United States 

Department 

of Agriculture

Economic 

Research 

Service

Beginning Farmers 

and Ranchers

Mary Ahearn

Doris Newton

Economic 

Information

Bulletin

Number 53

May 2009
United States 

Department 

of Agriculture 

www.ers.usda.gov

A Report from the Economic Research Service

Abstract

USDA defi nes beginning farmers and ranchers as those who have operated a farm or 

ranch for 10 years or less either as a sole operator or with others who have operated a 

farm or ranch for 10 years or less. Beginning farmers tend to be younger than established 

farmers and to operate smaller farms or ranches, some of which may provide no annual 

production. Beginning farmers often face obstacles getting started, including high startup 

costs and limited availability of land. USDA—through the Farm Service Agency and the 

Natural Resources Conservation Service—provides loans and conservation assistance to 

beginning farmers and ranchers. This report draws on data from annual surveys and the 

Census of Agriculture to provide policymakers with a better understanding of beginning 

farmers and ranchers, including how they contribute to U.S. agricultural production.

Keywords: agricultural production, Agricultural Resource Management Survey (ARMS), 

beginning farmers and ranchers, Census of Agriculture, farm assets, Food, Conservation, 

and Energy Act of 2008, Conservation Reserve Program, operator characteristics

Acknowledgments

The authors appreciate the review comments of Mike Duffy from Iowa State University, 

Darren Hudson from Mississippi State University, Steve Koenig and Mark Falcone from 

the USDA Farm Service Agency, and three anonymous reviewers. This report is largely 

based on data from USDA’s Agricultural and Resource Management Survey which 

is jointly sponsored by the National Agricultural Statistics Service and the Economic 

Research Service.

Beginning Farmers 

and Ranchers Economic

Information

Bulletin

Number 53

May 2009 Mary Ahearn, mahearn@ers.usda.gov

Doris Newton
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Contents

Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Defi ning Beginning Farmers and Ranchers . . . . . . . . . . . . . . . . . . . . . . 3

 Personal and Household Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . 7

 Commodity Specialization, Farm Asset Control, 

 and Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Beginning Farmers and Government Programs. . . . . . . . . . . . . . . . . . . 14

Past Trends May Foretell the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

 The Age Distribution of Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

 Entry Into Farming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

 Survival and Growth in Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Appendix: Census of Agriculture Linked Dataset . . . . . . . . . . . . . . . . 26

Recommended citation format for this publication: 

Ahearn, Mary and Doris Newton. Beginning Farmers and Ranchers, 

EIB-53, U.S. Department of Agriculture, Economic Research Service, 

May 2009.
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Summary

A fi nancially viable farm business can require control of substantial assets, 

posing a major obstacle to potential new farmers or ranchers. Several U.S. 

Department of Agriculture (USDA) programs are designed to support the 

special needs of beginning farmers and ranchers, including fi nancial support 

in the form of loans and higher conservation payment rates.

What Is the Issue?

Policymakers have responded to the perceived needs of beginning farmers 

and ranchers by designing programs targeted to them. To target USDA’s 

beginning farmer programs more effectively, basic information is required 

on the numbers and characteristics of beginning farmers and ranchers. 

Comparing the characteristics of beginning farmers with more established 

farmers may help provide such information, specifi cally on how beginning 

farmers acquire control of the land they operate and on their sources of 

household income (farm and off-farm).

USDA’s defi nition of a farm encompasses a large number of different farming 

operations, and the beginning farmer defi nition is, likewise, broad. USDA’s 

current defi nition of a beginning farm is one operated by a farmer who has 

operated a farm or ranch for 10 years or less. The 10-year requirement applies 

to all operators of the farm or ranch. The defi nition includes as farmers and 

ranchers many whose only goal is to provide a household residence, rather 

than a business operation. This report considers the beginning farmers and 

ranchers both with and without a commercial focus, based on whether or not 

they produced any agricultural commodities. 

What Did the Study Find?

The concentration of farms with a principal operator who is a beginning 

farmer or rancher varies across the United States, ranging from less than 10 

percent in some counties to more than half of all farms in other counties. 

Approximately a fi fth of all farms have a principal operator who is a 

beginning farmer. Beginning farmers account for about 10 percent of the 

value of U.S. production, but their share of production varies signifi cantly by 

agricultural commodity. 

While most beginning farmers tend to be White, non-Hispanic, and male, 

they are more likely than established farmers to be female, non-White, 

or Hispanic. Farmers and ranchers are an aging population, as is the U.S. 

population at large. Beginning farmers are typically younger than established 

farmers, yet 32 percent were 55 years or older in 2007, compared with 

more than 63 percent of established farmers who were over 55 years old. A 

farmer’s place of business is often also his or her residence. This means that 

they have greater incentives to continue farming, but may gradually lighten 

their workloads and/or reduce the acreage they operate as they age.

