The search for large farmers
If you talk to someone in agriculture long enough, the size of a nearby farm is bound to come up. Whether it’s the neighbor renting up all the land, the most desired seed customer or their most loyal tractor buyer, large farms are always fun to talk about. Ag folks talk about the biggest farmer they know as if the operation is surrounded by some kind of mystique.
The Center for Food and Agricultural Business at Purdue University focuses on understanding the relationship between agricultural input providers (retailers) and producers. One of the first topics that ag retailers talk about is the importance of the large producer. Large clients pull a lot of weight when they go into the market to purchase inputs: any level of margin multiplied over the number of units these operations work with is a significant impact to the bottom line. In some cases, there could be motivation to sell to these producers at nearly zero margin, just to qualify for volume discounts from the retailer’s manufacturers.
Talking to input suppliers about large farmers often yields two polar-opposite responses. Some retailers talk about how many large farmers they serve, while others talk about how few and far between these producers are — if they can be found at all. In some cases, large farmers are as plentiful as fish in a barrel. In other cases, it’s like a search for unicorns. Do these seemingly ideal customers even exist?
Large Farmers Across the Country
To help answer that question, the center’s researchers decided to figure out where large farmers are located. The latest available data on these topics is from the USDA’s 2007 Census of Agriculture. Although a new survey has been sent out, data hasn’t been released and isn’t expected until early 2014. The center plans to revisit this topic once the new data has been released.
In 2007, the USDA found that 347,760 farms in the United States reported planting corn, planting only 248 acres on average. The USDA data breaks the farms into groups by number of acres. At the top end of the USDA reporting scale are farms with more than 5,000 acres of corn. How many of these 347,760 farms do you think reported having more than 5,000 acres?
0.067%. Not 6%, but 0.067%. In 2007, the USDA reported that 233 farms planted more than 5,000 acres of corn. While this number seems small, it was a substantial increase from the 2002 survey, when only 67 farms reported planting more than 5,000 acres.
When it comes to soybeans, only 74 farms planted more than 5,000 acres, compared to 85 farms in 2002.