U.S. agriculture and food sectors are key drivers of economic growth, producing $2 trillion in annual revenue and $130 billion in profit for more than 2.6 million businesses.The agriculture and food sectors employ 19 million people in full and part-time jobs, 9 percent of total U.S. employment in 2013. On-farm employment provided more than 2.6 million of these jobs. Food services and restaurants and bars accounted for the largest share, 11.1 million jobs.1
U.S. consumers benefit from this success with year-round access to safe, nutritious and affordable foods. The average U.S. consumer spends just six percent of their household income on food eaten at home, the lowest percentage among 86 major countries.2
U.S. agriculture is also a reliable source of affordable safe food and agriculture products for the world. The U.S. exported $141 billion in agricultural products in fiscal year 2017, the third highest level recorded, and had an agricultural trade surplus of $22 billion, a 30 percent increase from 2016.3
The Seeds of Success
Most of the success of U.S. farmers and ranchers can be attributed Total Factor Productivity (TFP) growth generated by the widespread adoption and efficient use of seed technologies, precision mechanization and best practices for soil health, nutrient management and animal health.
For the past 65 years, U.S. agriculture has been a global leader in TFP and output growth. From 1949 to 2015, TFP grew by an average annual rate of 1.38 percent.5 Agricultural output has tripled, even as farmers and ranchers have reduced their labor use by 75 percent and land use by 24 percent.6
Wider use of irrigation has allowed the farm sector to increase total output using less land.7 Irrigation systems help farmers in areas with challenging and variable weather conditions stay productive during dry seasons and drought.
As tractors, tillers, planters and other equipment for crop production became the norm for U.S. farmers, less labor was needed for cultivation and harvesting. In 1970, a farmer could plant 40 acres of row crops and harvest 4,000 bushels per day. With the advent of precision mechanization technology, by 2005, a farmer could plant 420 acres and harvest 30,000 bushels in a single day.8
Further efficiencies have been created through farm consolidation, particularly in crop production. In 2012, 36 percent of all cropland in the U.S. was on farms of 2,000 or more acres, up from 15 percent in 1982.9 In 2015, 51 percent of the value of U.S. farm production came from farms with at least $1 million in sales.10
Much of the decrease in agricultural land use is due to enrollment into the Conservation Reserve Program (CRP), the largest federal program providing financial compensation to landowners for voluntarily removing land from production for an extended period. Created in the 1980s, the CRP allows farmers to put less productive land aside for conservation purposes, such as pollinator and wildlife habitats. This leaves the most productive land available for cultivation and raises the contribution of TFP to overall output.
Underpinning all this progress is the collaborative system of public and private agricultural research and development (R&D) that has created the technologies that make the U.S. a productivity powerhouse. Public extension services and private-sector agricultural dealers have brought innovations and best practices to farmers and ranchers from coast to coast, increasing their opportunities for success.
Farming is a Family Business
While the U.S. is known for its highly productive commercial agriculture sector, USDA’s report on America’s Diverse Family Farms, shows that American farms come in all shapes and sizes.
Half of all farmland is used by small family farms, defined as farms with an annual gross cash farm income (GCFI) of less than $350,000.11 On 42 percent of small farms, the principal farm operator has a major occupation other than farming and another 18 percent are run by retired large-scale farmers who are continuing to farm on a smaller scale.
While small farms are less profitable than their larger competitors, they provide the fresh, local produce that customers are increasingly purchasing at farmers markets and grocery stores.
An Uncertain Season for U.S. Producers
The financial pressures farmers are facing are compounded by the uncertain future of U.S. trade relationships. Changes to the North American Free Trade Agreement (NAFTA) and the tariffs imposed by China have created disruption for a sector of the economy that thrives on advanced planning and predictable markets.
Drought, extreme weather events and rising sea levels, exacerbated by climate change, are transforming the practice and business of agriculture in fundamental ways.
Farmers need technologies and knowledge that will enable them to maximize the productive potential of their farms, thereby controlling costs and preserving their economic viability. Public investments in agricultural R&D are the foundation for the innovative technologies and practices, but U.S. public-sector investments in agricultural R&D have been stagnant for two decades, slowing the pipeline of new innovations.
The next generation of agricultural technologies, such as gene-editing and precision systems, hold significant promise for helping farmers deal with the economic and environmental uncertainties they are facing. But public acceptance of these technologies is still evolving. Most consumers are several generations removed from farming and are not familiar with agricultural production methods. Bridging the “trust gap” between consumers and producers will be essential to the productivity and sustainability of American agriculture.
Faced with these uncertainties, farmers are finding ways to innovate and adapt on their own farms. Young agri-preneurs, universities and agribusinesses are using all their ingenuity to create and disseminate the innovations that will enable U.S. agriculture to adapt, survive and thrive in the twenty-first century.
America’s Disappearing Farm and Range Land
U.S. agricultural land is some of the most productive and expensive in the world.
More than 31 million acres of U.S. agricultural land have been irrevocably lost to urban expansion since 1982 and an additional 175 acres of farm and ranchland are lost every hour to make way housing and other industries.Keep Reading