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Published March 27, 2010, 12:00 AM

Despite trends, research shows small farms still vital to U.S. agriculture

WILLMAR — To even the most casual observer, it’s quite obvious that farming has changed a lot over the years. Not only is today’s farm machinery bigger and more efficient, but so is the typical farming operation — whether it be a grain or livestock operation.

By: Wes Nelson, USDA Farm Service Agency, West Central Tribune

WILLMAR — To even the most casual observer, it’s quite obvious that farming has changed a lot over the years. Not only is today’s farm machinery bigger and more efficient, but so is the typical farming operation — whether it be a grain or livestock operation.

Those observations are again confirmed by the data provided in the 2007 Census of Agriculture. But despite the current trends and the difficult challenges that small farms are confronting, three researchers from the U.S. Department of Agriculture recently concluded that small farms are still a vital component and major contributor to our nation’s overall agricultural production.

In their study, Robert A. Hoppe, James M. MacDonald and Penni Korb from USDA’s Economic Research Service examined the differences between small and large farms in the United States. But before we look at the differences they found, we need to clarify what is defined as a small farm.

According to USDA, a small farm is a farming operation with a gross farm income of less than $250,000. Therefore, a small farm can range from retirement or residential farms with little or no agricultural production, to commercially oriented farms with operators that are employed full time.

By this definition, small farms would account for 91 percent of all the farms in the United States, and contribute 23 percent of our nation’s total agricultural production.

Most small-farm production occurs on small commercial farms with gross farm incomes of at least $10,000. However, 60 percent of small farms have gross farm incomes of less than $10,000, and 22 percent have less than $1,000.

The researchers found that U.S. farm numbers and farm production continues to shift to larger farming operations. According to census data, between the years of 1982 and 2007, the number of very large farms grew rapidly, while the number of small commercial farms declined. Also, the share of agricultural sales by very large farms grew substantially, from 27 to 59 percent.

Nevertheless, about 800,000 of the 2.2 million U.S. farms in 2007 were small commercial farming operations. Their total production — $65 billion in 2007 — was greater than the total agricultural production from all farms in the Corn Belt states.

The study also found that small commercial farms have a product mix distinctly different from that of larger farms. Small commercial farms tend to focus on commodities that do not necessarily require a full-time commitment of labor — poultry, beef, hay and grain.

Also, average small-farm financial performance lags well behind that of large farms, suggesting that production will continue to shift to larger operations. However, small farms, particularly very small ones, will likely remain in business because their operators usually have other sources of income and operate a farm for reasons other than profitability.

As expected, small-farm households depend heavily on off-farm income. Because of their off-farm income, median household income for small-farm households is comparable with the median income of all U.S. households.

Age is also likely to be a contributing factor to the continued demise of small farms. The researchers concluded that because larger farms realize higher-than-average financial returns, and because many operators of small commercial farms are over 65 years old, competitive forces will likely continue to reduce the number of small commercial farms and shift production to larger farms.

To see the entire findings of this study, go to www.ers.usda.gov/publications/eib63.

Minnesota’s Feb. milk production up 1.4 percent

According to the Minnesota Agricultural Statistics Service, Minnesota milk production during the month of February totaled 700 million pounds, up 1.4 percent from the 690 million pounds produced in February of 2009.

Minnesota’s production per cow averaged 1,490 pounds in February, up 15 pounds from last February.

The average number of milk cows on Minnesota dairy farms during February was 470,000 head, unchanged from January, but up 2,000 head from one year ago.

Accumulated Minnesota milk production during the first two months of 2010 totaled 1.47 billion pounds, up 1.7 percent from the same period one year ago.

Accumulated milk production in the 23 major dairy states during the first two months of 2010 totaled 28.5 billion pounds, down 0.2 percent from the same period one year ago.

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.

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