Small farms, those making under $350K, now have less than half of U.S. farmland and 1/5 of production by value

USDA chart shows production by size of farm; to enlarge, click on it.

Small family farms, defined by the U.S. Department of Agriculture as those with gross cash farm income under $350,000 a year, now have less than half of U.S. farmland and only a fifth of agricultural production by value, according to a report from USDA's Economic Research Service. 

"In 2020, small family farms operated 48 percent of U.S. farmland, down from 52% in 2011. However, they accounted for only 20% of production by value, a decline from 26% in 2011," write ERS's Christine Whitt, Jessica E. Todd, and Andrew Keller. 

"Large-scale family farms, with $1 million or more in gross cash farm income, experienced an increase in the total value of production to 46% in 2020 from 35% in 2011." They also had an greater share of land being farmed, 24%, a big jump from 16% in 2011. The numbers are skewed slightly by "higher prices and sales in 2020," which pushed some formerly "small" farms above the $350,000 threshold, ERS says.

Profits: ERS says 42% of small farms lost money in 2020, 39% in 2011; that was true of only 17% or 18% of larger farms. However, many small farmers "do not consider farming their primary occupation and receive little or no income from farming," ERS notes. "These small farms receive much of their income from off-farm sources, which are not reflected in the operating profit margin. . . . During the past decade, most small family farms had an operating profit margin of less than 10 percent," which "indicates a higher risk."

Direct sales: The pandemic seemed to prompt small farms to make more direct sales to consumers or "intermediary supply chains" such as retail outlets, restaurants and wholesale distributors, ERS reports: "Farmers sold almost $10.7 billion in commodities through direct marketing channels in 2020, a nearly $2.8 billion (35%) increase" from 2019. Of the total, 42% went to restaurants and grocery stores; "sales to institutions declined 86% in 2020 compared with 2019 as the pandemic led to closures or other restrictions."