Family farms are the backbone of American agriculture. According to the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS), family farms constitute a significant majority, representing almost 96 percent of the 2,204,792 farms across the United States. This prevalence underscores the enduring importance of family-run operations in the nation’s agricultural sector.
To better understand this diverse landscape, the USDA categorizes family farms based on their gross annual sales, providing valuable insights into their scale and economic impact:
- Very large family farms: These substantial operations, numbering around 101,265, generate a gross annual income exceeding $500,000.
- Large family farms: Comprising approximately 86,551 farms, these businesses have gross annual sales ranging between $250,000 and $500,000.
- Small family farms: The most numerous category, with about 1,925,799 farms, these operations have gross annual sales under $250,000.
This sales-based classification might surprise some, as farm size is often intuitively associated with acreage. However, using gross annual sales as a metric accounts for the vast differences in land productivity and agricultural practices across various regions. For instance, an acre in a fertile, high-rainfall area is considerably more productive than an acre in a low-rainfall region. Therefore, sales figures offer a more standardized measure of farm size and economic activity.
While family farms are numerous, the economic output of the agricultural sector is concentrated among larger operations. Large and very large family farms are responsible for over 63 percent of the total value of agricultural products sold in the U.S. In contrast, non-family farms contribute approximately 21 percent, and the nearly two million small family farms account for about 15 percent of the total value. This highlights a crucial aspect of the American agricultural economy: while small family farms are the majority, larger family-run businesses drive a significant portion of the production value.
Looking ahead, the future viability of family farms faces several interconnected challenges. It is estimated that a substantial portion of U.S. farmland, around 70 percent, will transition ownership within the next two decades. A critical concern is the lack of succession planning within many family farms. Often, there isn’t a younger generation equipped or willing to take over the operation. Without adequate succession plans, family farms are at risk of going out of business, being absorbed by larger agricultural entities, or being converted to non-agricultural uses. This generational transition is a pivotal factor in maintaining the legacy of family farming.
However, there are also positive trends emerging that offer opportunities for smaller family farms. The increasing consumer demand for local produce and the growth of direct-to-consumer and regional marketing channels present a significant avenue for small and beginning farmers to achieve financial stability. This renewed interest in local food systems can bolster the economic prospects of smaller family farms and contribute to the overall resilience of the agricultural sector. Encouragingly, after decades of decline, the number of family farms in the U.S. has recently seen a growth of about 4 percent, indicating a potential revitalization of this vital part of the American economy.
