Ag Economist Wants A Clearer Picture Of Farm Consolidation

An analytical summary on the 2020 Census of Agriculture is expected by the end of the year. Jim MacDonald, agricultural economist at the University of Maryland, hopes the new analysis will provide a clearer picture of how farmland continues to consolidate, while also breaking out larger farm size categories. He said the shift toward larger farms and the consolidation of acreage into fewer operations has been happening for roughly a generation at this point.

“If we're doing sales, you have to be able to adjust for inflation," MacDonald said. "And that is really tricky in agriculture because you get really different rates of inflation often for different crops. With acreage, you don't really have the inflation problem. And we also know that consolidation for almost all crops has taken the form of shifts towards fewer but much larger farms. And so we're able to get consistent data over a fairly long period of time to track that across states, counties, and across commodities. I had also been involved in running an annual large-scale farm survey for the Economic Research Service when I was there. That is drawn from the five-year census of agriculture. And I thought that we could do a lot by digging into the farm-level confidential records and summarizing in a different way what we see there. So we've used those types of records to build up to changes in consolidation for crops and for livestock, going back to, in our case, going back to the early 1980s."

Data Needs To Adjust To Larger Operations

MacDonald said there are challenges in defining large farms, particularly the 2,000-acre threshold used in USDA data. For example, he pointed out, a 2,000-acre farm may have been considered large, and rare, in 1987, but not today.

“The public data that we report for USDA generally has cutoffs of 2,000 and 5,000," MacDonald said. "And so in my summaries, I wanted to keep consistent with some of the public data that we have. So, we use 2,000 acres as a top cutoff. And of course, in the beginning, there aren't that many acres in the 2,000 and above category. By 2017, it's around 40% of all cropland acres in the United States was in farms that farmed at least 2,000 acres. That's probably grown since then. Now, we did do some work drawing out much larger operations, that is crop farms with 5,000, 10,000, up to 25,000 acres. I can tell you what we saw over that period was a corresponding large shift of acreage towards farms in say the 2,000 to 5,000 and the 5,000 to 10,000 category. We didn't see much of a shift in 25,000 acres or more. But we did do a little summary. And yes, we see a significant shift of acreage to put it 2,000 all the way up to 25,000 acres in the farm.”

Work Is Taking Longer Than Expected

MacDonald added he’s currently working on the most recent census data.

“I would have liked to have had it done by now," he said. "What I have to do is I make a request to the National Agricultural Statistics Service, the USDA. NASS has tightened its review requirements and it has a smaller staff than it used to. So it's going to take longer. I expect to get my data request fulfilled by the end of this summer or early fall. And my intention then is to turn that around pretty quickly. So I should have good information by the end of this year, the end of 2026. And I'll be speaking with the Economic Research Service, who I still work with, as to how we want to publish that sort of information. So we're working on the 2022 now, much later than I would’ve hoped.”

Many Questions Remain

MacDonald said intends to use larger farm size limits, if the data allows.

“That's what I need to talk about with my co-authors at ERS," MacDonald continued. "I have some technical issues with how NASS reports really large farms. And in particular, I'm not quite confident for the very large, 25,000 acres and above, whether I'm getting one large kind of integrated farming business or whether I'm getting combined places that have multiple farms across multiple states. I want to have good confidence before I try to write something up on the very largest farms. But we're likely, I think, to try to push what we've had into at least that 2,000 to 5,000 category and 5,000 to 10,000 and 10,000 and above, something like that. We're going to see if technically we're able to do it.”

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