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Top 3 Conclusions from the USDA ERS 2017 Report on America’s Diverse Family Farms


by DON HARDEN

As a family farmer myself, the status of the family farm and its impact on the future of agriculture is not lost on me.  With the average age of farmers on the rise, family farms are also the focus of USDA’s Economic Research Service’s (ERS) recently released a report on the subject: America’s Diverse Family Farms, 2017 Edition.  The report seeks to better understand conditions within our diverse farming sector by classifying farms using annual revenue and ownership rather than by U.S. averages.

Top Three Conclusions on Family Farms

The report defines a “family farm” as one “owned by the principal operator— the person most responsible for running the farm— and individuals related to the principal operator.”  The ERS looked at family farms of all sizes— from small farms with a gross cash farm income (GCFI) of under $350,000 to very large-scale farms with over $5 million GCFI.  The top three takeaways were:

  1. Farming is still a family affair.  According to the report, 98.8 percent of farms were family farms of some kind.  All told, family farms generate 90 percent of ag production in the U.S.
  2. Most farms are small farms.  In total, 89.9 percent of U.S. farms are considered small farms.  These small farms work just over half of the country’s farmland.
  3. Small farms are more likely to be operating with high financial risk.  The report found that 50 to 75 percent of all small farms have an operating profit margin (OPM) below 10 percent.  Conversely, only 31 to 42 percent of mid-sized and large farms had OPMs under 10 percent.  An OPM measures what percentage of a business’s revenue is leftover to finance ongoing operations after paying operating costs.  It can be used as a measurement of risk; an OPM of 25 percent or higher is considered to be desirable and equates to low financial risk.

The AgAmerica family is making great strides in supporting the family farms of our nation now and for generations to come and that is an effort I am proud to be a part of.

This column is sponsored by AgAmerica Lending.    

BIO: Donald Harden, a Relationship Manager for AgAmerica Lending, grew up in the cattle and citrus business, managing a family ranch of several thousand cattle and horses. He has more than 30 years of experience in the real estate business, and more than 20 years specializing in agricultural sales. Over the years, Don has been honored to serve the ag community in many facets, including as a director and on the board of the cattlemen’s association, as a manufacturer’s representative for ag equipment companies, and as a beef cattle specialist for a national feed company. For more information about Don and the AgAmerica team, call 844.238.5312 or visit AgAmerica.com.