United States Department of Agriculture • Animal and Plant Health Inspection Service • Safeguarding American Agriculture 

Veterinary Services 

Centers for Epidemiology and Animal Health February 2012 

_________________________________________________________________________________________________________________________ 

Factors Affecting Planned Farm 

Exits for Small-scale U.S. 

Livestock Operations 

The purpose of this technical brief is to compare 

characteristics of operations in which the operator 

expected to stay in farming with operations in which 

operators expected to leave farming, and to examine 

factors that influence the decision to continue or leave 

farming. 

According to the Economic Research Service (ERS), 

about 9 to 10 percent of all U.S. farms go out of 

business in the United States each year, which is similar 

to the percentage of nonfarm small businesses that go 

out of business. 

ERS research shows that farms are less likely to exit 

farming as farm sales increase and that beef cattle 

operations are less likely to exit than cash-grain farms or 

hog farms. Farmer demographics such as race and age 

also play a role in farm exits (Hoppe and Korb, 2006). 

These ERS findings apply to all U.S. farms and are not 

specific to small-scale operations. 

The U.S. Department of Agriculture’s National 

Animal Health Monitoring System conducted the Smallscale U.S. Livestock Operations, 2011 study. The study 

focused on operations that raised livestock and had 

gross annual sales from $10,000 to $499,999. Livestock 

included cattle, poultry, goats, sheep, swine, horses, 

aquaculture, and other farm animals raised for sale or 

home use. For the study, 8,123 small-scale operations 

from all 50 States1

 were surveyed. To investigate farm 

exits for this subset of U.S. farm operations, operators 

who participated in the study were asked if they 

expected to continue farming over the next 5 years. 

 

1

States/Regions: Regions were based on Sustainable Agriculture 

Research and Education regions: 

North Central: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, 

Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin 

Northeast: Connecticut, Delaware, Maine, Maryland, 

Massachusetts, New Hampshire, New Jersey, New York, 

Pennsylvania, Rhode Island, Vermont, West Virginia 

South: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, 

Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, 

Texas, Virginia 

West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, 

Montana, Nevada, New Mexico, Oregon, Utah, Washington, 

Wyoming. 

Farm exits 

Overall, 10.6 percent of the operators for small-scale 

livestock operations expected to leave farming in the 

next 5 years (table 1). 

Table 1. Percentage of operations in which the primary 

operator expected to leave farming in the next 5 years, by 

region 

Percent Operations 

Region 

North 

Central Northeast South West 

All 

operations

10.7 10.4 10.5 11.2 10.6 

A higher percentage of operators for low-sales 

operations expected to leave farming in the next 5 years 

compared with operators of high-sales operations (10.9 

and 5.9 percent of operations, respectively) [table 2]. 

Table 2. Percentage of operations in which the primary 

operator expected to leave farming in the next 5 years, by 

farm sales 

Percent Operations 

Farm Sales (gross annual sales)

Low 

(less than $100,000)

Medium ($100,000–

$249,999

High ($250,000– 

$499,999)

10.9 8.6 5.9 

Factors affecting farm exits—primary operator 

demographics 

The percentage of operations in which the operator 

expected to leave farming in the next 5 years differed 

based on operator demographics as well (table 3). 

Overall, 37.1 percent of small-scale livestock operations 

had an operator who was 65 years of age or older. Of 

operations in which the operator was 65 years of age or 

older, almost 2 of 10 (18.3 percent) expected to leave 

farming in the next 5 years, compared with only 4.5 

percent of operations in which the operator was less 

than 45 years old. 

Operators who had higher levels of formal education 

were less likely to expect to leave farming than operators 

with less formal education. 

For U.S. farms of all sizes, Hoppe and Korb (2006) 

found that Black operators were more likely to exit 

farming than White operators (based on data from the 

Technical Brief
United States Department of Agriculture • Animal and Plant Health Inspection Service • Safeguarding American Agriculture 

Census of Agriculture). However, they also found that 

the gap in exit probabilities between Black and White 

operators had decreased since the 1980s. The NAHMS 

study did not find a statistically significant difference by 

gender or race in the percentage of operations in which 

the operator expected to leave farming in the next 5 

years (table 3). 

