Sizing it up
Ken Kunz says that life is good. He's content to be on the home farm near Elmwood, Nebraska, where he and his wife, Chris, are raising their two children.
He's grateful for last year's ample crops and thankful for the cushion of current commodity prices.
Kunz doesn't predict the future, but he's sure about one thing. “Things aren't going to stay this good for long,” he says.
Kunz, 44, graduated from high school during the heart of the 1980s farm debt crisis and one decade after Secretary of Agriculture Butz used the bully pulpit to admonish farmers: “Get big, or get out.”
With help from his family, he gained a foothold in farming. In the 1990s, along with other farmers, he was propelled forward by a tide of advances in crop-production inputs, laborsaving machinery, and technology. As a new market for ethanol emerged in 2000 and government-subsidized crop insurance shaved production risks, he's seen farm size spike.
Kunz pegs his operation – about 1,200 rented and owned acres – on the upper end of small. “The cost of land and the competition for land from larger farmers are our biggest challenges,” he says.
Kunz is not alone. The number of very large U.S. farms (over $500,000 in inflation-adjusted annual sales) has grown sharply. So has the share of production.
Simmering beneath the surface of any discussion about the structure of agriculture is a debate about farm size. The rhetoric typically generates more heat than light. Is there any middle ground?
Successful Farming magazine surveyed farmers to see how they measure up. The AgAdvisor study reveals that 52% rank themselves as small; 41% say they're midsize. Only 7% say their operation is large.
“A lot of the perception of size is shaped by neighbors and how much they farm,” says Michael Duffy, Iowa State University ag economist. “A big farmer is someone bigger than you.”
Large farms, as defined by USDA, have gross incomes of $250,000 to $1 million. They represent about 12% of farms and over 80% of production. A new USDA counting method shows growth in the smallest farms (income under $10,000).
The number and market share of all other farms has declined. Midsize farms – too small to compete in consolidated commodity markets and too large and commodity-driven to direct-market – persevere, often with off-farm income. On over half of small commercial farms (under $250,000 gross income), the operator or spouse works off-farm.
The low large-farmer perception in the survey may be tied to the finding that 70% farm with two or more generations. Their acres, set apart from the total unit, may not seem large.