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HENRYA . WALLACE INSTITUTE
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1997 r Ce FOR ALTERNATIVE AGRICULTURE
: os 9200 EDMONSTON RD_ STE 117
GREENBELT MD 20770-1551
United States
Department of
Agriculture
National Agricultural Library
FORCES SHAPING U.S.
AGRICULTURE: A BRIEFING Book
Table o f Contents
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This publication was designed and edited by ERS economist Todd Morath, based on briefings presented to USDA
policymakers and senior management by Tom Carlin (farm structure and rural economy), Joy Harwood (U.S. agricul-
tural policy); Dave Smallwood (the U.S. consumer), John Reilly (natural resources and environment, and agricultural
research and technical change), and Nicole Ballenger (U.S. agricultural trade). Jane Allhouse, John Dunmore, Betsy
Frazao, Lin Hoffman, Stephanie Mercier, Tim Osborn, and Judy Putnam made major contributions to developing the
briefings. Many other ERS economists provided charts and data, and reviews and comments.
FOREWORD
SDA’‘s Economic Research demand and the means by which protecting and conserving natural
Service welcomes the confer these preferences are revealed (or not) resources? Will new international
ees gathered in California for in global trading. Transboundary trading arrangements promote market
the 23rd meeting of the International environmental issues are increasingly access and Stability? How will the
Association of Agricultural Econo- part of international political dialogue, role of governments change? How
mists. This briefing book provides an and economists can help inform de- can the goal of global food security be
overview of trends and conditions in bate about appropriate policy inter- assured in new circumstances? The
the American food and agricultural vention. meeting in Sacramento provides an
sector, recognizing linkages and inter- important opportunity for discussing
dependencies with nations across the We enter the next century with a the contributions our profession can
globe. Viewed as an agenda for body of resilient and adaptable eco- make toward informing public and
disciplinary research, the topics cov- nomic theory that has evolved over private decisionmaking. I/t is our hope
ered in the book clearly transcend the some 250 years. As applied econo- that this briefing book contributes to
traditional boundaries of “agricultural” mists, we will be among the first to the richness of that dialogue.
economics. Farm level production know whether it also provides an
issues remain of paramount impor- analytical framework for understand-
tance in assessing food supply re- ing the challenges ahead. As the
sponse, of course, but changing material in this book aptly demon- Susan Offutt, Administrator
population demographics and market strates, there will be no shortage of Economic Research Service
arrangements require analyses that questions to be answered. Will the U.S. Department of Agriculture
probe complex determinants of food world be able to feed itself while July 1997
arm Hei perssa re aed to
continue declining PatequotTE oes esis that of all U.S. households.
percent a year ‘for the.r est af Fatm households, on average, depend economy Warm anye ae areas. The
the decade, reaching i.6 to.a 7. mil- more on; income eel oft-farm extractive value of natural resources
lion by the year 2000. Arr:i ncreasing segeyyrées than fr is being eclipsed, by the amenity
share of U.S. food and fiber1 BSe ast a value. Rural aréas are increasingly
viewed as desirable places in which to
recreate, Jetire, and reside.
portunities in rural areas, and readily
available higher paying jobs in urban
Farm Size Increased From 1930 to 1992 areas led to major migration of hired
workers, sharecroppers, tenants, and
As Farm Numbers Declined From Their 1935 Peak
operators of small marginal farms to
Number of farms (in millions) Acres per farm
urban America. Fewer farm youth
600
entered farming resulting in an aging
Acres pe‘r Nfaerm of the farm operator population.
e The “seeds” of the “rural turn-
around” that occurred in the 1970s
were actually sown during the 1950s
as manufacturing firms began to shift
production facilities out of urban
areas. While rural nonfarm jobs were
expanding, this job growth was insuf-
ficient to absorb workers leaving
farming.
: 7 . 100
1930 1935 1940 1945 1950 1954 1959 1964 1969° 919/745) 197658 1982 t987" 1992
e Expanding rural nonfarm job
Census Year
opportunities gained steam during the
1960s and 1970s mitigating the out
Prepared by the Rural Economy Division,
Economic Research Service, USDA,
migration by facilitating part time
using Census of Agriculture
farming. Off-farm income eventually
contributed to narrowing the income
Farm Numbers Will Continue gap between farm and nonfarm
e Farm numbers declined the households. Strong entry of young
to Decline
fastest during the 1950s and early farmers during the boom years of the
e Farm numbers have declined 1960s. Mechanization allowed for late 1970s stabilized farm numbers
from the high of 6.5 million in 1935 the substitution of capital for labor, for a short time, but lower entry since
to about 2 million today. Fewer improving labor productivity and the 1980s farm crisis continued the
farms implies larger farms since land favoring farm consolidation to achieve decline.
in farms has remained near 1 billion lower per unit production costs. Low
acres over the period. farm incomes, few nonfarm job op- a Farm numbers are expected to
decline by about 2 percent or less
a7,
Farm Structure & Rurai Economy
annually for the rest of decade, reach- percent of all sales came from 2.2 into the 21st century. Large commer-
ing 1.6 to 1.7 million by 2000. The — percent of farms. These large com- cial farms are expected to increase in
decline in farm numbers is not a mercial farms have annual sales of number and will likely be 3.5 percent
threat to the Nation's food supply. $500,000 or more. [Source: 1993 of all farms by the end of the decade.
Labor productivity on farms continues USDA Farm Costs and Returns Sur- The number of small commercial
to Increase. Younger farmers gener- vey] farms is expected to decline. Still,
ally operate larger and more efficient the farm sector is much less concen-
farms than do older farmers whom ° The trend towards increasing trated than are other sectors of the
they replace. Thus, fewer farmers concentration of production among U.S. economy.
can continue to produce the Nation’s — fewer farms is expected to continue
food and fiber.
Most Food and Fiber Comes
Fewer Farms Will Produce
From Relatively Few Farms
Most Food and Fiber ner
100
e An increasing share of U.S.
food and fiber IS being produced on Noncommercial - Less than $50,000 in farm sales
Small commercial - $50,000 to $99,999 in farm sale
fewer and fewer farms. In 1940, eitcomares bee $499,999 taneaee
11.6 percent of all farms (689 thou- Large commercial - $500,000 or more in farm sales
sand) accounted for one-half of all
sales of agricultural commodities from
U.S. farms. By 1992, the proportion
had dropped to 3.2 percent (62 thou-
sand farms). [Source: Census of
Agriculture]
e A recent profile of U.S. farms Non. Com.
shows that 73 percent of all farms
reported sales of less than $50,:0 00. El] Farms Wl Sales
These non-commercial farms con-
trolled 33 percent of all acres oper- Prepabyrt heed Ru ral Economy Division,
ated and 10 percent of total farm uEscionngo m1i9c9 3 ReFasrema rcCho sStesrv aincde , ReUtSuDrAn,s Survey
sales. In sharp contrast, about 39.6
Large Commercial Farms
Expected to Increase
Percent of Farms
100
Prepared by the Rural Economy Division,
Economic Research Service, USDA
—6= Farm Structure & Rural_Economy