Beginning farmers and ranchers face two primary obstacles: high startup 

costs and a lack of available land for purchase or rent. Despite those obstacles, 

entry rates in farming are not signifi cantly different from entry rates for other 

industries. Annual entry rates in farming ranged from 8-11 percent between 
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1978 and 1997, compared with 7.7 percent for manufacturing between 1963 

and 1982. 

Beginning farmers operate farms of all sizes, but on average, they are smaller 

than established farms—174 acres compared with 461 acres. Many farms, 

particularly beginning farms, have no agricultural commodity production 

in a given year. Household income levels are determined more by farm size 

than by whether farmers and ranchers are beginning or established. On 

average, beginning farmers and their households earn less income from their 

farm, but more off-farm income, than do more established operators and 

their households, while the average income from both sources are similar for 

the two groups ($87,004 for beginning farmer households compared with 

$90,866 for established farmer households). 

Beginning farmers are less likely than established farmers to rent farmland. 

They are just as likely as established farmers to own all of the land they 

operate—although they own smaller acreage and are more likely to carry 

debt on their land. The most common way beginning farmers acquire land is 

to purchase it from a nonrelative, rather than inherit it or receive it as a gift. 

While USDA has increasingly targeted programs to beginning farmers, 

beginning farmers are less likely to participate in Government programs 

than established farmers, at least for commodity payment and conservation 

assistance programs. On the other hand, since beginning farmers are more 

likely than established farmers to produce no agricultural commodities, 

and since some USDA programs are generally geared towards production, 

beginning farmers may not meet the eligibility requirements for such 

programs.

How Was the Study Conducted?

The 2007 Agricultural Resource Management Survey (ARMS) provided the 

data used to examine likely strategies of beginning farmers and ranchers to 

enter farming and to compare their business characteristics with those of 

established farmers and ranchers. By comparing characteristics of farms that 

report agricultural commodity production with those not reporting annual 

production, the report is able to distinguish commercially oriented beginning 

farms and ranches from those that are mainly residences. The report also 

used the linked Census of Agriculture from 1978 to 1997 to examine 

farming entry rates and new entrant survival rates. This linked fi le combines 

individual farm operator records for fi ve censuses (1978, 1982, 1987, 1992, 

and 1997) into one continuous record. The 2007 Census of Agriculture was 

used to identify beginning farmers’ geographic location. 
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Background

Since 1992, USDA has provided special assistance to beginning farmers 

and ranchers. Congressional concern about the increasing age of U.S. 

farmers and ranchers led to the creation of loan programs and Federal/State 

fi nancing partnerships for beginning farmers and ranchers as provisions in 

the Agricultural Credit Improvement Act of 1992. A decade later, the Farm 

Security and Rural Infrastructure Act of 2002 required USDA to provide 

higher payments to beginning farmers for participation in some conservation 

programs. Most recently, the Food, Conservation, and Energy Act of 2008 

(2008 act) expanded support to beginning farmers and ranchers for both loan 

and conservation programs. Many of the programs authorized for beginning 

farmers in the 2008 act also targeted socially disadvantaged (i.e., women and 

minority) and limited-resource farmers.1

In 2006, USDA issued a regulation regarding policies affecting small and 

beginning farmers and ranchers by establishing a framework that would 

help to ensure their viability (Departmental Regulation 9700-001, Small 

Farms and Beginning Farmers and Ranchers Policy). The USDA regulation 

codifi es USDA’s policy to foster marketing, development, credit, and 

outreach programs to improve the competitiveness of beginning farmers 

and ranchers. It also clarifi es the support of programs that focus on the 

special needs of beginning farmers and ranchers and ensures that new 

generations of small farmers and ranchers can gain access to the resources 

they need. DR 9700-0001 recognizes that small farmers are a diverse 

group of operators and establishes USDA policy to meet the credit needs 

of small, socially disadvantaged, and beginning operators. Moreover, the 

regulation goes beyond a narrow focus on commercial competitiveness and 

establishes support for an agricultural system that sustains and strengthens 

rural communities and cultural diversity and rewards stewardship of natural 

resources.

The aging of the farmer population has led to concern about a shortage 

of beginning farmers and ranchers because these new farmers often 

bring skill sets to complement and enhance traditional management and 

production technologies. New farmers are not all young farmers, however; 

approximately a third of beginning farmers are 55 years or older.

There are good reasons why so few farmers are young and many beginning 

farmers are middle-aged. Foremost among these reasons is that the startup 

costs in agriculture present a barrier to entry for some. Farming commonly 

requires control over a signifi cant amount of land and capital, and beginning 

farmers and ranchers face signifi cant startup requirements. For example, 

it is only when farms gross at least $50,000 in value of production that 

most farms make a profi t, and the average asset base of farms with sales of 

$50,000 or more in 2007 was over $1.9 million. One way that beginning 

farmers acquire assets is through inheritance. Since farmers are living 

longer, like the general population, the delay in the inheritance of their heirs 

is likely a factor in the declining number of young farmers. In addition, it is 

not uncommon for an inheritance of farm assets to be split among multiple 

family members. This practice increases the likelihood that each heir will 

receive a share of farm assets that cannot support a family in farming. For 

those aspiring to enter farming without the expectation of an inheritance 

1For information on the socially 

disadvantaged and limited-resource 

populations, see Covey and Ahearn 

(2007) and Newton and Ahearn (2006).
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or in need of expanded acreage, farming may have to be postponed until 

signifi cant resources have been accumulated to acquire necessary farm 

assets—a process that can take years. Aside from the fi nancial challenge 

of acquiring land, beginning farmers and ranchers may also face tight land 

markets because farmland is simply not available for either purchase or rent 

within their local area.

