On December 10, USDA’s Economic Research Service (ERS) launched a new report, “America’s Farms and Ranches at a Glance: 2024 Edition.” The study offers a snapshot of the 1.9 million farms in the United States for the year 2023, with new insights on farm household finances, technology adoption, and the ongoing challenges faced by small and mid-sized family farms in a changing agricultural landscape.
Small operations still make up majority of U.S. farms, but a declining market share
USDA’s report breaks down U.S. farms into four different categories. Family farms are farms in which the majority of the business is owned by a principal operator and/or their relatives by blood, marriage or adoption. Family farms are broken down into three categories: small (family farms with a gross cash farm income, or GCFI, of less than $350,000), mid-sized (GCFI between $350,000 and $999,999), and large (GCFI of $1 million or more). Nonfamily farms are farms where the principal operator and related individuals do not own a majority of the business. Nonfamily farms can have a variety of different ownership structures such as corporations, cooperatives, or other non-family investors.
The survey found that in 2023, small family farms accounted for 86 percent of all U.S. farms and 41 percent of U.S. agricultural land, but only generated 17 percent of the total value of U.S. agricultural production. This is a slight decline from 2022, when small family farms made up 87 percent of all farms and 19 percent of total production value.
In contrast, nonfamily farms owned by corporations or partnerships saw the largest growth in market share, rising from 11 percent to 17 percent of total farm production value between 2022 and 2023. This growth, largely concentrated among large-scale nonfamily farms with a gross cash farm income (GCFI) of $1 million or more, is especially pronounced in the beef industry, where nonfamily farms’ share in total production value jumped from 11 percent to 26 percent.
Distribution of farms, acres operated, and value of production by farm type, 2023
Source: USDA, Economic Research Service (ERS) using USDA, National Agricultural Statistics Service and USDA, ERS, 2023 Agricultural Resource Management Survey data.
Small farms face large financial challenges
Small and mid-sized farms operate on tighter profit margins than large farms, leaving them more financially vulnerable. ERS estimates that between 52 and 85 percent of small family farms, depending on the farm type, have operating profit margins identified as “high-risk.” Though U.S. farm households in general tend to have a higher median income ($97,984, including non-farm income) than overall U.S. households ($80,610), low-sales and retirement small family farm households have median household incomes well below this.
However, most of this farm household income doesn’t actually come from farming: 85 percent of farm households received over half of their income from off-farm sources, especially among small family farms. Fifty-one percent of farm households actually reported a negative net farm income, though this is not necessarily an indicator of a farm household’s overall financial well-being. And though small farms are less likely to rely on credit than large and mid-sized farms, they tend to have the highest amount of debt relative to their gross farm income.
Farms by operating profit margin and farm type, 2023
Source: USDA, Economic Research Service (ERS) using USDA, National Agricultural Statistics Service and USDA, ERS, 2023 Agricultural Resource Management Survey data.
Participation in federal programs varies with farm size
The study also found differences between small farms and larger farms in terms of participation in government programs. Only 24% of U.S. farms received some type of government payment in 2023, including 21% of small family farms and 44% of mid-size and large family farms. Small family farms comprised a higher proportion of participants in conservation programs than larger farms, accounting for 76% of all payments from USDA’s Conservation Reserve Program (CRP) and 41 percent of NRCS working lands payments including EQIP and CSP. Midsize family farms received 11 percent and 21 percent of these payments, respectively. Though these findings are encouraging, many small-scale producers still experience challenges accessing conservation resources through NRCS, particularly Historically Underserved Farmers and Ranchers. (See RAFI’s new 71-page report, Accessing NRCS Services and Benefits: Challenges and Recommendations for Historically Underserved Farmers and Ranchers, following a two-year cooperative agreement with NRCS.
Meanwhile, small farms had much lower rates of participation in federal crop insurance programs.Though small family farms represent 86 percent of all farms, they comprised 51 percent of participants in federal crop insurance and received only 15 percent of crop insurance payouts. Midsize family farms represent 6 percent of all farms, 23 percent of participants in federal crop insurance, and 19 percent of crop insurance payouts.
While small family farms play a major role in the U.S. agricultural economy, they need support to meet the ongoing challenges of financial vulnerability and increasing corporate consolidation. The findings of the new ERS report underlines the need for policies that better support small farms, promote equitable access to resources, and ensure their viability in an increasingly competitive agricultural landscape.
For more information and to read the full report, visit https://www.ers.usda.gov/publications/pub-details/?pubid=110559