Knowing how agriculture operates in the United States can give you a greater idea of the importance of family farms in the world’s food production and the country’s financial standing.
Billions of people worldwide rely on small family farms to make their daily food — but they might not even know it. Family farms of all sizes are key to producing food, high-value crops, and items that people use daily.
Understanding family farm statistics can provide property owners and farmers with key information regarding the potential success of their lifestyle and industry.
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Top 10 Family Farm Statistics:
- Nearly 50% of farms are land-operated
- Most family farms are below-average income
- The number of family farms has increased in the last decade
- Mid-sized and large-sized family farms turn a profit
- Small-scale family farms lose money
- Covid-19 showed a decline in local sales
- Marketing channels are imperative for a farm’s success
- Small farms produce ⅓ of the food globally
- Large farms control the most land
- New England states have the highest number of family farms
Family Farm Statistics
Let’s check out the most relevant family farm statistics to show how this industry operates within the U.S. and globally.
Small family farms are much more common than other sizes
Small family farms are the most prevalent size in the U.S. Small farms make up nearly 90% of the number of farms in the country. In contrast, mid-sized family farms make up 5.5%, large-scale family farms make up 2.7%, and non-family farms comprise 2.1% of the distribution of farms by farm type.
Almost half of the farms are land operated
Nearly half of the farms in the United States are small-sized family farms that are land operated. 47.7% of farms are small-sized and land operated, whereas 21% are mid-sized, 19.6% are large-scale family farms, and 11.7% are non-family land-operated farms.
Family farms are crucial to the U.S. Agriculture
Family farms comprise almost 99% of all farms in the United States.
The type of products produced by farms vary
Family farms vary based on the product type. Most small family farms produce mainly poultry, such as chicken, eggs, and hay. Mid-sized farms typically produce cotton and grains, whereas large-scale family farms produce oilseeds, cash grains, and dairy. Larger farms also produce most high-value crops, such as fruits, vegetables, and nursery (plant) products.
Most family farms are below the average income level
There is a misconception that family farms are below the median income level in the United States. However, only retirement family farms and low-sale farms usually operate below the median income for a U.S. household.
Family farms work in tandem with off-farm occupations
Family farms work together with off-farm businesses to help their productivity. Furthermore, some farm owners work in a separate business to supplement their income, which typically is not recorded in the net profit for the farm-specific finances.
Family farms have grown in size since 2011
The number of family farms increased by 1% since 2011, with the latest data showing 98% of farms were family operated in 2020 compared to 97% in 2011.
Most small family farms have a small GFCI
GFCI, which stands for gross cash farming income, is typically below $350K per year for around 90% of farms in the United States — since they are all small-sized family farms and not large agricultural producers.
Large-scale family farms increased in popularity
The number of large-scale family farms increased in the amount of land operated in previous years, growing by nearly 25% from 2011 to 2020. Large farms qualify as farms that make more than $! Million in profit.
Some family farms lose money farming
Although farming can be profitable and produce a high gross income, some family farms still lose money farming. 42% of farms in 2020 lose money and do not make a profit.
Mid-sized family farms earn a profit
If you want to make a profit as a farmer, consider operating a mid-size family farm to guarantee a profit. 83% of mid-sized family farms earn a profit, compared to small-sized family farms that lose money.
Large-scale family farms earn a profit
Similarly, 88% of large-scale family farms earn a profit in 2020, which shows a 3% increase in the last ten years.
Financial problems are prevalent
Since small-sized family farms operate with a lower profit margin (less than 10%), this indicates a greater risk of financial issues. Family farms should operate with a profit margin of >25% for reduced financial risk.
Small farms receive most of their income elsewhere
Most small family farms make the majority of their income through off-farm resources that do not contribute to the farm-specific profit margin.
Marketing has changed the way family farms operate
Marketing And the Covid-19 pandemic have changed how family farms operate worldwide. Most farms that use direct marketing channels saw an increase in sales compared to 2019 (35% increase). The largest provider of direct sales in 2020 were restaurants and grocery stores.
Decline in local sales
Despite the number of sales increasing for most farms through marketing channels, there was a decline in local sales due to the need for more connection between communities (Covid-19 pandemic). Most family farms experienced declining profit or sales to restaurants, distributors, and farmer’s markets.
More farms distributed to stores
Since the Covid-19 pandemic saw family farms unable to interact with their community as they had in previous years, the farms experienced an increase in sales to farm shops, grocery stores, and community-supported agriculture arrangements.
Small farms produce ⅓ of the world’s food
Small family farmers around the world produce nearly 1⁄3 of the world’s food. Although 5 out of 6 farms in the world have less than two acres, these small farms still produce almost 35% of the food production throughout the world.
China is responsible for 80% of the country’s food
Small family farms in China supply as much as 80% of the food production within the country. However, not every country relies as heavily on small farmers. Small farms in other countries, like Brazil and Nigeria, account for less than 10% of the food production.
Large farms are still in control of the most land
Despite small family farms accounting for much of the food production globally, large farms worldwide own and operate over 70% of the world’s farmland. This means that farms that are greater than 50 hectares control the majority of the farmland in the world.
New England states have the most farms
New England states have the highest number of small family farms, with Midwestern states having the lowest prevalence of farms. The Midwest has the highest number of mid-size and larger family farms, showing an inverse relationship between small and large farms and U.S. geography.
Family farms account for the majority of high-value crops
High-value crops are expensive items to buy in-store compared to growing them alone. Large-scale family farms account for 57% of the high-value crops produced in the U.S., compared to 27% on non-family farms.
Upwards 83% of small family farms have a high-risk profit margin
As discussed earlier, many small farms are teetering in the high-risk zone due to the low-profit margin (less than 10%). This number fluctuates between 57 and 83%, showing just how prevalent it is for small-scale farms to operate in the high-risk zone, which can lead to issues in financial stability.
The EID AL helped small family farms
The EIDL Economic Injury Disaster Loan Program was a financial program created during the pandemic to help small businesses. It expanded to include farmers, providing them with a non-forgivable loan upwards of $150k. Farmers and agricultural businesses qualified for an advance and a loan to help them through the pandemic.
14% of farms have federal crop insurance
The Federal Crop Insurance Program provides essential federal support and aid for agriculture businesses and farmers in the United States. The USDA provides producers financial protection and stability against losses due to weather circumstances and price changes.
The FCIP provided more than 133 commodities in 2021 alone, covering nearly 300 million acres annually. Ranging 20 years from 2000 to 2020, the FCIP covered more than 82% of acres among agricultural producers, including barley, sweet potato, tobacco, wheat, and soybean farms.
Over the past few decades, the FCIP participation in family farms has steadily increased. The FCIP covered 444 million acres for the 2021 crop year showing a 150-acre increase since 2013.
Just in the time you spent reading this article, thousands of family farms in the United States and worldwide have been tirelessly working to grow and pack crops for distributors to ship around the world.
The agriculture industry heavily relies on family farms, whether small family farms for food production or large-scale family farms for dairy production. Changes in the agriculture industry have led to alterations in the way the farming industry operates, slowly moving from local distribution to worldwide distribution due to the Coronavirus pandemic.
While family farms operate in this new normal, they must learn to do so without forgoing the local community or falling under the median income level.