The purpose of this report is to provide answers to the following questions:

• How does USDA defi ne a beginning farmer or rancher?

• How do beginning farms and ranches differ from established farms and 

ranches, especially with respect to operator age, farm size, household 

income sources, and land acquisition?

• How likely are beginning farms and ranches to participate in Government 

programs?

• What do we know about recent farming entry rates, as well as the growth 

and survival of entrants?
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Defi ning Beginning Farmers and Ranchers2

The USDA defi nition of a farm is any place from which $1,000 or more of 

agricultural products were produced and sold, or normally would have been 

sold, during the reference year.3 Most farms are small farms—with gross 

sales under $250,000—and the farm operators receive most of their income 

from off-farm sources. For program administration purposes, USDA defi nes 

a beginning farm as one operated by a farmer who has operated a farm for 10 

years or less. If a farm is operated by more than one operator, the experience 

restriction applies to all operators. In 2007, approximately 22 percent of all 

U.S. farms were operated solely by one or more beginning farmers, and the 

remaining 78 percent of farms were established farms. Six percent of those 

established farms included an experienced operator along with one or more 

operators with less than 10 years of experience (fi g. 1). (For more information 

on identifying beginning farmers, see box, “Beginning Farmer Defi nition and 

Data Sources.”)

Beginning farmers are located across the country; where there are farms, 

there are beginning farms. In some counties, as few as 10 percent of farms are 

classifi ed as beginning, while in other counties, more than half of all farms 

are beginning farms (fi g. 2). A variety of factors affect the share of farmers 

classifi ed as beginning in any particular county. Access to farmland affects 

the number of beginning farmers, and access is affected by competition for 

land (and land eligible for Government program payments). Urbanization 

also affects resource allocations for beginning farms, many of which rely on 

proximity to off-farm job opportunities and access to specialized farm markets. 

Beginning farm operators generally operate small farms and depend on 

off-farm income. Many beginning operators likely chose farming for its 

residential amenities, not because they aspired to develop their farms into 

commercially viable operations. These residential farms are counted as farms 

because the USDA defi nition for farms is very inclusive (see box, “Beginning 

Farmer Defi nition and Data Sources”). It may be useful to separate 

beginning farmers interested solely in a farm residence from beginning 

2We use the shorter term beginning 

farms (farmers) to include beginning 

farms and ranches (farmers and 

ranchers). 

3For purposes of offi cial statistics, 

if a place is defi ned as a farm according to the offi cial defi nition of a farm, 

then the individual operating the farm 

is considered as being in the workplace 

and not retired. However, some farmers 

and ranchers identifi ed according to 

that defi nition consider themselves to 

be retired from farming.

Note: Beginning farms are those where all operators have 10 years or less farming 

experience.

Source: ERS tabulations based on the 2007 Agricultural Resource Management Survey, 

NASS and ERS, USDA.

Figure 1

Beginning operators made up about a quarter of operators in 2007

Principal beginning operators 

(beginning farms)

15%

Other beginning operators 

(beginning farms)

7%

Less-experienced

 operators

(established farms)

3%

Established operators

(established farms)

75%
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The USDA defi nition of a farm is any place from which $1,000 or more of agricultural products 

were produced and sold, or normally would have been sold, during the reference year. This 

means that some places are counted as farms even if they had no annual production or sales. 

USDA considers a beginning farm as one operated by a farmer who has operated a farm or ranch 

for 10 years or less. The 10-year designation was fi rst introduced by the Agricultural Credit 

Improvement Act of 1992. 

Based on USDA’s designation, the 10-year requirement applies to all operators of the farm 

(defi ned as members of a multi-operator farm who materially and substantially participate 

in the operation of the farm or ranch) (Section 343(a), 7 U.S. Code 1991 (a) (11), 7 Code of 

Federal Regulations (CFR) 1941 for USDA-FSA and 7 CFR 1466.3, 1469.3 for USDA-NRCS). 

Therefore, if any operator of a farm has more than 10 years of farming experience, the farm is not 

classifi ed as a beginning farm by USDA. This distinction is noteworthy because the Farm Credit 

Administration, an independent Federal agency that regulates the major agricultural lender—

the Farm Credit System (FCS)—which targets loans to young, beginning, and small farmers, 

does not identify eligible beginning farmer participants in the same manner. In particular, 

farmers are eligible for the FCS young beginning farmer loan programs based solely on their 

level of experience operating a farm, regardless of the experience level of other operators on the 

farm (Guebert and Johansen, 2008). This report is largely focused on the 22 percent of farms 

designated in 2007 as beginning farms because we are interested in those eligible for USDA 

programs. 

