Farms in the U.S. encompass a wide range of operations, but the latest USDA Agricultural Resource Management Survey shows that 86% are small family farms operating on 41% of the nation’s agricultural land and contributing 17% of total production value.
The 2023 USDA report analyzed data from approximately 14,700 farms, classifying them as family or nonfamily based on ownership. Family farms, primarily owned by operators and their relatives, are categorized by gross cash farm income (GCFI) and operator roles:
Small family farms (GCFI under $350,000):
• Retirement farms: Operated by individuals retired from full-time farming but continuing small-scale operations.
• Off-farm-occupation farms: Run by operators with primary jobs outside farming.
• Farming-occupation farms: Led by operators identifying farming as their primary profession, further divided into low-sales (GCFI < $150,000) and moderate-sales (GCFI $150,000-349,999).
Midsize family farms: (GCFI $350,000-999,999).
Large-scale family farms: These include large farms (GCFI $1-4.9 million) and very large farms (GCFI $5 million-plus).
Nonfamily farms, by contrast, include operations owned by unrelated individuals or corporations, or managed by hired professionals.
Farms and production
According to the survey, in 2023, large-scale family farms were a dominant force in U.S. agriculture, producing 48% of the total value of agricultural output while managing 31% of the nation’s farmland. USDA said these farms led in the production of cash grains and soybeans (52%), cotton (71%), dairy (77%) and specialty crops (59%). Midsize family farms, by comparison, accounted for 18% of agricultural land and total production value.
Despite their smaller scale, small family farms contributed significantly to specific sectors. The survey said they produced 45% of the nation’s hay and 46% of poultry and egg output, much of which is contracted production, where farmers are paid a fee for raising poultry or managing egg operations. These farms also accounted for 22% of the value of beef production, often focusing on cow-calf operations, while large-scale family farms, which contributed 39% of beef production, typically operated feedlots.
In total, the survey found that family farms represented 96% of all U.S. farms and generated 83% of the country’s agricultural output.
The survey found that nonfamily farms, which made up 4% of all U.S. farms in 2023, increased their contribution to the agricultural sector. They now account for 17% of the total value of production, up from 11% in 2022. Their production ranged from 8% of the total value for hay to 28% for specialty crops. Notably, the share of beef production by nonfamily farms rose sharply, from 11% in 2022 to 26% in 2023, underscoring their expanding role in U.S. agriculture.
Financial performance
According to the USDA survey, the agriculture sector demonstrated robust financial performance in 2023, with net cash income exceeding the inflation-adjusted 10-year average by 11%. However, financial outcomes varied widely across farm types, with small family farms and nonfamily farms facing significant challenges. Depending on their type, 52% and 85% of small family farms and 53% of nonfamily farms operated in the high-risk zone, defined as an operating profit margin (OPM) below 10%.
In contrast, USDA said midsize, large and very large family farms showed stronger financial stability. The survey revealed that 37% of midsize farms and 42% of large and very large farms operated in the low-risk zone, with OPMs of at least 25%. With OPMs between 10% and 25%, medium-risk farms ranged from 4% among low-sales family farms to 29% among very large family farms.
The USDA survey showed participation in federal crop insurance programs also increased in 2023, with 16% of farms enrolled, up from 14% in 2022. Row crop farms led participation at 66%, while specialty crop and livestock farms lagged at 17% and 12%, respectively. Midsize and large-scale family farms accounted for 42% of participants, managing 67% of harvested cropland and receiving the same share of indemnity payments. Nonfamily farms saw a notable increase in program engagement, receiving 18% of indemnities in 2023, compared to 8% the previous year.
Household performance
In 2023, the median total income for U.S. family farm households reached $97,984, surpassing the median income of all U.S. households ($80,610) and the inflation-adjusted 10-year average of $95,025, according to USDA data.
Income levels varied widely across farm types, with households operating very large family farms earning a median of over $1.02 million annually, while low-sales family farms reported a median income of $58,300. Both low-sales and retirement farm households fell below the median income for all U.S. households and households with self-employment income ($104,949).
USDA reported average farm incomes of -$3,700 for off-farm occupation households and -$5,700 for low-sales households in 2023. Most U.S. farm households (85%) relied on off-farm income as their primary source, using it to offset farm expenses when necessary. The reliance on off-farm income decreased as farm size increased, with fewer large family farms depending on outside earnings. However, even among very large family farm households, 11% reported earning more than half their income from off-farm sources, highlighting the diverse financial dynamics within U.S. agriculture. — Charles Wallace, WLJ contributing editor