One explanation for the difference between Hoppe 

and Korb’s findings and those from the NAHMS study is 

that some race categories in the NAHMS study had 

small sample sizes, which reduced the study’s ability to 

detect significant differences by race. An alternative 

explanation is that the decreasing gap in exit 

probabilities observed from the 1980s to 1997 has 

continued and exit probabilities for farms operated by 

Blacks and Whites are now similar, at least in the case 

of small-scale livestock operations.

Table 3. Percentage of operations in which the primary 

operator expected to leave farming in the next 5 years, by 

operator characteristic 

 

Operator characteristic 

Percent 

operations 

Age (years) 

Less than 45 4.5 

45–64 6.5 

65 or more 18.3 

Gender 

Male 10.3 

Female 12.9 

Race 

White 10.6 

Black or African American 7.3 

American Indian or Alaska Native 8.5 

Asian, Native Hawaiian, other Pacific 

Islander, or multiracial 10.8 

Highest level of formal education 

Less than high school diploma 17.9 

High school diploma or equivalent (GED) 11.9 

Some college 

(included associate degree) 9.9 

College graduate and beyond 6.8 

Factors affecting farm exits—operation 

characteristics 

Operators that used a veterinarian or had a 

household member who earned income from an off-farm 

job were less likely to leave farming in the next 5 years 

(table 4). Only 4.4 percent of operations that raised four 

or more livestock species had operators that expected to 

leave farming in the next 5 years, compared with 13.5 

percent of operations that raised only one livestock 

species. Similarly, operators on operations with fewer 

total livestock species and/or crops combined were more 

likely to leave farming in the next 5 years. 

Table 4. Percentage of operations in which the primary 

operator expected to leave farming in the next 5 years, by 

operation characteristics 

Operation characteristic 

Percent 

operations 

Number of livestock species1 

on operation during the previous 

12 months 

1 13.5 

2 8.1 

3 6.6 

4 or more 4.4 

Total number of species/crops2 raised 

during the previous 12 months 

1 17.0 

2 11.9 

3 9.4 

4 or more 6.7 

Someone in household earns 

income from an off-farm job 

Yes 6.9 

No 16.3 

Operation used a veterinarian for livestock 

or poultry during the previous 12 months 

Yes 8.8 

No 13.5 

1

Maximum of nine livestock species: beef cattle, dairy cattle, swine, 

sheep, goats, chickens and other poultry, horses and other equids, 

bison, and other species. 

2

Maximum of 18 species/crops: 9 livestock species above, and 9 crop 

commodities (hay; wheat; corn, barley, oats or rye; soybeans and 

other oil-bearing crops and/or oilseeds; tobacco; cotton and/or cotton 

seed; vegetables and/or melons; fruits, berries, and/or tree nuts; other 

crops). 

Larger farms are usually more diversified than 

smaller farms, so the one-species operations in table 4 

are likely low-sales farms. Operation characteristics such 

as diversification and farm sales are often interrelated; 

therefore, a statistical model (multivariable logistic 

regression) was created to simultaneously evaluate 

multiple factors affecting farm exits. The model has the 

advantage of evaluating the effect of a single variable 

while taking into account the effects of other variables. 

Results of the model are shown as odds ratios (tables 5 

and 6). In this case, an odds ratio is the likelihood (odds) 

that an operator with a certain characteristic will leave 

farming as compared with an operator without that 

characteristic. 
United States Department of Agriculture • Animal and Plant Health Inspection Service • Safeguarding American Agriculture 

Table 5. Operator characteristics associated with expected 

farm exits in the next 5 years, multivariable model 

Characteristic 

Odds ratio 

(OR) 