The 2007 Census of Agriculture is a product of the National Agricultural Statistics Service 

(USDA, NASS). The ARMS is a joint product of the National Agricultural Statistics Service 

and the Economic Research Service (USDA, ERS). We draw on the general USDA defi nition 

to provide a description of beginning farms and ranches as we analyze data from USDA’s 2007 

Agricultural Resource Management Survey (ARMS) and 2007 Census of Agriculture. The 

ARMS version of the survey question is consistent with the USDA designation of a beginning 

farmer (i.e., 10 years of experience equates to the total experience operating a farm, regardless 

of whether it was from the current operation or multiple operations). Both data sources allow 

us to consider the tenure of up to three operators. The 2007 ARMS analysis is based on a 

question that asks farmers to report: “In what year did the operator begin to operate any farm 

operation?” The 2007 Census of Agriculture analysis is based on the question that asks farmers 

to report: “In what year did the operator begin to operate any part of this operation?” Based 

on the ARMS analysis, 22 percent were defi ned as beginning farms in 2007 compared with 31 

percent of farms from the 2007 Census analysis. 

The subtle wording difference in these questions can result in different responses from some 

operators. When an operator’s current farm is not the fi rst farm he or she operated, the ARMS 

question will indicate an earlier year for beginning a farm career. Therefore, we would expect the 

Census question to identify more farmers as beginning farmers, compared with the ARMS. To 

Beginning Farmer Defi nition and Data Sources
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quantify the impact of the wording difference, the 2007 ARMS asked operators both questions. 

And, in fact, we found that the census wording—which only considers the years of experience 

operating the current farm—identifi es more farms as beginning farms than the standard ARMS 

wording. Using the standard ARMS wording, which considers all years of farming experience, 

22 percent of farms were beginning farms in 2007. Using the standard Census wording which 

considers only experience on the current farm, the share of farms designated as beginning in 

2007 was 29 percent.

Beyond the subtle wording difference in the two survey instruments, there may be other technical 

explanations for the reporting difference between the Census and the ARMS. Two data collection 

efforts will not result in the exact same answer due to sampling and nonsampling error. 

An advantage to the Census data is that they provide county-level estimates, allowing us to 

construct maps of the location of beginning farmers and ranchers. The advantage to the ARMS 

data is that they are more recent and provide greater detail on the strategies and fi nancial position 

of beginning farms and ranches. Both data sources allow us to consider the experience of up 

to three operators per farm or ranch. Hence, in the unlikely event that an operation had four or 

more operators, we would be classifying the farm as a beginning farm without knowledge of 

the experience level of that fourth operator. In 2007, there were more than 2,500 operators on 

beginning farms that had more than 3 operators for whom the level of farming experience of 

the additional operators was unknown. Using ARMS data, if more than one operator exists, we 

report personal characteristics or income sources of households for the principal operator of 

the farm. In addition, household fi nancial questions are not asked of the 2 percent of nonfamily 

farms, so these data are reported only for the beginning farms that are family farms. 

Effect of survey question wording regarding years of farming experience, 2007

Designation based on 10 years or less of 

experience of up to three operators1

Operating any farm Operating this farm

Number of beginning farms 449,506 555,662

Share of farms designated as beginning 22 29

Share of total value of production 

on beginning farms

10 23

Number of beginning farmers 

on beginning farms

650,318 826,681

Number of less-experienced farmers 

on established farms

101,253 72,800

1For farms with more than three operators, if the three operators reporting are beginning farmers, the farm is classifi ed 

as beginning.

Source: USDA, Agricultural and Resource Management Survey, 2007.
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farmers attempting to develop their farm into a viable commercial farming 

operation. The latter group may be employing different strategies on and off 

the farm to increase their potential for success in farming at a commercial 

level. Although USDA regulation DR 9700-001 is broadly aimed at all 

beginning farmers, policymakers also intended that some programs focus 

on commercial viability. For example, Farm Service Agency loan programs, 

by statute and regulation, are directed toward beginning farmers operating 

“family size” farms—generally interpreted as those with $10,000 or more in 

anticipated gross sales. 

A rough way to identify commercially oriented beginning farmers is to 

consider whether they had a positive value of production from either cash 

sales or contracting.4 Commercially minded beginning farmers may have 

personal characteristics and management strategies more in line with 

established farmers who produce goods annually than with other beginning 

farmers. In 2007, about 32 percent of beginning farms reported no production 

(table 1), compared with 20 percent of established farms. 

Source: ERS tabulations based on the 2007 Census of Agriculture (USDA, NASS).

Figure 2

The share of beginning farmers varies by county

Beginning as a

share of all farmers

and ranchers in a county

< 20%

21% - 25%

26% - 35%

36% - 40%

> 40%

4This approach may miss a small 

number of commercially minded 

beginning farmers due to an unusual 

production failure or an investment in a 

commodity with a multiyear production cycle (e.g., fruit trees) that has not 

yet resulted in agricultural product. 

