Farm Consolidation Occurs With Or Without Commodity Programs, Analysis Shows

    Grain bin view of corn field. ©Debra L Ferguson

    Agricultural production continues to shift to larger farms. Consolidation is widespread across almost all crop and livestock commodities, it has proceeded at persistent rates over the period from 1982 through 2017, and the aggregate shift has been quite large. At the same time, family farms still account for the vast majority of farms and of farm production, with no movement of production toward nonfamily operations. Consolidation encompasses shifts of production to larger family businesses.

    How much consolidation has occurred?

    In the new article published by the Agricultural & Applied Economics Association, “Tracking the Consolidation of U.S. Agriculture”, James MacDonald from the USDA-Economic Research Service releases a decade of research on the topic.

    “The finding that consolidation has been widespread across commodities and persistent over time implies that farm commodity programs cannot be a dominant driver of consolidation, since commodity programs focus on field crops, and not on specialty crops or livestock,” says MacDonald. “Yet the pace of consolidation has been quite similar in fruits, vegetables, field crops, and livestock. The widespread and persistent pace suggests that technology plays and important role in consolidation. In particular, the introduction and diffusion of labor-saving equipment, materials, and organizational changes allow a single farmer or farm family to manage more acres or more animals.

    “The persistent trend in consolidation calls into question some earlier modeling that argued that consolidation resulted from the exit of farmers and farm labor in search of higher earnings outside of agriculture.”

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