Farming and ranching – it’s a family business

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Factory farm. Corporate giant. Industrialized agriculture. Too big to care. That’s how a chorus of anti-modern agricultural detractors typically describes farming and ranching in the United States today. And while it’s true, agricultural operations have grown in recent decades and many farms and ranches rely on at least some hired or contract labor to get the job done, the fact remains that most are family businesses, according to USDA’s Agricultural Research Service.

According to USDA’s Economic Research Service, a family farm is one where the principal operator and people related to the principal operator by blood or marriage own most of the farming business. Further, according to ERS, the farm operator is the person who is responsible for the on-site, day-to-day decisions of the farm or ranch business. A family farm can be any size – from just a few acres to tens of thousands of acres. And a fact that some conveniently leave out when talking about today’s agricultural sector – 97.6 percent of all U.S. farms are family farms and are responsible for 85 percent of U.S. farm production.

To take it one step further, 87.1 percent of U.S. farms, accounting for 57.6 percent of U.S. farm production, are family farms relying primarily on the principal operator and spouse. Or from a different angle, farms that require the principal operator and spouse to provide most of the labor and hire or contract some of the labor out to other workers account for 86.1 percent of family farms and 47.4 percent of U.S. farm production. That’s not small potatoes and it sure isn’t what some would have the general public believe.

USDA reports that family farms accounted for 96 percent of production of major field crops (corn, cotton, soybeans and wheat) and in hogs, poultry and eggs. They accounted for 62 percent of high-value crops (fruits, vegetables and nurseries) and 75 percent of dairy production.

What about the 2.4 percent of U.S. farms, accounting for 15 percent of production, that are nonfamily farms? They, too, play an integral role in the overall agricultural sector. Some are large corporations. Many are small and have less than $35,000 in sales. Most nonfamily farm production, on the other hand, comes from those that have annual sales of at least $1 million. Nonfamily farms are typically organized as partnerships, sole proprietorships or corporations. According to USDA, most farms organized as corporations have no more than 10 shareholders and are likely tightly held partnerships that have incorporated for tax and management purposes.

USDA highlights many of the reasons it believes family farms and ranches continue to dominate the landscape of U.S. agriculture – ranging from economics to generational transfer of knowledge about the land, nutrients, animal handling techniques and more. From my perspective, those are true and vital. To be successful in today’s agricultural sector, one has to have a savvy business mind and sharp technical skills. It takes a special knowledge to know when to sell a bin full of corn versus when to hold it or how to skillfully help a mama cow deliver a baby calf coming breach.

It also a special sense of pride, commitment and tradition. It takes both. Family farms and ranches come in all shapes and sizes. They were built on years of sacrifice and hard work. They were maintained by making good business decisions. They live on, in part, because of the tradition.

In the April issue of Drovers/CattleNetwork we will have a feature article profiling a young producer who made the decision a few years ago to become the sixth generation in his family working on their ranch in Texas. You’ll have an opportunity to learn about the challenges he faces relating to growing his own operation in a time of high land prices and record cattle prices but also about his commitment to ensuring the land his great grandparents once worked remains in the hands of his family for years to come. 

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AZ  |  March, 18, 2014 at 10:04 AM

what % of farmland is owned farmers that make more than 500k?

Chris Hitch    
Guymon, OK  |  March, 18, 2014 at 10:30 AM

And why is that even relevant? 97.6% of the land producing 85% of the prodction are family farms. Does it matter that some are large farms with hired help? Is it bad for a farmer to be successful? I have never understood why any agricultural production is somehow supposed to be done by small poor families. Are farmers supposed to farm for free and provide you with your nutrition out of the goodness of their heart?

KS  |  March, 18, 2014 at 11:38 AM

Moloina, do you know the difference between gross and net? Didn't think so. with today's tight margins 500k in gross sales will not even support a family in many situations

az  |  March, 19, 2014 at 02:26 PM

just a simple question !! what % of farmland is owned by people that make over 500k?

Kansas  |  March, 19, 2014 at 02:33 PM

Molina - if you would like to learn more about specific demographics of farmers and ranchers, you should check out the latest USDA Census of Agriculture - A quick look at the first table shows around 8 percent of farms in the United States report income of $250,000 to $999,999.

az  |  March, 19, 2014 at 03:01 PM

thank you much

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