When you were a kid and attended family reunions, there were always a bunch of uncles around because Granddad needed a bunch of sons to help with the farming. There were only a couple of boys needed in the last couple generations because tractors and bigger field equipment could cover ground more efficiently and livestock operations were becoming automated. Today, well, it is much different, and there are some reasons why.
About every farming family used to have a senior generation member who could tell tales of hard times, but they have passed on, along with the days when work was laborious and mules kicked hard. Modern farms have expanded in size, while the number of operators and hired labor has diminished. USDA economists only had to go back to 1982 to find significant changes in farm structural trends. They looked at the Ag Census data from the last five times it was collected, which ranged from 1982 to 2007. They found that US farms remain an important segment of the global economy, saying, “Although U.S. agriculture has maintained productivity increases while reducing resource use, expected world population growth and increasing energy demands could soon outstrip its capacity to meet these needs.” They wanted to find out if the rate of progress in US agriculture would be up to global expectations.
In the wake of continually changing policy, farming has continued to evolve with farmers being more educated, managing larger operations, relying on production contracts, and larger business structures. However, 98% are still primarily a family business. There are several resources required by every farm:
1) Labor varies because of the nature of the farm. The median farm has 0.7 annual person equivalents, which means the median U.S. farm can be managed by someone who spends only 70% of his or her time. .While larger farms needed hired labor, those numbers have declined even as output has increased, that is because of biotechnology and increased productivity of those working on the farm.
2) Demographically, 83% of farmers where Caucasian men in the 2007 Ag Census, but that number has declined from 93% since 1982, reflecting increases by minorities and women. 30% of principal farm operators are over 65 years of age, and those under 35 make up 5% of principal operators. The latter is down from 16% in 1982. Regarding the older farmers, USDA says most of the assets of older operators are on retirement or lifestyle farms that produce only 2% of US output.
3) Early in the 20th Century farmers had less education than the general public, but by 2007 90% of farmers had a high school diploma, compared to only 87% of the general public. College degrees are more prevalent in the general public, but the gap is closing.
4) Off farm work was recorded by 40% of U.S. farmers who spent 200 days per year working at a second job, up from 35% in 1982. Much of that can be attributed to the growth of small farms, which are subsidized by off-farm employment. 75% of off farm income is from wage and salary positions.
5) Land, which is a considerable percentage of US resources, is used to produce only 1.3% of US GDP. About 1.16 billion acres are used for some agricultural purpose, which is 52% of total U.S. land area, and that declined about 5% from 1982 to 2007. Currently, cropland is at its lowest level since being tallied first in 1949. Between 2002 and 2007, 14 million acres of cropland went out of production and four million acres entered cropland production, and that dynamic was recorded in every different sector of the nation.
6) The crop mix has remained steady with the 8 major crops consuming a majority of the cropland. That was 316 million acres in 1982, dropped to 276 in 1992, and rose to 286 by 2007. Between 1982 and 2007 11 million acres of cropland, 12 million acres of pasture, and 16 million acres of forest was converted from rural to an urban use.
What will the future bring? The USDA economists say while farmland has been declining, there is a limit on how much land is productive as cropland, and the supply of land is fixed. The number of farms had declined for many decades, but has stabilized, and agricultural production has continued to grow due to greater productivity. They believe that increased commodity prices from global demand will shift more land into crop production and entice people into agriculture. But they admit, “Nevertheless, future growth in farm production is likely to arise from continued productivity growth if historical trends continue.”
Among other changes in the structure of agriculture, the USDA economists said farmers would rely more on contract arrangements, linking them with vendors on one side and with buyers on the other, which help to spread out risk. Risk is also being managed more frequently by Federal Crop insurance, which saw covered acreage double to 200 million from 1989 to 2007.
Another trend is the continuing shift to larger farms which can adopt new technology more easily, and are favored by those food processors that use marketing contracts. Farming is still expected to remain a family enterprise on 98% of farms.
And a final trend is the growth in productivity, which increased 45% between 1982 and 2007, yet with little change in input use. Such productivity has kept food prices stable during that period of time.
Agriculture is continually changing, but the change has to keep up with global food needs. In the past 30 years less U.S. labor and land have been used for food production, but productivity has increased 45% with no change in inputs.
Source: FarmGate blog