A study of 35 years of data confirms that U.S. farms are getting bigger and offers insights into how various commodities are affected.
James MacDonald, a USDA researcher turned professor at the University of Maryland, analyzed decades of data and found:
- Farms with at least 2,000 acres of cropland operated 15 percent of all cropland in 1987. In 2017, these larger farms operated 37 percent of all cropland.
- In 1987, half of all dairy cows in the U.S. were in herds of 80 or fewer cows. In 2017, the midpoint herd size shifted to 1,300 cows.
- In 1980, there were about 250,000 dairy farms in the country. Today, there are 30,000.
“Consolidation in dairy is just dramatic,” MacDonald said, “with shifts to much bigger farms, and smaller farms going out of business. The very large farms have lower costs than midsize and smaller ones, and while those lower costs reflect productivity growth and result in lower prices for the consumer, it is also pretty heartbreaking for people who have been small or midsize dairy farmers who are going out of business.”
MacDonald found that family farms still account for the vast majority of farms and farm production. He said consolidation encompasses shifts of production to larger family businesses, but these are still predominantly family businesses.
Technology is driving the trend. Labor-saving equipment, materials, and organizational changes now allow a single farmer or farm family to manage more acres or more livestock. Advances in technology are often expensive to implement, but cheaper in the long run, so larger operations have an advantage and have lower overall operating costs.
The shifts in production are significant in 60 of the 62 crop and livestock commodities that MacDonald analyzed.
“This shift happens everywhere, in fruits and vegetables as well as field crops,” he said. “But with crops, we see a more steady evolution, whereas with livestock, you get spurts of dramatic change.”
MacDonald worked for the Economic Research Service of the USDA for nearly 40 years and is now professor in agricultural and resource economics. His findings were published in Applied Economics Perspectives and Policies.
Source: University of Maryland