Nine Takeaways From The 2022 US Census Of Agriculture

On February 13^th the USDA released the 2022 Census of Agriculture providing data about 1.9 million US farms being operated by 3.37 million agricultural “producers.” The detailed statistics and trends this special survey documents every 5 years provide key guidance for government agricultural policy and for agriculturally related business planning.

Only 1% of our population farms and not many of our citizens have a personal perspective on the true nature of modern farming. Few of us live near active farms and as the influence of the Homestead Act fades, not many people still have relatives who farm. The images of farm life we get through entertainment and food marketing tend to be romanticized or nostalgic, and many critics of modern agriculture mischaracterize the industry. Thus, this census represents a valuable window on life “down on the farm” and could inspire interest in the real life stories of some of our fellow citizens in this sector.

The census involves an overwhelming amount of data, but the main findings are well documented in an Agricultural Statistics Board Briefing available on the USDA National Agricultural Statistics Service (NASS) website. The following nine observations are based on the author’s own exploration of the data and also reflects perspective gathered from interviews conducted with Mike Parson, the Governor of Missouri (a third generation farmer himself), that state’s Agriculture Director Chris Chinn, and with Lance Honig, acting chair of the Agricultural Statistics Board at USDA NASS, who was able to provide detail on the census process and its terminology.

Observation 1: US farmland area is down a bit, but it is still a major land use category

Over the last 20 years, the area farmed has dropped from 938 million acres in 2002 to 880 million acres in 2022 including a 2.2% drop in the last 5 years. At the census data release event, Secretary of Agriculture Tom Vilsack put this into the perspective that farm productivity gains (3X since 1948) ensure that this degree of contraction isn’t a food supply problem. The loss of farm acres is partially a matter of urban and suburban development, but recently it also involves the large scale installation of solar farms.

The area reductions have been seen in cropland, pastureland and woodlands. Even so, farms still occupy an area comparable to 46% of the land area in the contiguous United States and they occupy 90% or more of a great many counties (see USDA map and table below).

Observation 2: The number of farms also continues to decline

For the census, a farm is defined as a place that produces and sells or normally would sell at least $1,000 of agricultural products. By that definition the number of farms in the US has been slowly declining from 2.20 million in 2007 to 1.9 million in 2022 and that includes a 6.9% drop since the 2017 census (see chart above). Secretary Vilsack expressed concern about the impact of this trend on small town viability, but although that issue is acknowledged by major farm state Governor Mike Parson of Missouri, Parson said that the towns in his state are managing to maintain key services like schools.

Observation 3: Farms come in many sizes, but all categories have declined to some extent

The largest number of US farms are in the 10-49 and 50-175 acre categories (see graph below), but all size categories of farms have declined in number for some time except for the smallest, 1-9 acre group which tended to increase but then dropped by 14% in the last 5 years. Some of those small farms may grow produce for local sales, be a “cow/calf operation,” or maybe what some observers call “hobby farms.” This almost certainly varies by region. Some of the decline occurs because farms are sold when there is no family member willing to take over when the working farmer is no longer able to run the operation.

Observation 4: There is an inverse relationship between farm number and farm size:

As of 2022, 85.3% of US farms were smaller than 500 acres, but 82.5% of the farmland area was in the larger farms over 500 acres (see graph below). Particularly in the main row crop regions, only a relatively large farm is financially viable and so farms have tended to expand through land purchases and by renting land – often from the descendents of farmers who no longer are involved except as the landlord.

Observation 5: Most of the total farm revenue is generated by larger farming operations

In 2022 the US farming sector had a total production value of $543.1 billion and of that 78.3% was from farms with at least $1 million in sales even though such farms only represented 5.5% of farm operations (see graph below). The value of ag production continued to be almost evenly split between the livestock and crop sectors- 48% livestock and 52% crops. Again, with typically modest profit margins and weather and market risk, larger operations tend to be more viable and better able to spread out things like the investment in equipment.

Observation 6: US farms are still mostly family businesses

One common but false narrative about US agriculture is that the consolidation that has occurred in the industry means a shift away from “family farms” to “corporate ag.” In fact, 94.7% of US farms in the 2022 census were family operated and those comprised 84% of US farmland. The risk/reward profile of farming is not a good fit with a corporate business model.

Observation 7: Farmers are getting older on average, but there has been an uptick in the number of younger and beginning farmers

The average age of farm “producers” has continued to creep up and had reached 58.1% in 2022, but the rate of increase in that measure was slower than between previous censuses. The change in age distribution is complex and must certainly involve several factors (see graph below).

Something that many find encouraging is that the number of young producers (under 35 years) has been increasing with an average gain of 3.9% for the US as a whole between the 2017 and 2022 surveys. There are significant differences state-to-state in this trend with the largest increases occurring in many of the key Midwestern row crop states (see map below). There are national and state-level programs designed to encourage young and new farmers, and the high-tech elements of modern “precision agriculture” are attractive to the younger generation.

Observation 8: A good deal of farmland is rented and that can be OK

In 2022 31% of the farmland was rented to farmers who also own their own land, and 9% was rented to tenant farmers who don’t own land. Farms that fully own their land only accounted for 35% of the total. There are several reasons why farmers often choose to expand their operations by renting rather than by buying additional land. Agland prices have been rising rapidly, and if farmers take on substantial mortgage debt they are at risk in the event of a year with bad weather or a cycle of low commodity prices. What will be increasingly important is that lease arrangements give farmers an incentive to make the investment needed to employ “climate smart” and “regenerative” farming practices which improve soil health, yield potential and climate resilience in the fields they manage.

Observation 9: A picture of those who farm

The Census gathers detailed information about “producers” – the individuals involved in various ways in the operation of US farms. The following statistics and graphs are about this producer population.

9A -Limited Diversity: 63.7% of the producers in 2022 were male and 36.3% were female. 95.4% of producers were white, 3.5% were of Hispanic, Latino or Spanish origin, 1.7% were American Indians or Alaska Natives, 0.7% were Asian, 1.2% were Black or African American, 0.1% were Hawaiian or other Pacific Islanders, and 0.9% of producers self-identified as being of more than one race.

9B -Farming Teams: More than half of US farms are run by more than one person and between 2017 and 2022 the shift continued away from single producer operations to those with several people involved (see graph below).

The census also gathered data on the range of roles that these individual producers played in the farming operation. These included day-to-day operating decisions, land use and crop selection, livestock decisions, marketing decisions, record keeping and/or financial management, and estate/succession planning.

In terms of farming experience, most of the producers (70%) had been doing this for 11 or more years, 15.7% of 6 to 10 years, and 14.3% for 5 years or less.

9C -Farmers don’t just farm… Farming is not always pursued as a full time job, and particularly for smaller farms one or more family members need to generate additional income in order to make ends meet and deal with year to year variations in production and value. Although 70.5% of producers live on the farm with which they are involved, only 42% classify farming as their primary occupation. 61 % of producers spend at least some time working off the farm and 39.7% say that their work-life involves 200 or more days of an off-farm job. In Missouri there is a state resiliency fund which is designed to help farmers be less dependent on their off-farm income, particularly during years with poor growing conditions.