John Phipps: Are Economics Driving the Future of Family Farms?

02:00PM Jan 06, 2020
Father & Son Walking
It's not just the size of a family farms that are changing. John Phipps answers a U.S. Farm Report's viewer about the future of family farms and why the answer is very complex.
( Lindsey Benne )

Brent DeLong from Bangor, Maine starts off the year with a question about family farms:

“I watched as many small family farms were bought out by large family farms and learned that this was a national trend. Years later I noticed that large family farms were being swallowed up by large corporations. Has this trend leveled off and what is the future of the family farm?”

Thanks for writing, Brent. For whatever reasons, the family farm remains a beloved icon of American culture, even though its economic and social impact has steadily declined. The concern about small farms becoming extinct has been around for my entire 50-year career, but the actual makeup of our ag sector is far more complicated.

More than losing family farms, these are the trends I think continue to shape agriculture.

  1. Mechanization, and now automation. Ag needs fewer people every day.
  2. Specialization. Many popular images of family farms revolve around a diversified operation. Especially for livestock, with one exception (cow-calf operations) it is fair to say a producer either has lots of animals or virtually none. In the same way, more family farms grow just 2-3 crops. The corn-soybean farm is the typical example.
  3. While it is widely reported that America’s farms are over 90% family operations, the enormous number of tiny farms with little production skews the statistic. Very large operations can still be family farms in the strictest sense, but then giant grain merchandiser Cargill could fairly be called a family operation too.
  4. There is no evidence of rapid consolidation for two types of farms: cash grain and cow-calf. Larger farming operations are always emerging, but very few seem to survive more than a couple of generations. Without consolidation of land ownership, farm operation size is constrained.
  5. There is no evidence of any push to non-family corporate ownership of cropland.
  6. Always remember the biggest reason family farms end is the lack of a successor, not economics.

Finally, in the last few years, a trend toward what I call agrarian farms has sprung up in some areas where direct consumer sales are feasible. From organic vegetables to custom beef processing, these farms come closer to resembling that cherished picture of family farms and may be a more viable alternative than they now appear. We will revisit this topic often in the future, no doubt.

USFR 01/04/20 - Customer Support