The Evolving Landscape of American Agriculture: Experts’ Perspectives

Part two of a seven part series — Fields, Finances and the Future

As American agriculture continues to evolve, a number of factors are coming into play to alter its very structure. These trends, ranging from global competition to field-level innovations, are reshaping farm profiles and demanding heightened attention from the men and women who run them.

Mac Marshall, VP of Market Intelligence for the United Soybean Board, and Darrell Holaday, President and Analyst for Advanced Market Concepts, recently offered valuable perspectives on the transformation taking place across the rural landscape with all sizes of farms facing a myriad of opportunities and challenges.

Marshall emphasizes that the majority of farms in the U.S. remain small family-owned operations, stating.

“When you look at the data, you see the majority of farms in the U.S. are still relatively small family-owned operations. About 75% of farms in the United States have less than 100 acres of land.”

Those are likely not full-time, commercial-scale farms. USDA defines a farm as “any place that produced and sold—or normally would have produced and sold—at least $1,000 of agricultural products during a given year.” Both experts acknowledge the trend toward increasing farm sizes as one driven by advances in technology, mechanization and other issues. According to the USDA, the average farm size in the United States has increased from 179 acres in 1940 to 446 acres in 2022. Putting that into context, depending on the crop and type of operation, 446 acres would still be very small for row-crop commodity farm.

“As the agriculture sector has become more technologically advanced, as it’s become more mechanized, we have seen an increase in the size of the average farm,” Marshall said.

It takes more acres to generate revenue to support more expensive equipment and technology.

“There’s just so many factors that have driven us toward larger farms on the production side,” Holaday said. “With the exception of a few specific cases, I think it’s going to continue. The adoption of advanced technologies, particularly in machinery, requires significant capital investment that can only be spread over a large number of acres. Larger farms have more resources to comply with regulations and meet demands for larger-scale sustainable practices that benefit the environment and meet the growing demand for responsibly sourced agricultural products. Striking a balance between regulations and (voluntary) sustainable practices is crucial for the long-term success of the agricultural sector.”

The two economists agree that specialization has occurred with the effect of increasing farm size, but Holaday sees a braking point.

“In the areas of specialization and the further processing…I think we have hit a level of concentration where we’ll actually see those areas become a little more competitive,” he said. “There is an avenue for small producers.

USDA statistics show that farm income levels run the gamut, with the average value of production from the 2 million U.S. farms amounting to $203,391. However, few farms are near the average; half of the farms had production valued at $7,900 or less, while 69 percent of all production occurred on farms with at least $1 million of agricultural output.

Marshall said statistics show that smaller farms tend to be more diverse, growing a variety of different crops and many support livestock as well. Despite the trend toward larger farms, both experts acknowledge opportunities for smaller producers.

Holaday said a number of smaller producers are exploring opportunities such as value-added processing, identity-preserved grain merchandising, local sourcing, and meat processing, all areas that offer potential opportunities for growth and success.

Marshall said smaller producers often are better able to meet specialized consumer demands, however “understanding consumer preferences is essential for both large and small American farmers and ranchers to meet market demands effectively.”

While small farmers may have an advantage locally, most agricultural experts say that recognizing consumer demand for products that align with broader societal values, such as sustainability, presents market opportunities for all farmers, regardless of their farm’s size.

The agricultural economy can be a bumpy road, but through innovation, optimism and a spirit of resilience, America’s farmers are poised for the challenges and opportunities that lie ahead. Stratovation Group can help your company or organization strengthen your connection with farmers through research-informed strategies and consulting services. If interested in hearing more connect with Cam Camfield at [email protected].

Next Up Part Three: The Melting Pot of the Ethics, Incentives, and Regulations of Ag Stewardship and Sustainability