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PLAIN ECONOMIC SENSE

For release Sept. 13, 1999

Column 380

How Many Farms Are Left in the U.S. and Iowa?

By Mark A. Edelman
Extension Public Policy Economist
Iowa State University Extension to Communities

The 1997 Census of Agriculture is now published-- and out-of-date. I say that because a lot has happened during the last two years since the Ag Census was taken. But it does provide a snapshot of interesting information in light of the media and political frenzy regarding the "financial hemorrhaging" of the nation's farms.

One factoid generated by Census data is that all farms are not necessarily commercial farms, depending on the definition. If true, then it also holds that all farmers are not necessarily in the same boat regarding "financial hemorrhaging." Yet, we talk about farmers as if they were all the same.

How many farms? It depends on the definition. According to the Census, there are now 1.9 million farms in the U.S., but that doesn't tell the whole story because the Census Bureau still defines a farm as any entity that sells more than $1,000 of agricultural products. A lot of 4-H projects can be classified as farms because they annually generate more than $1,000 in sales.

How many part-time and hobby farms are counted? A few years back some analysts started separating farms into size groups according to value of gross agricultural sales. Those with gross sales above $50,000 were considered commercial and those that were below $50,000 were considered part-time or "hobby" farms. Why? Nearly all of the farms with gross sales below $50,000 must depend on off farm sources of income for a majority of their family income.

Using the $50,000 definition of a commercial farm, 73.6 percent or 1.407 million of the nation's 1.9 million total number of farms are part-time or hobby farms--not commercial farms. These farms generated only 6.8 percent of the agricultural products sold. So only 504,000 farms nationally are large enough to be considered full-time commercial farms according to the $50,000 in sales definition of a commercial farm.

How many farms in Iowa? The 1997 Census of Agriculture counted 90,792 farms with more than $1,000 in agricultural sales. However, 50.2 percent of these or 45,600 farms of the total are part-time or hobby farms using the $50,000 definition in gross agricultural sales for consideration as a commercial farm. The part-time farm group generated 5.5 percent of Iowa's agricultural sales.

So, in Iowa, there were 45,200 commercial farms according to the in 1997 Census of Agriculture. This means the average Iowa county now has less than 500 full-time commercial farms selling more than $50,000 in agricultural products per year.

How many mega-farms are there? Because of the recent concerns over food industry integration and consolidation of farms, many analysts break the commercial farms down further into mega-farms, mid-size farms and smaller farms. The mega-farms generate more than $500 thousand in agricultural sales per year. There are 68,794 mega-farms in the U.S. using this definition. These mega-farms represent only 3.6 percent of the total number of U.S. farms but account for 56.6 percent of agricultural sales. The mid-size commercial farms with $250,000 to $500,000 in sales represent 87,700 farms or 4.6 percent of the total farms but generate only 15.5 percent of the national sales. The smaller commercial farms with $50,000 to $250,000 in agricultural sales represent 347,600 farms or 18.2 percent of the total farms, but account for 21.1 percent of the national sales.

How many mega-farms are in Iowa? In Iowa, 3,933 farms or 4.3 percent of the state total generate more than $500,000 in sales. This represented 36.2 percent of the 1997 statewide sales of agricultural products by farms. The mid-size commercial farms with sales between $250,000 and $500,000 represent 8,404 more Iowa farms and they account for 24.1 percent of the agricultural sales of the state. When these two groups are combined, the data show that 12,337 Iowa farms account for 60.3 percent of the state's agricultural sales. The smaller commercial farms with sales of $50,000 to $250,000 represent another 32,854 farms or 36.2 percent of Iowa's total number of farms. This group, in turn, accounted for another 34.2 percent of Iowa's agricultural sales, according to the 1997 Census of Agriculture.

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