“Family farms comprise 99 percent of U.S. farms, accounting for 89 percent of production. Small farms make up 90 percent of farms, operating nearly half of farmland.”

 -  America's Diverse Family Farms, 2016 Edition/Economic Information Bulletin No.164 by Robert Hoppe and James M. MacDonald, USDA Economic Research Service

Big farms – those with gross cash farm income of a million dollars or more - are an increasing part of the US landscape, accounting for 52% of production in 2015, up from 31% in 1991. Only 3% of these million-dollar farms are non-family corporations, of which 80% report no more than 10 shareholders.

Why are large farms increasing? Partly because families are better able to handle the logistical and financial challenges of running big operations, thanks to labor-saving innovations that favor scale economies. Partly because children of farmers are opting out of the business to pursue alternative careers that pay more and don’t require 12-hour work days. So farmers are getting older – average age 58 – and when they retire, they sell their holdings to other farmers instead of having the kids take over. The remaining farms get bigger.

Are big farms a bad thing? Not necessarily. Their size and robust finances makes it more likely they will be early adopters of new technologies that protect the environment and promote sustainable practices. For instance, large farms are more likely than small ones to adopt precision technologies, such as GPS tractor guidance systems, GPS soil and yield mapping, and variable-rate input applications.

These technologies help farmers adjust production practices to changing field conditions, which improve soil health and reduce fertilizer use. Farmers who live at the margins – what the USDA calls the “red zone” – don’t have the luxury to try out the latest green technologies, given initial cost and delayed or uncertain payoff. And it is mostly small farmers who inhabit the red zone – operating at a loss or barely making a profit. They simply don’t have the financial cushion to assume a lot of risk for the greater good. It’s the big farms – by and large, run by families – who can afford that risk, acting as laboratories for new products and practices, which eventually get better and cheaper for widespread adoption.

Big Ag: making the world a better place.

References:

America's Diverse Family Farms, 2016 Edition/Economic Information Bulletin No.164 by Robert Hoppe and James M. MacDonald, USDA Economic Research Service

Green Technologies for a More Sustainable Agriculture Agricultural Information Bulletin No. (AIB-752) 42 pp, July 1999 by Jim Hrubovcak, Utpal Vasavada, and Joseph Aldy. Accessed online on 12/30/16: https://www.ers.usda.gov/publications/pub-details/?pubid=42251

Precision Agriculture Technologies and Factors Affecting Their Adoption by David Schimmelpfennig. Accessed online on 12/30/16: https://www.ers.usda.gov/amber-waves/2016/december/precision-agriculture-technologies-and-factors-affecting-their-adoption/