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
Aug 23, 2024 - Record Yields Projected
- 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.
- Heat waves are lingering for longer periods, exacerbating the harmful effects of extreme temperatures, The New York Times reports, citing a recent study published 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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