| The 2007 Ag Census came out this week. I wrote up some info about American farms through history yesterday. In this diary, I am going to focus on the largest group of farms - 2000 or more acres.
These farms made up 3.6% of all American farms in 2007 - a slight decline since they peaked at 3.7% in 2002. In 1964, they made up 1.9% of all farms and that percent has gone up throughout history until 2002.
In absolute numbers, there has been a constant increase in farms of this size since 1964 (when there were 60,293 of them), increasing to 80,393 in 2007. In fact, despite their decrease as a percent of all farms in the last 5 years, the absolute number of farms with 2000 or more acres has increased by 2423 farms.
These farms may make up only 3.6% of all farms, but their sales represent 27% of sales by all farms of any size and their land makes up over half of all farm acres in the U.S. And these farms are totally on the government take. Nearly 1/3 of all government money that goes to farms goes to farms over 2000 acres.
In short - the number of these large farms has grown consistently throughout history and does not show a sign of stopping. These farms are profiting. Only a very small percent are struggling financially, and while about 12% of these farms are retired or have a principle occupation other than farming, the remainder are farmers by occupation and financially successful to boot.
So who are these farmers, and what's happening on their farms?
|The average size of the 80,393 farms of 2000+ acres is 6181 acres (nearly 10 square miles). The average farm had $1,018,153 in sales but $759,395 in production expenses. The average net income was $288,521. 77.2% of these farms reported net gains in 2007 (compare that with 47% of all farms of any size that reported net gains). Not so surprisingly, 86.2% of them reported that their principle occupation is farming. 0.7% of these farms were organic.
So how do the sales break down among these farms?
Sales on Farms with 2000+ Acres
(As a Percent of All Farms with 2000+ Acres)
As you can see here, the median sales were in the range of $250k-$499,999. Only 7.6% of these farms made under $25k, and only 12.2% of them made under $50k. On the other hand, over a quarter (25.7%) of these farms made more than $1 million in sales, and nearly half (44.8%) made more than $500k in sales.
More information can be gained by seeing how these farms break down into categories:
Retirement Farms: 5.1%
Retirement farms have market value of
agricultural products sold of less than $250,000,
and a principal operator who reports being
Residential/Lifestyle Farms: 6.9%
Residential/lifestyle farms have market value of agricultural products sold of less than $250,000, and a principal operator who reports his/her primary occupation as other than farming.
The sum of the 2 above categories is 12%, meaning that just over 12% of farmers on farms of 2000+ acres are either retired, or have a principle occupation other than farming AND sold less than $250k in agricultural products.
Limited Resource Farms: 2.1%
Limited-resource farms have market value of agricultural products sold gross sales of less than $100,000, and total principal operator household income of less than $20,000.
Farming occupation - lower sales: 8.4%
Farming occupation/lower-sales farms have market value of agricultural products sold of less than $100,000, and a principal operator who reports farming as his/her primary occupation.
If you look at the two above categories, you can see that 10.3% of farmers on farms 2000+ acres fall into these categories that sold less than $100k in agricultural products. Fortunately for them, about 8 in 10 farmers are classed as "Farming Occupation - Higher Sales," meaning they have a household income above $20k.
Farming occupation - higher sales: 13.2%
Farming occupation/higher-sales farms have market value of agricultural products sold of between $100,000 and $249,999, and a principal
operator who reports farming as his/her primary
Large Family Farms: 15.7%
Large family farms have market value of agricultural products sold between $250,000 and $499,999.
12,657 farms were considered large family farms. 13,861 farms made between $250k and $499,999 in sales. Most likely the 1200 farms with this much in sales that aren't counted as family farms are classed as non-family farms.
Very Large Family Farms: 38.2%
Very large family farms have market value of agricultural products sold of $500,000 or more.
By far the most popular category for farms of this size. 30689 farms were considered very large family farms. 36021 farms of this size made over $500k in sales. Most likely the approximately 5300 farms that made this much in sales but aren't categorized as very large family farms are counted as non-family farms.
Non-Family Farms: 10.3%
Nonfamily farms are farms organized as nonfamily corporations, as well as farms operated by hired managers.
Based on the numbers above, we can tell that about 1200 of these farms made between $250k-$499,999 and 5300 made over $500k in sales (approximately). There were a total of 8299 non-family farms, so presumably 6500 of them (nearly 80%) made over $250k in sales. In fact, the 5300 who made over $500k constitutes nearly 2/3 of these non-family farms.
These farms were totally on the government take in 2007. Nearly 3/4 (72.8%) of farms over 2000 acres received government cash, compared to 38% of farms who received government money overall. The average farm over 2000 acres who received money got $43,981.35, compared to the average payout of only $9522.91 to farms of any size.
All in all, these farms made up 7.0% of all farms receiving government money. They received almost 1/3 (32.2%) of the money the government paid to farms in 2007. Think about that - they make up 3.6 of all farms but receive 32.2% of the cash.
Direct Sales to Consumers
6.2% of all farms sold directly to consumers in 2007, but only 2.1% of farms over 2000 acres did so. In other words, a farm smaller than 2000 acres is 3 times as likely to sell directly to consumers than a farm over 2000 acres.
These farms made up only 1.2% of all farms who sold directly to consumers, but their direct sales in dollars made up 4.1% of all direct sales. The average amount that a farm over 2000 acres made in direct sales was $29,855.67. This is far larger than the average amount farms in general made in direct sales ($8853.21) - i.e. number of farms who engaged in direct sales divided by amount of dollars in direct sales all farms made.
To put that in more clear terms, if a farm over 2000 acres was engaging in direct sales, on average they would make about $30k in sales - which is peanuts to one of these farms considering that the average amount a farm of this size made in sales was over $1 million. In other words, for most of these guys, if they do engage in direct sales to consumers, it's probably not a huge part of their business.