Tuesday, November 2, 2010

Which Commodities are Produced by the Smallest U.S. Commercial Farms?

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Half of U.S. agricultural production from largest 5% of Farms
The largest five percent of farms in the U.S. now account for one-half of the value of U.S. agricultural production. This category includes 105,000 farms which produce gross cash annual returns of $1,000,000 or more. Their share of total U.S. production has grown from just over a fourth (in 1991) to nearly half of all production value (in 2007). During the same time period, the small commercial farm (10k-250k gross income) share of production decreased from 41% to 22%.

60% of small commercial farms had negative operating profits
Nearly 60 percent of small commercial farms had negative operating profits in both 1991 and 2007. Substantially smaller shares of large (23 percent in 2007) and very large farms (about 15 percent) had negative operating profits—and those shares declined between 1991 and 2007—reflecting economies of size in farming and the ability to take advantage of technological advances.

Small commercial farms devote less time to farming
Small commercial farms produce commodities that reflect their reliance on off-farm income. Poultry, cash grains/soybeans, and beef—commodities that can be produced on a part-time basis—make up three-fourths of the production of small commercial farms. In contrast, dairy and high-value crops, such as vegetables, fruits and tree nuts, and nursery and greenhouse products, require a larger commitment of full-time labor. These farm products account for 12 percent of production of small commercial farms but 44 percent of very large farms.

Small commercial farms share of commodity production
Small commercial farms accounted for a considerable share of production for some commodities: 55 percent of poultry, 40 percent of hay, 37 percent of other livestock (largely grazing animals other than cattle), and 30 percent of tobacco, a crop with a long history of production on small farms. In addition, small farms’ share of beef production—largely from cow/calf or stocker enterprises—and grain and soybean production was similar to their 22-percent share of all production.

Bar chart: Small commercial farms produce substantial shares of some commodities

source: usda