Family farms still dominate US ag, report says

An updated annual report from the federal government reconfirms what most people involved in agriculture already knew: Family farms nationwide are diverse, and remain the backbone of U.S. agriculture.

Family farms overall accounted for 98% of farms and 86% of production in 2019, according to "America's Diverse Family Farms - 2020 Edition" from the U.S. Department of Agriculture's Economic Reserve Service, or ERS.

The report also reconfirmed that family farms come in many shapes and sizes. They range from small "retirement" farms, where the principal operator has retired from farming but continues to farm on a small scale, to "very large" operations with annual gross cash farm sales of more than $5 million.

The report is a snapshot of conditions in 2019 and doesn't reflect changes, including ones related to the coronavirus pandemic, that occurred in 2020, said Johnathan Hladik, policy director of the Lyons, Neb.-based Center for Rural Affairs, which describes its mission as "stand(ing) up for the small family farmer and rancher, new business owner, and rural communities. " He was asked by Agweek to comment on the new ERS report.

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The report doesn't reflect the greater desire by some Americans to buy food directly from farmers, one consequence of the pandemic. That can help small family farms win additional direct-to-consumer sales, Hladik said.

U.S. farms had too few such sales in 2019, he said.

"Only 9% of all operations sell commodities either directly to consumers or directly to an intermediary who sells to a consumer. That 9% is a pretty low number, especially for livestock. I'm wondering if that's going to change" as a result of the pandemic, Hladik said.

As is often the case in agriculture, averages in farm size can be misleading. For example, the average value of production of the 2 million U.S. farms in 2019 came to $168,218. But that's heavily influenced by farms that are much bigger or smaller than average. Nearly half of the farms had ag production valued at $6,000 or less, while more than 60% of all production occurred on farms with at least $1 million in ag output.

And treat the "farm" designation cautiously. USDA defines a farm as anyplace that produced and sold — or normally would have produced and sold — at least $1,000 of ag products, a modest hurdle, to say the least.

A nonfamily farm — the U.S. had 47,451 of them, or 2.4% of all U.S. farms in 2019 — is defined as a farm where the principal operator and people related to the principal operator don't own a majority of the business.

For purposes of the report, USDA's ERS divided family farms into these categories:

• Small family farms, gross cash farm income of less than $350,000.
• Midsize family farms, gross cash farm income between $350,000 and $999,999.
• Large-scale family farms, gross cash farm income of $1 million or more.
• Very large-scale family farms, gross cash farm income of $5 million or more.

As many people involved in agriculture would expect, the different categories generally account for different commodities. A few examples: Large-scale family farms account for more than two-thirds of dairy production. Small farms generally have cow-calf operations while large-scale farms are more likely to operate feedlots. Small farms produce 45% of U.S. poultry and egg output.

As was the case in the past, the 2020 report finds that most small farms are at higher risk of financial problems. But as the report noted, many small farm operators don't consider farming to be their primary occupation and receive substantial income from off-farm sources.

Hladik said he was struck by the report's finding that "the number of small farmers and small family farmers that need to get their income from off the farm — over 41 % — and that is a really big number."

To read the report: https://www.ers.usda.gov/webdocs/publications/100012/eib-220.pdf?v=3021 .