Also, nationwide, about 15 percent of 

farms are enrolled in the Conservation 

Reserve Program, and some of these 

operators enroll their whole farm in the 

program, thereby removing the farm 

from production agriculture. 
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Personal and Household Characteristics 

Like all farm operators, most beginning principal farm operators are White, 

non-Hispanic, and male. Beginning farmers, however, are more likely 

than established farmers to be female, non-White, or Hispanic. There are 

distinctions in the relationship between operator demographic characteristics 

and whether the farm produces any agricultural product. Beginning farms 

without production are more likely to have a woman operator than those with 

production. This is true for established farms, as well. In contrast, non-White 

or Hispanic operators are less likely to be found on beginning farms without 

production. 

Table 1

Characteristics of operators, by production status, beginning farms vs. established farms, 2007

Established farms Beginning farms

Item All With 

production

Without 

production All With production

Without 

production All farms

Number

Farms and principal operators 1,609,505 1,293,403 316,102 449,506 305,964 143,542 2,059,011

All operators on farms 2,350,684 1,895,237 455,447 650,318 446,121 204,197 3,001,002

Percent of all farms

Farms and principal operators 78 63 15 22 15 7 100

Percent of farms with

Any beginning operators 6 6 5 100 100 100 26

Any operators <35 years 5 6 3 21 23 16 9

A principal operator <35 years 2 2 1 17 20 10 5

A principal operator >55 years 63 62 67 32 30 36 56

A principal operator 

retired from farming 

21 17 36 13 10 21 19

Any women operators 39 38 46 48 47 52 42

A woman principal operator 10 8 19 16 12 24 11

Any non-White operators 6 6 6 10 13 4 7

A non-White principal 

operator 

5 5 5 9 12 4 6

A principal operator with a 

4-year college degree 

24 23 28 28 29 26 25

Principal operators with prior 

farm experience1

29 31 22 6 7 4 24

A principal operator with farming as a major occupation 44 51 15 24 27 18 40

Gross sales <$250,000 88 85 100 96 94 100 90

Gross sales <$250,000 

and an operator <35 years 

4 4 3 19 20 16 7

1Prior experience operating a farm other than the one currently operated. See box, “Beginning Farmer Defi nition and Data Sources,” for more 

information.

Source: ERS tabulations based on the 2007 Agricultural Resource Management Survey, NASS and ERS, USDA.
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A formal education is one way for farm operators to bring new skills to 

farming. Beginning farmers are somewhat more likely than established 

farmers to have a 4-year college degree. Obtaining a college education may 

prevent younger family farm members from immediately taking over or 

helping to operate family farms. In 2007, more than 60 percent of established 

farmers were over 55 years old, compared with 32 percent of beginning 

farmers. Nationwide, only 5 percent of principal operators were under the age 

of 35, but 17 percent of beginning farmers were under the age of 35.

On average, beginning family farmers and their households earn less 

income from their farm, but more income from off-farm sources, than more 

established operators and their households. In fact, most beginning farms lost 

money farming in 2007. The average income of beginning farm households 

(from both farm and off-farm sources) is on par with the average income of 

established farm households ($87,004 compared with $90,866). The average 

incomes of both beginning and established farm households are signifi cantly 

higher than that of the average U.S. household ($67,609 in 2007). 

In general, sources of household income vary signifi cantly based on the 

size of the farm a household operates. The larger the farm, the greater the 

farm income; the smaller the farm, the greater the off-farm income. This 

relationship between farm size and household income is true whether the 

farm is an established farm or a beginning farm. Unlike large farms, most 

small farm operators (less than $250,000 in gross sales) indicate that their 

primary occupation is something other than farming. Since a higher share 

of beginning farmers operate small farms and have a nonfarm occupation, 

the average beginning farmer household has higher off-farm income, but 

lower farm income than established farm households. When the value of 

farm production is less than $50,000, the average farm household loses 

money farming, regardless of whether they are beginning farmers or not (fi g. 

3). Beginning farm households operating large farms, however, have lower 

household incomes than established farm households on large farms.

Source: ERS tabulations based on the 2007 Agricultural Resource Management Survey, NASS and ERS, USDA.

Figure 3

Sources of household income differ by level of farm production and beginning farmer status, 2007

−50,000

0

50,000

100,000

150,000

200,000

Dollars per

household

Farm earnings

Operator earned 

off−farm income

Spouse earned

off−farm income

Other off−farm income

Established Beginning Established Beginning Established Beginning Established Beginning

No production $1-$49,999 $50,000-$249,999 $250,000 or more
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Most family farm household residents have some form of health 

insurance—86.5 percent did in 2007. While people in beginning farm 

households are much more likely to hold off-farm jobs, they are somewhat 

less likely to have health insurance coverage than those in established farm 

households—84.9 percent compared with 87.0 percent in 2007. Perhaps the 

lack of health insurance is not too surprising since beginning farmers are 

younger, and health insurance is closely associated with a person’s age—

coverage increases with age.

