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Farming continues to get more efficient

A new federal government study confirms what U.S. farmers have been saying for years: They're increasingly productive, raising more food while using less land and labor.

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A new federal government study confirms what U.S. farmers have been saying for years: They're increasingly productive, raising more food while using less land and labor.

U.S. farm output nearly tripled between 1948 and 2017, growing at an average annual rate of 1.53%, even though agricultural labor fell 76% and land use dropped 25% in the same period, according to the report from the U.S. Department of Agriculture's Economic Research Service.

The productivity increase reflects gains in both "process" and "technology," said Bryon Parman, an agricultural economist with North Dakota State University extension who was asked by Agweek for comment on the ERS report.

Process includes improvements such as no- or limited-till farming, while technology involves such things as improved seed varieties, he said.

The big decline in labor needs an explanation, according to the report.

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It "came partly because of workers seeking higher wages and job opportunities outside the farm sector. Farmers also substituted labor with other inputs, including farm machinery, herbicides and hired services (e.g., ground preparation, spraying, and harvesting)," the report said.

The use of so-called intermediate good — inputs such as ag chemicals and purchased services — rose 130% from 1948 to 2017, according to the report, which was written by Sun Ling Wang, Roberto Mosheim, Richard Nehring and Eric Njuki.

But the contribution of intermediate good to output growth has been small since 1981, making innovations in genetics, chemicals, equipment and farm organization even more important, the report said.

Public sector funding for ag research has slowed in recent years, even holding flat when adjusted for inflation. That's raised concern whether ag productivity gains can continue. Parman said he's optimistic that funding for ag research will continue, especially when that funding can bring economic return.

Though increased productivity speaks well for U.S. agriculture, the increase hasn't translated into better economic returns and greater prosperity for American farmers and ranchers, Parman noted.

The report also mentioned another aspect of ag productivity growth that farmers and ranchers might want to pass on to non-agriculturalists.

"Increased productivity (has) allowed farmers to release both land and labor into other industries, thus supporting growth elsewhere in the economy," the report said.

The new ERS report drew on existing research that analyzed state-by-state productivity growth from 1960 to 2004. The prior study found that Upper Midwest states generally fell in the middle of the pack in productivity gains in that period: The rankings include:

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  • North Dakota, 16th, average annual productivity growth of 1.9%
  • Iowa, 17th, average annual productivity growth of 1.87%.
  • Minnesota, 18th, average annual productivity growth of 1.86%.
  • South Dakota, 35th, average annual productivity growth of 1.51%.
  • Montana, 39th, average annual productivity growth of 1.38%.

Oregon led the nation with average annual productivity growth of 2.58% in that period.
The report didn't specifically address what caused the differences in productivity growth among states.

To read the ERS report: www.ers.usda.gov/amber-waves/2020/july/productivity-is-the-major-driver-of-us-farm-sector-s-economic-growth

Related Topics: AGRICULTURETECHNOLOGY
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