Beginning farmers: Fewer, smaller, older

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Beginning farms or ranches account for about 22 percent of the nation’s 2 million family farms, 11 percent of family farm acres and 10 percent of the value of production from family farms according to a new report from the USDA Economic Research Service.

The report, titled “Beginning farmers and ranchers at a glance,” notes that the number of beginning farmers – those with 10 years or fewer experience farming – has declined for the past 20 years. In 1982, 38 percent of family farms fit the beginning farmer category. By 2007, that percentage had declined to 26 percent.

By USDA’s definition, about 98 percent of all U.S. farms are family farms.

As we might expect, beginning farmers tend to be younger than established farmers, but the age range continues to creep upward. In 1982, 16 percent of all principal operators were under 35 years old. By 2007, only 5 percent were under 35 years old. The average age of principal operators of beginning farms in 2011 was 49, compared with 60 for established farms.

For beginning and established farms, the most common specialty is beef cattle, but fewer beginning farmers than established farmers specialize in raising cattle.

The report’s authors define farms as producing and selling $1,000 or more of agricultural products in a year, but it is clear many of the beginning farms are “hobby farms” that generate income only in some years.  In 2011, 30 percent of beginning farms and 25 percent of established farms did not produce any marketable agricultural commodities, according to the report.

Of farms with positive values of production in 2010, 19 percent of beginning farms and 15 percent of established farms sold products directly to individual consumers or to restaurants or stores that sell to consumers. Beginning farms that sold directly to consumers, rather than to local retail intermediaries, were less likely than other beginning farms to make a profit.

On average, off-farm income accounted for 83 percent of farm- household cash income in 2011. Most farm families operating small farms have lose money on their farming operation most years after depreciation. The average farm income of beginning farm households in 2011 was $1,902 versus $18,119 for established farms.

However, off-farm incomes were higher on beginning farms, averaging $89,015 versus $68,172 for established farms. The average beginning farm was 200 acres in 2011, compared with 434 acres for established farms.

The price of land is one of the biggest barriers for beginning farmers. The report notes the per-acre value of farm real estate in 2012 averaged $2,650, up 10.9 percent from 2011, although there was considerable variation between regions.

Read the full report from USDA/ERS.

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