Tuesday, July 20, 2010

Profitability of US Farm Sector

Another NRC factoid:

" Statistics on the aggregate profitability of the U.S. farm sector disguise considerable variation in the economic performance of individual farms. For example, in 2007, only 47 percent of all U.S. farms reported positive net farm income, a drop from 57 percent of all farms in 1987. Most farms that lost money were relatively small operations that relied principally on nonfarm sources of income. Most farms in the United States are essentially family businesses that rely mainly on farm family members for their labor force (Gasson and Errington, 1993; Hoppe et al., 2007), and the majority of farm families also gain income from off-farm work. Nonfarm work or transfer payments are commonly used to supplement income from the farm business. The proportion of farm operators who work off-farm increased from 44 percent in 1979 to 52 percent in 2004. The proportion of spouses working off-farm grew from 28 percent to 45 percent during the same period (Fernandez-Cornejo et al., 2007). The contribution of off-farm income to the total household income of U.S. farmers rose from about 50 percent in 1960 to more than 80 percent in 2004 (Fernandez-Cornejo et al., 2007).

Source: Committee on Twenty-First Century Systems Agriculture, "Toward Sustainable Agricultural Systems in the 21st Century", National Research Council, 2010, p. 68, http://www.nap.edu/catalog/12832.html

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