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Study highlights beginning farmers

With the average age of U.S. farmers approaching 60 years old, attracting more beginning farmers is a priority for U.S. agriculture. A new study from the U.S. Department of Agriculture offers a big-picture look at the beginning farmers in place now.

Few of the conclusions in "An Overview of Beginning Farmers and Ranchers," written by Nigel Key and Greg Lyons of USDA's Economic Research Service, are likely to surprise anyone familiar with U.S. agriculture, especially Upper Midwest ag. Beginning farmers are defined as operators with no more than 10 years of farming experience.

Among the findings for beginning farmers:

• They operate on a smaller scale, earn less farm income and have more debt relative to assets than established farms.

• They work more off the farm.

• They have less wealth.

• Though most of their operations are small, their production is concentrated on large-scale farms. Only 2% of beginning farms have annual output of $1 million or more, but they account for more than half of all output from beginning farms.

The study is based on 2013-17 Agricultural Resource Management surveys and covers 339,400 farm operations, or 17% of all farm operations in that period. The study excludes nonfamily farm operations, which account for only about 2% of total U.S. farm operations.

Two key measures of how small beginning farm operations tend to be: Roughly two-thirds of all the beginning farmers had less than $10,000 in annual production, and only 18% of beginning farmers reported farming as their primary occupation.

As might be expected, beginning farmers are more likely to hold off-farm jobs than established producers — 67% of beginning farmers held off-farm jobs; 45% of established producers did so.

As for age, principal operators of beginning farms average 43 years, compared to 63 years for operators of established farmers. And 30% of beginning farmers are less than 35 years old; only 2% of established farmers are less than 35.

At the other end, 10% of beginning farmers are 65 or older, while 36% of established operators are at least 65.

There are important differences in net wealth and debt, too. Of all farm operators with at least $10,000 in annual output, beginning farmers had average net worth of $1.2 million, compared to $2.2 million for established farms. Also, beginning farms with debt have a debt-to-asset ratio of 29% vs.18% for established farms with debt.

The report also found that beginning farmers receive less financial help than established producers through federal farm programs. A third of beginning farmers received such help, compared with 41% of established producers. The report notes that smaller farms on average receive fewer federal payments, so the relatively small scale of beginning farms cuts into the financial help they receive.

The Economic Research Service says its mission is to "anticipate trends and emerging issues in agriculture, food, the environment, and rural America and to conduct high-quality, objective economic research to inform and enhance public and private decision making."

To read the report:

https://www.ers.usda.gov/webdocs/publications/95010/eb-29.pdf?v=8829.1