The number of large crop farms is increasing while the number of mid-sized farms is dwindling, a new USDA Economic Research Service report confirms.
The size-shifts are part of a complex set of factors that influence structural changes in crop agriculture – such as technological advances, financial performance, rates of return on commodities, and utilization of labor and capital.
Authors note that at the outset, it doesn't appear farm sizes are really shifting because smaller farms are growing in popularity also, off-setting the lost mid-size farms. On the average, USDA said, the mid-point acreage (the point at which half of all farms have more acreage and half have fewer acres) is at 1,105, according to the most recent data in 2007. That's compared to 589 in 1982 – illustrating a sizeable shift in the number of acres of each individual farm.
USDA said greater specialization has accompanied farm-size shifts, beginning with the separation of livestock and crop farming. By devoting more time to crop farming and less time to livestock, producers were able to take on more land, thus raising the size of their farms.
As noted previously, labor-saving innovations – such as faster machinery, adoption of no-till, seed genetics and effective herbicides – have also contributed to larger farms. For example, the report notes that farms harvesting 2,000 acres use less than half as much labor per acre as farms harvesting fewer than 500 acres.
Families continue to farm
As for family ownership and participation, the report notes that even as farms – defined as any owned land plus any rented and managed land – have gotten larger, 96% remain family-owned. Those farms account for 87% of the total value of crop production.
And, USDA said there is no evidence of any decline in the number of family-owned operations. They estimate that 86% of farms with more than 10,000 acres are family-owned.
However, factors that are currently considered catalysts for the growing number of larger farms could become future challenges for large family farms.
Automated precision technology, for example, erodes managerial responsibility, allowing for more reliance on hired workers, the report argues. Fluctuating commodity prices, too, have resulted in greater risks and potential exploration of more complicated farm ownership structures to offset that risk.
Authors point out that while these factors could eventually lead to more non-family operations, such organizations remain rare in the U.S. Family farms will continue to dominate crop agriculture, the report said, as long as they are able to limit and manage financial risks associated with large, capital-intensive businesses.
Read more: Farm Size and the Organization of U.S. Crop Farming