally, about 97.6 percent of farms in the U.S. are family farms (2020 estimates from USDA ARMS). Family farms range in specialty, size and operational scope, and often dramatically so, but the vast majority of crop, livestock, and other farm products grown and raised in the U.S. are produced by family-run farming operations.

Second, the total number of farms is on a downtrend, over the 2010’s averaging an annual decrease estimated at about 18,000 fewer farms each year. Land in farms has also decreased over time and was at around 895 million acres as of 2021.

Source: USDA Economic Research Service and National Agricultural Statistics Service, Agricultural Resource Management Survey data as of December 1, 2021.

Third, the reliance on household income from farming varies widely by type of farm, what USDA’s Economic Research Service calls Farm Typology. In short, of family farms, only mid-size, large, and very large farms average receiving more than half of their household income from farming activities. These farms generate about 2/3 of the value of production of U.S. agriculture, and make up just 8.5 percent of all farms. In contrast, family farm households of retirement farms, those with off-farm occupations, and farming occupation- lower sales farms, have averaged either negative farm income or a low percent of their household income from farming. These farms make up 84 percent of farms and generate just 11 percent of the value of production. Farming occupation-moderate sales farms are in the middle on reliance on household income from farming, averaging 43% of household income from farming (2011-2020 average).

Source: Vibranteco calculations based on USDA, Economic Research Service and National Agricultural Statistics Service (NASS), Agricultural Resource Management Survey data as of December 16, 2021.

And this wide range not just in farm scale, which has been discussed by others at length, but in a number of other farm characteristics such as the share of household income dependent on farming, the assets held by the farm, and the value of production of various types of farms, leads to some interesting questions.

Start with the baseline that most U.S. farms are family farms, and that the number of farms and area of farmland have generally decreased over time. USDA ARMS estimates also demonstrate that a portion of farm households are heavily reliant on farm income for their household income, and that these farms produce the largest portion of the value of production of U.S. agriculture. Other farm households are less reliant on farm household income or regularly operate at a loss, hold about half of U.S. farm assets, and make up 4 out of 5 farming operations.

Farm policy isn’t one size fits all, and with clear information gathering on what each segment of producers needs and how farm policy can help meet those needs may result in some innovative policy efforts in coming years. A few questions on my mind, for example:

For farms generating the bulk of the value of production, what policies provide risk management and support for the volume and/or value of the U.S. (and global) food supply? Where are their market opportunities to increase profitability and other outcomes desired by these farms? What policies are impediments to them accomplishing their goals?
For the groups of family farms averaging generating negative income, what are the needs of those producers? Do they want to increase production or profitability, or are there other primary motivators on which their decisions are based? What policy options might best meet the needs of these farm types?
If economic, environmental, and social sustainability are goals, what does policy that supports that look like for each of these types of U.S. family farms?
For farm households with a desire to transition from one type of farm household to another (e.g., increase sales category, transition to retirement farm, transition to on-farm occupation, etc.) or to become a farm household (e.g., new and beginning farmers), what are the barriers and opportunities for those transitions?
What are the implications of existing non-farm bill policy on different types farm households, and what are the potential interactions of those policies on farm programs? Are farm policy fine-tunings needed as a result of these interactions?

There’s plenty ahead for policymakers to consider, no doubt, especially if considered with the context of various farm types.
--- 11/22/22