OR 

95% CI 

Primary operator age (years), p<0.0001 

Less than 45 referent

45-64 1.44 0.98–2.11 

65 or more 3.78 2.55–5.58 

Highest level of formal education, p<0.0001 

Less than high school diploma 2.14 1.55–2.97 

High school diploma or 

equivalence (GED) 1.58 1.23–2.02 

Some college (include 

Associate degree) 1.55 1.18–2.04 

College graduate and beyond referent 

No one in household earns 

income from an off-farm job, 

p<0.0001 

1.57 1.30–1.91 

Table 6. Operation characteristics associated with 

expected farm exits in the next 5 years, multivariable 

model 

Characteristic 

Odds ratio 

(OR) 

OR 

95% CI 

Region, p=0.0002 

North Central 1.58 1.28–1.94 

Northeast 1.24 0.87–1.77 

South referent 

West 1.50 1.12–2.02 

Farm sales (gross annual sales), p=0.008 

Less than $10,000 2.19 1.25–3.83 

$10,000-99,999 1.69 0.97–2.93 

$100,000-249,999 1.75 0.97–3.14 

$250,000 or more referent 

Total number of commodities* raised during the previous 12 

months, p<0.0001 

1 only 2.19 1.64–2.91 

2 only 1.60 1.26–2.04 

3 only 1.27 0.99–1.64 

4 or more referent 

Operation did not use a 

veterinarian for livestock or poultry 

during the previous 12 months, 

p=.017 

1.25 1.04–1.51 

Operation had beef cattle in 

previous 12 months, p=0.0006 0.64 0.49–0.82 

Operation did not use internet to 

market agricultural products, 

p=0.026 

1.70 1.07–2.73 

*The maximum number of species/crops is 18—9 livestock species 

and 9 crop commodities (table 4). 

Certain conclusions that can be drawn from the 

model (tables 5 and 6) are consistent with previous 

research on farm exits and consistent with common 

sense. For example, as operators age they often 

downsize their operations in anticipation of retiring from 

farming (Hoppe and Korb, 2006). These downsized 

operations are likely to have fewer commodities, lower 

farm sales, an operator age 65 or more, and no one in 

the household with an off-farm job. All of these factors 

additively contribute to high odds of an expected farm 

exit in the next 5 years, based on the model. 

The odds of an expected farm exit were almost four 

times higher for operators who were 65 or older 

compared with operators who were less than 45 years 

old (OR=3.78) [table 5]. If the reader prefers to evaluate 

the odds of staying in farming over the next 5 years, 

these odds can easily be calculated from tables 5 and 6. 

The inverse of the odds ratio given in the tables gives 

the odds of staying in farming. For example, operators 

who were 65 or older had 74 percent lower odds of 

staying in farming than operators who were less than 45 

years old (OR=1/3.78=0.26). 

Hoppe and Korb (2006) investigated the relationship 

between off-farm employment and farm exits for all U.S. 

farms and suggested that off-farm work could influence 

farm exits in two opposing ways. 1) Off-farm 

employment could increase the likelihood of farm exits if 

the operator is using off-farm employment as the first 

step in leaving farming. 2) Off-farm income could reduce 

the likelihood of farm exits by providing a financial safety 

net for the operation. The NAHMS study found that offfarm employment by someone in the household reduced 

the odds of a farm exit. Specifically, operators on 

operations without off-farm employment were 1.5 times 

more likely to expect to leave farming in the next 5 years 

(OR=1.57; table 5). 

Consistent with previous ERS research on all U.S. 

farms (Hoppe and Korb, 2006), the NAHMS study found 

that small-scale livestock operations with beef cattle 

were less likely to expect to exit farming in the next 5 

years (OR=0.64) than operations with other livestock 

species (table 6). 

Other findings from the model were unexpected. 

For instance, region—which did not initially appear by 

itself to be associated with expected farm exits (table 

1)—was significantly associated with farm exits when 

accounting for the other factors in the multivariable 

model (p=0.0002). Operators on small-scale operations 

in the North Central and West regions were about 50 

percent more likely to expect to leave farming in the next 

5 years (OR=1.58 and 1.50, respectively) compared with 

operations in the South region, after accounting for the 

other variables in the model. Odds of farm exits were not 

significantly different for operations in the Northeast and 

South regions. These findings are interesting and may 

warrant further research to determine the factors 

creating regional differences in expected farm exits for 

small-scale livestock operations. 