Generally, beginning farmers operate smaller farms and, hence, have less 

farm net worth than established farmers (table 2). For example, the average 

farm net worth of beginning farm households that produced agricultural 

products in 2007 was $428,894, compared with $840,125 for established 

farms. Both groups averaged over $200,000 in nonfarm equity. 

Table 2

Household income and production status of family farms, beginning vs. established farms, 2007 

Established farms Beginning farms

Item All With 

production

Without 

production All With production

Without 

production All farms

Percent

Share with nonfarm 

earnings 

70 69 75 86 85 86 73

Share with farm loss 53 48 74 69 66 75 56

Dollars per principal operator household

Household farm earnings 14,446 19,449 -5,947 -1,253 854 -5,698 11,002

Off-farm income, all 

household members 

76,421 71,272 97,404 88,257 90,624 83,266 79,017

 Earned income of

 operator 

38,369 34,447 54,354 47,478 46,254 50,060 40,367

 Earned income of

 spouse 

14,475 13,757 17,40122,426 23,383 20,407 16,291

 Interest and dividend

 income 

4,841 4,682 5,491 4,365 3,952 5,235 4,737

 Public and private

 transfers, including 

 Social Security and

 pensions 

11,099 10,713 12,672 5,992 6,286 5,372 9,979

 Other income 7,636 7,673 7,486 7,997 10,749 2,193 7,715

Average farm operator 

household income 

90,866 90,721 91,457 87,004 91,477 77,567 90,019

Average farm net worth 765,523 840,125 461,482 403,626 428,894 350,321 686,136

Average nonfarm 

net worth 

221,219 217,364 236,932 219,256 229,059 198,576 220,789

Average household 

net worth 

986,742 1,057,489 698,414 622,882 657,953 548,896 906,925

Note: Because farms have farm-related sources of income from other than agricultural production, such as Conservation Reserve Program 

payments, not all farms without production lose money farming.

Source: ERS tabulations based on the 2007 Agricultural Resource Management Survey, NASS and ERS, USDA.
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Commodity Specialization, Farm Asset Control, 

and Asset Management

Since beginning farmers are more likely than established farmers to operate 

small farms, they produce less of the total annual agricultural product—and 

less individual commodities—than the size of their population might 

otherwise indicate. Twenty-two percent of all farms were beginning farms, 

but they accounted for 10 percent of the value of all agricultural products in 

2007 and less than 10 percent of the total land in farm operations. Beginning 

farmers accounted for more livestock than crop production (12 percent versus 

7 percent) in 2007. Beginning farmers produce a variety of commodities, 

but their poultry production is noteworthy: beginning farmers account for 

20 percent of total U.S. poultry production (fi g. 4). Poultry, cattle, and dairy 

combined represented more than half of the value of production of beginning 

farms in 2007 (fi g. 5). Nevertheless, more beginning farms producing 

agricultural commodities in 2007 specialized in beef cattle than any other 

commodity group. This is the case for established farms, as well (table 3).

Source: ERS tabulations based on the 2007 Agricultural Resource Management Survey, 

NASS and ERS, USDA.

Figure 4

Beginning farms’ shares of U.S. production, 2007

0

5

10

15

20

25

Cash

grains

Cotton

& rice

Fruit & 

tree nuts

Nursery &

vegetables

Cattle

Hogs

Dairy

Poultry

Other

Percent

Source: ERS tabulations based on the 2007 Agricultural Resource Management Survey, 

NASS and ERS, USDA.

Figure 5

Distribution of commodity production by beginning farms, 2007

Cash grains, 15%

Cotton and rice, 3%

Fruit and tree nut, 5%

Nursery and 

vegetables, 10%

Cattle, 16%

Hogs, 6%

Dairy, 17%

Poultry, 20%

Other, 8%
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Table 3

Characteristics of farms and production status, beginning vs. established farms, 2007 

Established farms Beginning farms

Item All With 

production

Without 

production All With production

Without 

production All farms

Percent of farms 78 63 15 22 15 7 100

Average acres operated 461 536 153 174 221 76 398

Percent of acres operated 91 85 6 9 8 1 100

Percent of all farms

Share of farms by type: 

 Rural residence farms 62 55 90 77 75 82 66

 Intermediate farms 25 28 8 16 17 15 23

 Commercial farms 13 16 1 6 8 3 12

Share of farms by 

specialization: 

 

 Grain, oilseed, cotton,

 tobacco 

18 22 na 8 12 na 15

 High-value crops 6 8 na 6 9 na 6

 Beef cattle 32 40 na 25 36 na 31

 Hogs, poultry, dairy 7 8 na 4 6 na 6

 General commodities 37 22 na 57 37 na 42

Dollars per farm

Rental expense for land: 

 Cash rent paid 7,438 9,122 496 2,568 3,741 102 6,367

 Cash rent per

 reporting farm 

24,850 25,807 6,525 16,944 18,106 2,847 23,863

 Share rent paid 

 (including Government 

 payments) 

