Data Confirms Trend Toward Dramatic Farm Consolidation

A decades-long analysis by the USDA shows a significantly greater concentration of production on the biggest farms.

In 1991, 31 percent of the value of U.S. farm production came from farms with at least $1 million in sales. By 2015, adjusting for changes in commodity prices, 51 percent of the value of U.S. farm production came from those $1-million-in-sales operations.

The analysis also shows a steady march toward higher-acreage farms. In 1987, 15 percent of all cropland was on farms with at least 2,000 acres of cropland. By 2012, 36 percent of cropland was on farms with at least 2,000 acres.

The point at which half of all cropland is on larger farms and half is on smaller farms nearly doubled in 25 years, rising from 650 acres in 1987 to 1,201 acres in 2012.

Consolidation in crop production has been persistent and widespread, but consolidation in livestock has been episodic. Dramatic shifts have occurred in the last 25 years in dairy, egg, hog and turkey production. Consolidation has continued in broiler and fed cattle production.

Only cow-calf operations buck the trend and show little consolidation. In 2012, 44 percent of pasture and grazing land was on ranches with at least 10,000 acres, down from 51 percent in 1987. Permanent pasture and grazing land accounts for more than 400 million acres, or 45 percent, of U.S. farmland.

The long-term shift toward agricultural consolidation have occurred in tandem with a shift toward greater farm specialization. Field crop operations increasingly grow just two or three crops, down from four to six crops, and livestock production continues to shift toward farms that produce no crops and rely on purchased feed.

The pace of farm consolidation appears to have slowed after 2007. In livestock, only dairy shows continued rapid consolidation. Financial considerations favor larger operations as their rates of return on assets exceed those for smaller operations.

Sources: American Agriculturist, USDA