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 2017 was 57.
Contract Farming Declines
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 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.
- About 98% of farms are owned by farm families where the family owns and/or operates the farm and has done so for generations.
- 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 68% 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.
- Approximately 89% of family farms and 46% of non-family farms are sole proprietorships.
Industry Forecast
Crop Production Industry Growth
Recent Developments
Jun 23, 2024 - Commodity Prices Are Falling
- The producer price index for commodity farm products, which measures prices before reaching consumers, declined 3.4% in May compared to a year ago and was down 12% from the previous annual comparison, according to the latest US Bureau of Labor Statistics data. While producer prices have fallen sharply from their peak in May 2022, they remain high by historical standards. The prices received by farmers index for all crops sank 15.8% in March year over year, while the prices paid by farmers index for all crops fell only 2.5%, according to the latest data from the USDA.
- Extreme weather events across the US are taking a toll on corn and soybeans, the nation’s two largest crops, according to the USDA’s June 17 Crop Progress report. The amount of corn currently in good or excellent condition is 72% (down from 74% the prior week), while the crop in poor or fair condition is 27% (up from 25%). Soybeans saw a similar trend, with 70% in good or excellent condition (down from 72% last week) and 29% in poor or fair condition (up from 27%). Serious flooding in South Dakota and Minnesota is affecting farms in both states, with high temperatures forecast for the peak growing season. Elsewhere, massive hail storms have damaged crops in Nebraska. Moreover, many meteorologists predict more challenges will arise as extreme heat sets in across the country. In June, the USDA released its updated Climate Adaptation Plan to promote climate resilience in agricultural production.
- Heat waves are lingering for longer periods, exacerbating the harmful effects of extreme temperatures, The New York Times reports, citing a study published in March in the journal Science Advances. Fueled by global warming, heat waves have increased in frequency, intensity, and duration across many parts of the globe during the past decades, according to the study, with serious consequences for crop and animal production. Between 1979 and 2020, the rate at which heat waves travel slowed by about 5 miles per day, the study found. Heat waves also now last about four days longer on average. Life-threatening heat waves dry out soil and vegetation, harm crops, and raise the risk of wildfires. Among the first to track how heat waves move through space and time, the study attributes the changes largely to human-caused climate change and natural climate variability.
- The newly-released 2022 Census of Agriculture (COA) finds the number of farms and ranches in the US fell to 1.9 million (down 7% from 2017), extending its downward slide, according to the USDA’s National Agricultural Statistics Service. US farms and ranches produced $543 billion in agricultural products in 2022, up from $389 billion in 2017. With farm production expenses of $424 billion, US farms had net cash income of $152 billion while average farm income rose to $79,790, per the COA. A total of 43% of farms had positive net cash farm income in 2022. Family-owned and operated farms accounted for 95% of all US farms. The COA also shows that farms with internet access continued to rise from 75% in 2017 to 79% in 2022. The average age of all producers was 58.1, up 0.6 years from 2017, a smaller increase than between prior censuses.
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