5,352 6,637 56 977 1,441 na 4,390

 Share rent per 

 reporting farm 

58,995 59,271 18,097 32,801 33,016 na 56,777

Percent

Share of farms with 

characteristic:

 Own all acres operated 61 54 86 78 70 94 64

 Rent land on cash 

 basis 

30 35 8 15 21 4 27

 Rent land on share 

 basis 

9 11 na 3 4 na 8

 Use of hired labor 35 40 13 21 27 9 32

 Use of borrowed capital:

 Non-real-estate debt 15 17 5 12 15 6 14

 Real estate debt 22 24 11 26 29 20 23

 Farm business debt-

 asset ratio >=0.10

19 21 10 25 28 18 20

 Located in metro area 39 39 41 38 39 37 39

na=not available.

Source: ERS tabulations based on the 2007 Agricultural Resource Management Survey, NASS and ERS, USDA.
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The average beginning farmer in 2007 operated a farm that was less than 

half the size of the average established farmer’s, 174 acres compared with 

461 acres. Not surprisingly, farms without production tended to have far 

fewer acres (table 3). A challenge for beginning farmers who hope to be 

full-time farmers is to acquire a large enough operation to: (1) operate at an 

effi cient scale of production; and (2) make an income suffi cient to support a 

household. How do beginning farmers organize their farming operations to 

acquire control over land, relative to established farmers? 

Beginning farmers rely less on renting than established farmers. Compared 

with established farmers, beginning farmers are more likely to own all of the 

land they operate, and their rented land tends to constitute a smaller share of 

their total acres operated. This is true whether the beginning farmers reside 

in metro areas or nonmetro areas. Of course, this general description may 

not hold for all areas. Land markets are highly localized and affected by 

factors such as natural resources and climate, as well as nonfarm demands 

for land. For example, farms in the West are about twice the size of the 

average U.S. farm, and there is a greater difference between beginning and 

established farmers in how they use rental land. Beginning farmers in the 

West rent a much smaller share of the acres they operate than established 

farmers in that region. Western beginning farmers are also less likely than 

established farmers to rent land for grazing on a per head or AUM (animal 

unit month) basis (2 percent of beginning farmers compared with 10 percent 

of established farmers). 

Although beginning farmers are just as likely as established farmers to own 

farmland, they are more likely to have debt associated with farmland ownership 

(as indicated by the greater share with debt-to-asset ratios over 10 percent and 

the greater incidence of real estate debt). The 2006 Agricultural Resource 

Management Survey (ARMS) asked principal operators of beginning farms 

how they acquired the land they owned. Did they purchase it from a relative, 

purchase it from someone other than a relative, or was it a gift or inheritance? 

Consistent with their reported debt loads, most beginning operators acquired 

land by purchasing it from a nonrelative. Another common way beginning 

farmers acquired land was through a gift or inheritance (fi g. 6). Given recent 

Source: ERS tabulations based on the 2006 Agricultural Resource Management Survey, 

NASS and ERS, USDA.

Figure 6

Sources of landownership for principal operators of beginning farms,

by location

United States Northeast Midwest South West

0

10

20

30

40

50

60

70

Purchased 

from relative

Purchased from

nonrelative

Inherited or gift Percent
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high returns to investment in farmland, owning farmland is a reasonable goal, 

if the operator understands that during certain periods (e.g., early to mid-1980s) 

purchasing highly leveraged farmland may be a poor investment. 

Unfortunately, we do not have information on whether the tendency to own, 

rather than rent, land is the preferred choice for acquiring land or how it may 

impact farm operations. It may very well be that beginning farmers would 

like to rent more acres, but the rental acres are not available (e.g., because 

leases in their area are based on long-term relationships between established 

parties). Policymakers expressed concerns that the Conservation Reserve 

Program may be crowding out beginning farmers from the farmland rental 

market and partially addressed the issue with a provision in the 2008 act. 

Additionally, if beginning farmers are in metro areas, there may be greater 

competition for land with nonfarm uses for both rental and ownership 

opportunities. Even if farmland is scarce in metro areas, beginning farm 

households may be drawn to those areas because they rely on off-farm 

sources of income, and higher paying off-farm job opportunities are more 

plentiful near metro areas. 