Also significant was the finding that operators with 

less formal education were more likely to leave farming. 

Operators with less than a high school diploma were 

about twice as likely (OR=2.14) to expect to leave 

farming in the next 5 years compared with operators who 

had college degrees. 
United States Department of Agriculture • Animal and Plant Health Inspection Service • Safeguarding American Agriculture 

Two variables in the model—veterinarian use and 

Internet marketing (table 6)—may be significantly 

associated with expected farm exits because they are 

proxies for future planning. In other words, operators 

planning to leave farming might not use a veterinarian or 

Internet marketing because they are investing fewer 

resources in their operations, knowing that they are 

planning to leave farming soon. This may explain why 

operators who did not use a veterinarian during the 

previous 12 months were 25 percent more likely to 

expect to leave farming in the next 5 years than 

operators who did (OR=1.25), and operators who did not 

use Internet marketing were 70 percent more likely to 

expect to leave farming in the next 5 years than 

operators who did (OR=1.70). Alternatively, it is possible 

that veterinarian use and Internet marketing have 

positive effects that help livestock operators stay in 

farming. From this study alone, however, it is not 

possible to determine if these relationships are cause or 

effect. 

The gender and race of the operator did not have a 

statistically significant association with farm exits in this 

multivariable model. 

Factors influencing the decision to continue 

farming 

The NAHMS study also investigated factors 

influencing an operator’s decision to continue farming. 

Overall, operators on 89.4 percent of operations 

expected to continue farming over the next 5 years. 

These operators were asked about factors that influence 

their decision to continue farming. 

For operators that expected to continue farming over 

the next 5 years, the three most necessary factors to the 

decision to continuing farming were improved farm 

product prices, stable cost of farm expenses, and 

greater stability of prices for farm products (ranked very 

necessary by 62.8, 58.6, and 57.3 percent of operations, 

respectively). 

Access to operating loans was more important to 

operators on high-sales operations, and access to 

supplemental income from off-farm employment was 

more important to operators on low-sales operations 

(see table 2 for farm sales breakouts). Of operations in 

which the operator expected to continue farming over 

the next 5 years, about half of medium- and high-sales 

operations considered access to operating loans to be 

very necessary to their decision to continue farming 

(46.1 and 54.2 percent of operations, respectively). The 

ability to find off-farm employment to supplement income 

was very necessary to the decision to continue farming 

for operators on 38.0 percent of low-sales operations, 

20.7 percent of medium-sales operations, and 14.3 

percent of high-sales operations. 

Of operations in which the operator expected to 

continue farming over the next 5 years, improved farm 

product prices was very necessary to the decision to 

continue farming for about three of four medium- and 

high-sales operations (74.1 and 71.3 percent, 

respectively). Operators on a lower percentage of lowsales operations (61.5 percent) considered improved 

farm product prices to be very necessary to their 

decision to continue farming. 

Summary 

Interrelated factors were found to be associated with 

anticipated farm exits in the next 5 years for small-scale 

livestock operations. Operations in which the operator 

expected to leave farming in the next 5 years had fewer 

total commodities, livestock other than beef cattle, lower 

gross annual sales, older operators, and operators with 

less formal education. Regional differences in farm exits 

were also identified; operators on operations in the North 

Central and West regions were more likely to expect to 

leave farming in the next 5 years than operators on 

operations in the Northeast and South regions. 

Understanding farm exits is useful to policymakers 

and the industry as a whole, since farm exits can impact 

farming communities and many other areas of the 

economy. 

Reference 

Hoppe RA, Korb P. 2006. Understanding U.S. Farm 

Exits. Economic Research Service Report Number 21. 

www.ers.usda.gov/publications/err21 

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