Monday, September 6, 2010

The U.S.'s Multi-Million Dollar Industrial Farms

photo
Texas Panhandle Feedlot


To follow, is my Part V of the USDA report breaking down farms and their production by size. This one focuses on farms having sales greater than a million dollars a year, and greater than five million dollars a year.

"Million-dollar farms make up about 2 percent of all U.S. farms, but they account for 53 percent of the value of production."
--Kalpa


Million Dollar Farms Summarized

Thirty-seven percent of very large family farms and 13 percent of nonfamily farms are “million-dollar farms” with annual sales of $1 million or more. There are only 47,600 million-dollar farms—2 percent of all U.S. farms—but they account for 53 percent of production. They dominate the production of five major farm products: high-value crops (vegetables, fruits and tree nuts, and nursery and greenhouse products), hogs, dairy, poultry, and beef. The largest million-dollar farms—those with sales of at least $5 million—by themselves account for 35 to 45 percent of the production for beef cattle (largely in feedlots), high-value crops, and milk.



Further Breakdowns of Million Dollar Farms

Approximately 47,600 U.S. farms have annual sales of $1 million or more. Most million-dollar farms have annual sales between $1 million and $4,999,999, but 11 percent—5,200 farms—sell at least $5 million.

A large majority of million-dollar farms (86 percent) are family farms. Family farms account for a smaller share (64 percent) of farms with annual sales over $5 million.

Million-dollar farms make up about 2 percent of all U.S. farms, but they account for 53 percent of the value of production. They also produce approximately 60 to 70 percent of high-value crops, hogs, dairy, poultry, and beef. The largest million-dollar farms—those with sales of at least $5 million—account for 35 to 45 percent of beef (largely in feedlots), milk, and high-value crops. Seventy-one percent of farms with more than $5 million in sales specialize in beef (largely in feedlots), high-value crops, or dairy. The prevalence of these specializations among $5 million farms suggests economies of scale persist in the production of high-value crops, finished beef cattle, and milk, even when annual sales pass $5 million.

Consider dairy production, for example. Costs of production fall rapidly with herd size. Total costs per hundredweight for farms with 1,000 or more cows—which includes $5 million dairies—are less than half those for farms with fewer than 50 cows. The biggest cost advantages for large dairies are in overhead costs, since these operations can use capital and labor more intensively.

Agricultural production is concentrated in the Heartland and Fruitful Rim, which together account for 46 percent of U.S. production. The Heartland and Fruitful Rim account for the largest shares of the Nation’s million-dollar farms, 25 and 21 percent, respectively.



source: usda [pdf]

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