Structure and Finances of U.S. Farms: Family Farm Report ... - AgWeb

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Million-Dollar FarmsApproximately 47,600 U.S. farms have annual sales of $1 million or more. Most million-dollar farmshave annual sales between $1 million and $4,999,999, but 11 percent—5,200 farms—sell at least $5million. A large majority of million-dollar farms (86 percent) are family farms. Family farms account fora smaller share (64 percent) of farms with annual sales over $5 million.Million-dollar farms make up about 2 percent of all U.S. farms, but they account for 53 percent of thevalue of production (see figure). They also produce approximately 60 to 70 percent of high-value crops,hogs, dairy, poultry, and beef. The largest million-dollar farms—those with sales of at least $5 million—account for 35 to 45 percent of beef (largely in feedlots), milk, and high-value crops.As one might expect from the figure, 71 percent of farms with more than $5 million in sales specializein beef (largely in feedlots), high-value crops, or dairy. The prevalence of these specializations among$5 million farms suggests economies of scale persist in the production of high-value crops, finished beefcattle, and milk, even when annual sales pass $5 million.Consider dairy production, for example. Costs of production fall rapidly with herd size. Total costs perhundredweight for farms with 1,000 or more cows—which includes $5 million dairies—are less than halfthose for farms with fewer than 50 cows (see table). The biggest cost advantages for large dairies are inoverhead costs, since these operations can use capital and labor more intensively (MacDonald et al., 2007,p. 32).Note that gross farm sales is used to measure farm size in this report. Farm size, however, could bemeasured in terms of gross cash farm income (GCFI) or the gross revenue of the farm. The main differencebetween the two measures is that the gross value of sales includes the value of commodities removedunder production contracts, while GCFI excludes these removals, since the contractor—rather than thefarm—owns the commodity under production.Value of production of selected commodities by sales class, 2007Percent of sales1009080706050403020100High-valuecrops 1Hogs Dairy Poultry BeefTotal U.S.productionSales class:$5,000,000or more$1,000,000 to$4,999,999$500,000 to$999,999$250,000 to$499,999Less than$250,0001Vegetables, fruits and tree nuts, and nursery and greenhouse products.Source: USDA, National Agricultural Statistics Service and Economic Research Service,2007 Agricultural Resource Management Survey, Phase III.10Structure and Finances of U.S. Farms: Family Farm Report, 2010 Edition / EIB-66Economic Research Service/USDA
Full economic costs of milk production by herd size, 2005Number of dairy cows 1Type of cost Less than 50 50 to 99 100 to 199 200 to 499 500 to 999Dollars per hundredweight1,000 ormoreFull economic costs 30.09 25.50 20.82 17.92 16.07 13.59Operating costs 2 12.30 12.94 11.51 11.31 1.07 9.74Allocated overhead 3 17.79 12.56 9.31 6.61 5.00 3.85Note: Organic operations are excluded.1All dairy cows, including dry cows, but excluding calves, heifers, and bulls.2Largely feed costs, purchased and homegrown.3Includes hired labor, opportunity cost of unpaid labor, opportunity cost of land, taxes and insurance, and general overhead.Source: MacDonald et al. (2007, p. 32).For most commodities, the distribution of production by farm size is similar using either measure. Poultryfarms, however, will frequently be classed as large farms using gross farm sales, but as small farms usingGCFI (Hoppe et al., 2010, pp. 3-4). Using GCFI instead of gross sales decreases the share of poultryproduced on million-dollar farms to 20 percent while increasing the share of poultry produced by smallfarms to 55 percent, if small is defined as less than $250,000 in GCFI. The size classification of poultryfarms is somewhat ambiguous. Many poultry farms are small businesses that feed out large numbers ofbirds owned by contractors.11Structure and Finances of U.S. Farms: Family Farm Report, 2010 Edition / EIB-66Economic Research Service/USDA
Page 1 and 2: United StatesDepartment ofAgricultu
Page 3 and 4: United StatesDepartmentof Agricultu
Page 5 and 6: References. . . . . . . . . . . . .
Page 7 and 8: Distribution of farms, total produc
Page 9 and 10: IntroductionThe Family Farm Report,
Page 11 and 12: As in previous issues, the Agricult
Page 13 and 14: came from technological change, suc
Page 15 and 16: percent of the farms in both groups
Page 17: “point system” assigns values f
Page 21 and 22: Cow-calf enterprises offer three ad
Page 23 and 24: Location of U.S. Farms and Producti
Page 25 and 26: Table 4Farms and production by reso
Page 27 and 28: majority of farms in the region, 65
Page 29 and 30: Farm Operators, Principal and Secon
Page 32 and 33: farms. Since these farmers produce
Page 34 and 35: Farm Income and Financial Performan
Page 36 and 37: Defining the Financial MeasuresSome
Page 38 and 39: Operator Household Income and Net W
Page 40 and 41: of operator household net worth, re
Page 42: About three-fourths of medium-sales
Page 45 and 46: ContractingContracts can potentiall
Page 47 and 48: Types of ContractsA contract is a l
Page 49 and 50: per year rather than below the pove
Page 52: general—are overwhelmingly male.
Page 55 and 56: Farming in Metropolitan AreasFarmin
Page 57 and 58: Figure 15Mean operator household in
Page 59 and 60: into the Twenty-first Century. Marv
Page 61 and 62: U.S. Department of Agriculture, Nat
Page 64 and 65: In fact, the number of farms in eac
Page 66 and 67: (version 3). Respondents provide wh
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iefing room. Both sets of estimates
Page 70 and 71:
• Farm operators forget minor or
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ecause the sector accounts extend b
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