Family farms continue to lead agriculture

 WASHINGTON – Family farms remain the primary source of food production in the United States, according to a report by U.S. Department of Agriculture’s Economic Research Service.

“We find that 98% of U.S. farms are family farms and they account for 87% of farm production. This has remained largely unchanged when compared with 2011 data,” said Christine Whitt, who co-authored America’s Diverse Family Farms report with Jessica Todd and Andrew Keller.

Data for this report is from the 2020 Agricultural Resource Management Survey conducted by ERS and the National Agricultural Statistics Service.

“The 2021 edition of this report describes characteristics of the 2 million U.S. farms in 2020. Specifically, the report examines what farms produce, how much they profit and their participation in federal agricultural programs. The report also looks more closely at farm household well-being,” Whitt said.

USDA defines a farm as any place that, during a given year, produced and sold-or normally would have produced and sold-at least $1,000 of agricultural products.

Farm size is measured by gross cash farm income, a measure of the farm’s revenue that includes sales of crops and livestock, government payments, and other farm-related income, including fees from production contracts.

Here are the report’s findings:

Small Family Farms
GCFI less than $350,000

• Retirement farms: Small farms whose principal operators report having retired from farming, though continuing to farm on a small scale-219,288 farms, 10.9% of U.S. farms in 2020.

• Off-farm-occupation farms: Small farms whose principal operators report a primary occupation other than farming-779,767 farms, 38.8% of U.S. farms.

• Farming-occupation farms: Small farms whose principal operators report farming as their primary occupation. Farming occupation farms are further sorted into two classes: low sales, farms with GCFI less than $150,000-683,514, 34% of U.S. farms; and moderate sales, farms with GCFI between $150,000 and $349,999-110,865 farms, 5.5% of U.S. farms.

Midsize Family Farms

• Family farms with GCFI between $350,000 and $999,999-112,122 farms, 5.6% of U.S. farms.

Large-Scale Family Farms

• Large family farms, farms with GCFI between $1,000,000 and $4,999,999-51,708 farms, 2.6% of U.S. farms.

• Very large family farms, farms with GCFI of $5,000,000 or more-6,124 farms, 0.3% of U.S. farms.

Non-Family Farms

• Any farm where an operator and persons related to the operator do not own a majority of the business-47,275 farms, 2.4% of U.S. farms.

Farms, Production, Farmland

• Approximately 89% of all farms were small family farms. Compared with 2011-the earliest year using the current farm typology-the share of land operated by small family farms fell from 52% to 48% and the share of the value of production on small family farms declined from 26% to 20%.

• Large-scale family farms accounted for 46% of the total value of production in 2020, an increase from 35% in 2011. These farms also accounted for an increased share of total land operated, up from 16% in 2011 to 24% in 2020.

• In total, family farms accounted for about 98% of total farms and 87% of total production in 2020.

• Non-family farms accounted for the remaining 2% of farms and 13% of production. Among non-family farms, 18% had a GCFI of $1 million or more. Such farms accounted for 90% of non-family farms’ production. Examples of non-family farms include partnerships of unrelated partners, closely held non-family corporations, farms with a hired operator unrelated to the owners and publicly held corporations.

Farm Operating Expense

• A large share of total expenses on field crop farms went toward fertilizers and other chemicals, 26%, in 2020, which was slightly less than the share spent in 2011, 27%. Spending on seed and plants accounted for another 14% of expenses on field crop operations in 2020, which was slightly more than in 2011, 13%.

• Feed expenses made up 48% of all expenses on dairy operations, 19% on cattle operations and 29% on other livestock operations in 2020. The share of expenses allocated to feed on dairy and other livestock operations was similar in 2011. Livestock purchases accounted for a greater share of all expenses on beef cattle operations than did feed at 28% in 2020.

Pandemic And Direct Sales

• Direct sales amounted to almost $10.7 billion-a nearly $2.8 billion, 35%, increase from the value reported in the 2019 survey. Only 27% of total direct sales were direct-to-consumer, whereas the remaining 73% occurred through intermediary supply chains. Among farms with less than $75,000 in GCFI, 85% of all direct sales were DTC in 2020.

• Changes in direct sales varied across farm-size categories. Farms with less than $75,000 in GCFI had $2.5 million less in overall direct sales in 2020 than in 2019. These smaller farms accounted for 8% of all the direct sales in 2020, down from 10% in 2019. Farms with direct sales and a GCFI between $75,000 and $350,000 increased their direct sales by $0.4 billion-which accounted for 11% of all direct sales-whereas farms with direct sales and a GCFI greater than $350,000 increased their direct sales by $2.4 billion, which accounted for 81% of all direct sales.

• The overall increase in direct sales in 2020 occurred across most direct sales marketing channels. Sales at farmers markets and restaurants increased by 11% and 13%, respectively, whereas sales at farm stores, CSAs and other DTC channels, as well as sales to regional distributors, increased by 79% and 73%, respectively. However, sales to institutions declined by 86% in 2020 relative to 2019, which was likely due to pandemic closures or restricted operations.

Government Payments, Federal Crop Insurance

• Small family farms received 81% of all payments for USDA’s Conservation Reserve Program. Environmental Quality Incentives Program and Conservation Stewardship Program payments were more likely received by midsize, large-scale and non-family farms with 68% receiving payments in those categories overall.

• Midsized and large-scale family farms along with non-family farms accounted for 80% of the total value of production and received 78% of commodity-linked, agricultural disaster programs and other federal, state and local farm program payments.

• Small family farms received 16% of all farm-level pandemic assistance from USDA and 22% of all other government payments-excluding pandemic assistance and conservation program payments-which was consistent with the smaller production scale. Large-scale family farms received 52% of all farm-level pandemic assistance and 44% of all other payments.

• Additionally, 64% of all farm-level pandemic assistance reported as having been received from the Coronavirus Food Assistance Programs-programs one and two-in 2020. Another 21% came from loans from the Small Business Administration under the Paycheck Protection Program and advances from the Economic Injury Disaster Loan program.

• Overall, 40% of all farms reported as having received some type of government payments in 2020.

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