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

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The distribution of working-land payments between small and large-scalefamily farms is similar to that of commodity-related payments (fig. 12), withabout three-fifths of the payments going to large-scale farms. Both types ofprograms—directly or indirectly—target production:• Production of specific commodities, in the case of commodity-relatedprograms.• Environment problems on land in production, in the case of workinglandprograms.The target of land-retirement programs, however, is environmentally sensitiveland to remove from production, so the distribution of conservationpayments differs from those of commodity-related payments or working-landpayments. Retirement, residential/lifestyle, and low-sales farms received 73percent of land-retirement payments in 2007, reflecting their large numbers(84 percent of all farms), their large share of farmland (51 percent of theland owned by farms), and their tendency to enroll large shares of their landin land-retirement programs when they do participate. Enrollments in landretirementprograms account for 54 percent of the land operated on participatingretirement farms, 40 percent on participating residential/lifestylefarms, and 27 percent on participating low-sales farms. In contrast, enrollmentranges from 5 percent to 12 percent for participating medium-salesfarms and large-scale farms.The main occupation of residential/lifestyle operators is off the farm, whichlimits the amount of time they can spend farming. Since acreage enrolledin land-retirement programs requires little labor or capital investment andprovides a guaranteed income stream, residential/lifestyle farmers may findthe programs financially attractive, particularly if their farms are not profitable.Given their age, many retired farmers and older farmers on low-salesoperations have land available to put into conservation uses.36Structure and Finances of U.S. Farms: Family Farm Report, 2010 Edition / EIB-66Economic Research Service/USDA
ContractingContracts can potentially provide benefits to both producers and contractors(MacDonald and Banker, 2005, pp. 52-53, MacDonald et al., 2004, pp.24-30). Farmers get a guaranteed outlet for their production with knowncompensation, while contractors get an assured supply of commodities withspecified characteristics, delivered in a timely manner. ERS defines two typesof contracts in ARMS—marketing contracts and production contracts (seebox, “Types of Contracts”).Production Under ContractAlthough contracts account for nearly two-fifths of U.S. agricultural production,the share varies by commodity (fig. 14). For example, U.S. farmersproduce 85 percent of poultry under contract. Contracting also accounts forat least half of the production of peanuts, tobacco, sugarbeets, dairy products,and hogs. At the other extreme, only small portions of wheat, soybeans, orcorn—all traditional field crops—are grown under contract.The aggregate data show slow and steady growth in contracting over theyears, but change can be more rapid for some commodities. For example,the share of total agricultural production under contract grew by only 5percentage points between 1996-97 and 2007, from 32 percent to 37 percent.During the same period, however, the share of tobacco production coveredby contracts went from less than 1 percent to 64 percent. Cigarette manufacturersreplaced cash auctions with contract marketing because contractsbetter enabled them to acquire enough of the specific types of tobacco theyneeded (MacDonald and Banker, 2005, pp. 58).The share of peanuts grown under contracts also increased rapidly, from34 percent in 1996-97 to 63 percent in 2007. The 2002 Farm Act ended theFigure 14Share of value of production under marketing or production contractsfor selected commodities, 1996-97 and 2007Shares of peanuts, tobacco, and hogs sold or removed under contract increased dramaticallyPercent of value of production100Average of 1996 and 199780120076040200All commoditiesAll cropsWheatSoybeansCornVegetables1An average of 1996 and 1997 was used to provide a more statistically reliable estimate.FruitsCottonPeanutsTobaccoSugarbeetsAll livestockCattleDairyHogsPoultry and eggsSource: USDA, National Agricultural Statistics Service and Economic Research Service, 1996, 1997, and 2007 Agricultural ResourceManagement Survey, Phase III.37Structure 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 and 18: “point system” assigns values f
Page 19 and 20: Full economic costs of milk product
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 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
Page 68 and 69: iefing room. Both sets of estimates
Page 70 and 71: • Farm operators forget minor or
Page 72: ecause the sector accounts extend b

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