Crop Production
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 964,770 crop farms in the US produce more than 382 million acres of commercial-scale grains, sugar, fruits, nuts, vegetables, and ornamental crops. The establishments that produce these are generally considered farms but, depending on the commodity produced, may be more specifically known as orchards, groves, greenhouses, and nurseries. About 25% of crops are grown as seed or as input for other crops or livestock.
Aging Farmer Population
The average age of a US farmer in 2022 was 58.
Contract Farming Declining
The process by which a buyer, typically a food processor or supermarket chain, establishes an agreement with a farm to produce a certain quantity and quality of a given crop in exchange for an agreed-upon price and a given delivery date, known as contract farming, is on the decline in the United States.
Industry size & Structure
The average crop farm has two employees and generates about $291,000 in annual revenue.
- The US Census Bureau defines a farm as an operation that produces or should have reasonably produced over $1,000 in revenue during a given year, including government payments. Under this definition, there are about 964,770 crop farms in the US.
- Crop farms produce about $280 billion in value annually, with corn and soybeans accounting for more than half of US crop cash receipts.
- Family-owned and operated farms account for 95% of all US farms and 84% of farmland.
- Over 2.5 million are employed in the crop sector and over 45% of employees are family members.
- Small family farms (less than $250,000 in annual sales) make up 88% of US farms and hold 51% of all farm assets.
- Large farms (more than $1 million in annual sales) account for 78% of the production value.
- Over 17,000 crop farms are certified as organic, for a total of 4.9 million certified organic acres. These farmers sell about $6.1 billion in organic crops annually. Marketing of organic products is primarily to food wholesalers (60%) and consumers (30%); the remainder is to food retailers.
- 35% of US farms fully own their land; 31% is rented to farmers who also own their land, and 9% is rented to tenant farmers who don’t own land.
- Nearly 80% of farms in the US have Internet access.
Industry Forecast
Crop Production Industry Growth
Recent Developments
Oct 23, 2024 - Helene Slams Georgia Crops
- Hurricanes are taking a heavy toll on US crop production, with preliminary estimates for the economic impact of Hurricane Helene to Georgia agriculture alone topping $6 billion, according to the University of Georgia College of Agricultural and Environmental Sciences. State officials said the heaviest storm-related losses were in timber, pecans, and horticulture. It's estimated that 420,000 pecan trees were lost to the storm. Cotton also took a hit with Helene destroying one-fifth of the state’s crop, according to the USDA’s monthly Crop Production report. The department estimated that growers would harvest 1.65 million bales of cotton, down by 400,000 bales from a pre-hurricane estimate. North Carolina’s cotton crop was estimated at 700,000 bales, down 7% due to the hurricane. “Georgia and North Carolina accounted for much of the reduction as high winds and heavy rain pummeled open bolls,” according to a USDA report.
- US corn and soybean farmers could lose billions of dollars in annual production value should a new tariff-induced US-China trade war occur, according to a new study commissioned by the American Soybean and the National Corn Growers associations conducted by the World Agricultural Economic and Environmental Services. The study states “US soybean farmers (could) lose an average of $3.6 to $5.9 billion in annual production value” while “US corn farmers (could) lose an average of $0.9 to $1.4 billion in annual production value” depending on how China responds to increased US tariffs. A new trade war could cause US crop prices to fall, dramatically reduce US exports to China, and benefit growers in Brazil and Argentina, according to the study. Former-president Trump has proposed tariffs as high as 20% on all imported goods, which, if enacted, could trigger a trade war.
- 2024 is shaping up to be a big year for crop production, with corn, soybeans, and other spring wheat projected to have record and above-trend yields this year, according to the latest reports from the USDA. The agency’s August Crop Production Report and World Agricultural Supply and Demand Estimates – the first of the year to estimate yields for corn and soybeans based on farmer surveys and satellite imagery – project corn yield at a record 183.1 bushels per acre nationally, up 5.8 bushels (3.3%) from last year’s record yield and 2.1 bushels above trendline estimates. New crop corn production is estimated at 15.15 billion bushels, which, if realized, would be the third-largest US corn crop on record. Soybean production is projected to be a record 4.59 billion bushels, a 10.2% increase over 2023 and a 3.5% increase over July’s projections.
- Projected large crop yields, if realized, are expected to put further downward pressure on already low commodity prices, Farm Bureau reported in August. The USDA’s latest 2024 production estimates for corn, soybeans, cotton, and wheat are higher than last year. While the larger crop is expected to return commodity prices to levels unseen in four years, production costs have continued to climb. The USDA estimates put the per-acre cost-of-production increase between 24-29% for corn, soybeans, wheat, and cotton between 2020 and 2024. Elevated input prices and falling commodity prices put the squeeze on farmers, many of whom will be losing money on their 2024 crops, according to Farm Bureau.
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