Agricultural Economy
(Selected research findings from Fiscal Year 2020. Much of this research pre-dates the pandemic. Please visit www.ers.usda.gov/covid-19/ for the latest ERS research related to COVID-19)
Farm income indicators and forecasts measure the financial performance of the U.S. farm sector.
ERS provides authoritative information on the financial health of the farm sector, including the performance of farm operations and well-being of farm households. In the September 2020 statement, ERS forecasted a 22.7 percent increase in 2020 net farm income relative to 2019 estimates. Over the same time period, the median income of farm operator households was forecasted to increase 7.9 percent. Published three times a year, these core statistical indicators provide guidance to policymakers, lenders, commodity organizations, farmers, and others interested in the financial status of the farm economy. ERS’s farm income statistics also inform the computation of agriculture’s contribution to the gross domestic product for the U.S. economy in the Bureau of Economic Analysis statistics for Gross Domestic Product.
USDA funded $287.7 million towards 213 specialty crop automation or mechanization projects from 2008 – 2018At $64.7 billion, specialty crops comprised one-third of U.S. crop receipts and one-sixth of receipts for all agricultural products in 2017. Relative to other crops, many specialty crops are more dependent on agricultural labor for production, harvesting, and processing. ERS researchers identified and reviewed USDA programs that accelerate the development and use of automation or mechanization in the production or processing of specialty crops. USDA has 6 such programs in the Agricultural Marketing Service (AMS), the Agricultural Research Service (ARS), and the National Institute of Food and Agriculture (NIFA) that funded $129 million towards 213 projects from 2008 to 2018. USDA has three programs in Rural Development (RD) that funded $3.4 billion toward 280 projects from 2010 to 2018 to support the digital infrastructure needed for adopting automation or mechanization practices. Each program is designed differently to achieve unique objectives: funding for specialty crop automation or mechanization projects is only a subcomponent of each program identified. The diverse purposes, origins, oversight, and funding mechanisms of these programs have implications for how research areas are prioritized and funded.
The 2014 Farm Bill reintroduced industrial hemp production in the United States through State pilot programs. An ERS report documented outcomes and lessons learned from the State pilot programs and examined legal, agronomic, and economic challenges that would impact the transition from the pilot programs to economically viable commercial production. The study found under the pilot programs, industrial hemp planted acreage in the U.S. increased from zero acres to about 90,000 acres in 2018, the largest U.S. hemp acreage since the 146,200 acres grown 1943. However, although the numbers of planted acres and participants in the U.S. industrial hemp industry have increased rapidly since 2014, and hemp can now be grown legally in nearly every State except for Idaho, South Dakota, Mississippi, and Georgia, the longer term economic viability of the hemp industry is uncertain.
The number of licensed U.S. dairy herds fell by more than half between 2002 and 2019, with an accelerating rate of decline in 2018 and 2019, even as milk production continued to grow.By 2017, nearly 2,000 farms had herds of at least 1,000 milk cows, and those farms milked over half of U.S. cows. Twenty-five years earlier, there were just over 500 farms that size, and as a result production has been shifting to much larger but fewer farms. ERS examined the continuing structural and geographic transformation of U.S. dairy farming, identifying the financial and productive factors driving those structural and geographic shifts, and evaluating prospects for further consolidation. Larger operations realize lower costs of production, on average, and those advantages persist. Although herd size is a powerful determinant of costs and returns, there is wide variation of costs and net returns, and some farms in each size class are profitable.