Changing Family Farms in the U.S.

Dairy Farms

Abstract

The concept of family farms in the U.S., which flowed from the Jeffersonian Model, have changed over time, and now is composed of just two elements ; property farm business and management. The USDA currently defines nonfamily farms as farms owned by nonfamily corporations or cooperatives, and farms with hired managers. Otherwise, all other farms are defined as family farms. The latest concept change came about in the mid 1970’s. Since that time, farms with more than 1.5 hired workers can be considered family farms.
Current U.S. agriculture is characterized as having a “dual structure,” which means there a small number of very large farms that dominate production and a large number of small farms with less overall production. Also, nonfamily farms were 4.1% of all farms in 2007. Middle size farms in terms of farm income (market value of agricultural products sold and government payments) exist more in grain and dairy farming when compared to other crops and animal farms.
Dairy farms have expanding rapidly for the last one and a half decade, while milk production in the U.S. increased nearly 30%. The “Dual structure” pattern is emerging even in the dairy sector. Dairy farm size structure is different between traditional dairy states and newly established dairy states. Wisconsin is representative of traditional dairy states and California is representative of newly established dairy states. In Wisconsin small/middle farms (with less than 200 milk cows) comprised 90% of dairy farms and produced more than 50% of Wisconsin’s milk production in 2007. In California the 70% of dairy farms that have with more than 200 milk cows produced 99% of California’s milk. In California 30% of dairy farms have more than 1,000 milk cows and their share of milk production is over 70%. From statistical data about farm finance, dairy farms with around 200 milk cows hired on average 1.7 employees full time, and earned a net farm income 3 times more than the median household income of the U.S. in 2007. Dairy farms with more than 500 cows hired as many as 10 full time workers, and earned a net farm income 19 times bigger than the median household income of the U.S. in the same year. When examining the same data for California, because it reflects the farm size component, expenses for hired labor was 13.2 full time workers and net farm income was more than 25 times the median household income. Even so, their profitability is not stable.
Dairy farms with less than 200 milking cows are still likely to fit into the family farm definition in the mid 1970’s, and this mainly remains the case in traditional dairy states. Dairy farms with more than 500 milking cows surely have a corporate character from an economic aspect. They have located in new dairy states, and are growing in traditional dairy states.