U.S. farming is still primarily a family business. The USDA’s Economic Research Service released a report titled “America’s Farms and Ranches at a Glance: 2023 Edition.”
Katherine Lacy, an ERS economist and co-author of the report, says the overwhelming majority of U.S. farms are still family operations. Lacy says, “A majority of farms are considered small family farms, but these farms only count for 19 percent of the value of production. On the other hand, three percent of farms are large scale family farms accounting for 25 percent of agricultural land operated and 52 percent of the value of production.”
Small family farms made up 88 percent of the total farm count. Overall, the study found that 97 percent of all U.S. farms were family farms that accounted for 90 percent of farm production in 2022. She talks about commodity specialization; “We can see large-scale family farms dominate the production of most commodities, including beef, hogs, cash grains and soybeans, cotton, dairy, and specialty crops. In the remaining two commodities, poultry, eggs, and hay, small family farms and midsize family farms dominate the production. The value of production for non-family farms was less than 20 percent for all commodities. If you compare this report to last year’s edition, you will notice the value of hog production and specialty crop production increased for large-scale family farms and decreased for non-family farms. However, the value of production shares in 2022 was similar to the shares seen in 2019 and 2020.”
Lacy talks about the financial health and risks of America’s farms by saying, “Most small family farms have an operating profit margin in the high-risk zone. Generally, we see the share of farms in the high-risk zone decrease as farm size increases. A majority of midsize and large-scale family farms are in the medium-risk zone or a low-risk zone. Finally, in terms of financial risk, non-family farms are more similar to small family farms than large scale family farms.”
About 20 percent of all U.S. farms held any debt in 2022, and 67 percent of farms carrying debt used one lender. ERS also looked at farm income.
Lacy says, “In general, farm households are not considered low income, only retirement farms and low-sales farms had median income below U.S. household median income. Median Farm Household Income greatly increases as farm size increases, with very large farms having a median household income of approximately 1.4 million dollars.”