Nationwide, beginning farms are just as likely as established farms to be in 

metro counties. To understand how metro infl uence on farmland markets in 

a major agricultural State might affect production location, we considered 

the case of Iowa. Besides being a major agricultural State, Iowa has reliable 

county-level land value data to compare with the county-level Census of 

Agriculture data on beginning farms. In Iowa, 24 percent of metro farms 

were beginning farms, compared with 23 percent of farms in nonmetro 

areas in 2002. There was no difference in the share of acres beginning farms 

operated between metro and nonmetro areas, either. This is true in spite of 

the fact that Iowa land values were 24 percent higher in metro areas than 

nonmetro areas (Duffy, 2003). There was a signifi cant difference, however, 

in beginning farms’ share of production by metro location. Again, using 

Iowa in 2002 as an example, beginning farms in metro counties accounted 

for 14 percent of production in those counties. Beginning farms in nonmetro 

counties adjacent to metro counties accounted for 17 percent, while, in 

nonmetro counties not adjacent to metro areas, their share of production 

was 21 percent. This may be an indication that more commercially minded 

beginning farmers are located in the least populated areas.
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Beginning Farmers 

and Government Programs

To address the potential fi nancial challenges faced by beginning farmers, 

USDA currently targets a specifi c percentage of funds for some programs 

to beginning farmers and ranchers. Some beginning farmer programs have 

existed since the 1990s, as required by the Agricultural Credit Improvement 

Act of 1992.5 Most of the current assistance comes in the form of loans from 

USDA’s Farm Service Agency (FSA), and the independent Farm Credit System 

(FCS). Financial and technical conservation assistance is also provided by the 

Natural Resources Conservation Service (NRCS). For example, between 2004 

and 2006, $2.981 billion in loans was allocated by FSA and $233 million was 

allocated in conservation assistance (U.S. Government Accountability Offi ce, 

2007). The Farm Credit System provided $10.4 billion in loans to beginning 

farmers for 2007 alone, a level that has increased steadily each year since 

2004, when it loaned more than $4 billion to beginning farmers (Guebert and 

Johansen, 2008).6

The FSA loan programs are targeted to beginning farmers with limited 

economic resources who are unlikely to obtain loans from other lenders. 

The loan programs include both direct and guaranteed operating loans and 

farm ownership loans. The Food, Conservation, and Energy Act of 2008 7

established a new conservation loan program with priority given to beginning 

farmers. The 2008 act also improves support for beginning farmers by 

increasing the loan program funds reserved for beginning farmers from their 

previous levels. The 2008 act requires FSA to reserve 50 percent (up from 

35 percent) of direct operating loans and 75 percent (up from 70 percent) 

of direct farm ownership loans for beginning farmers until September 1 

of each fi scal year. FSA reserves 40 percent of guaranteed operating loans 

and 40 percent (up from 25 percent) of guaranteed farm ownership loans 

for beginning farmers until April 1 of each fi scal year (USDA-FSA, 2007). 

By statute and regulation, loans are directed toward beginning farmers who 

operate a farm of “family size.” While “family size” is not precisely defi ned, 

few farms with less than $10,000 in expected gross farm sales are served by 

the credit programs. 

Besides the loan set-aside requirements for beginning farmers and ranchers, 

FSA provides a downpayment loan program that gives borrowers with direct 

loan fi nancing a downpayment necessary to purchase a farm. The 2008 

act strengthens this program by decreasing the borrower’s contribution, 

increasing the maximum amount of the loan, increasing the repayment term, 

and reducing the interest rate on these loans. The legislation also grants the 

Secretary of Agriculture the authority to guarantee certain land contract sales 

between private parties and qualifi ed beginning farmers in loan amounts up 

to $500,000 for up to 10 years. Finally, the 2008 act directs the Secretary 

of Agriculture to establish a New Farmer Individual Development Account 

(IDA) Pilot. Under this pilot program, qualifi ed beginning farmers may apply 

for matching grants of up to $6,000 for certain expenditures, such as the 

purchase of farmland or breeding livestock, reducing some startup costs. The 

pilot program is authorized for 5 years with $5 million in annual funding 

authority.

 5Public Law. No. 102-554, 106 Stat. 

4142.

6The eligible population for Farm 

Credit System loans includes lessexperienced farmers who operate 

established farms with experienced 

operators in addition to beginning 

farmers on their own. 

7Under the Food, Conservation, 

and Energy Act of 2008, many of the 

programs directed at beginning farmers 

and ranchers are also directed at socially disadvantaged and limited-resource 

farmers and ranchers. Approximately 

10 percent of farms are classifi ed as 

limited resource farms and 16 percent 

are classifi ed as socially disadvantaged 

farms (based on the personal characteristics of the principal operator alone), 

compared with the 22 percent of beginning farms. There is overlap in these 

groups; combined they account for 

nearly 40 percent of all farms (Covey 

and Ahearn, 2007).
15

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Conservation assistance is provided under the Environmental Quality 

Incentives Program (EQIP) and the Conservation Stewardship Program 

(CSP), previously known as the Conservation Security Program. Both 

programs are directed at conservation practices on working lands, in 

contrast to idled land. While established farmers are eligible to receive 

up to 75 percent cost-share under these conservation programs, beginning 

farmers are eligible to receive up to 90 percent (USDA, NRCS, 2005). In 

2006, on average, NRCS provided a cost-share rate of almost 80 percent for 

beginning farmers through EQIP, compared with an average of 59 percent for 

established farmers (other than limited-resource farmers) (U.S. GAO, 2007). 

The 2008 act introduced a new provision intended to affect the transfer of 

land made idle by the Conservation Reserve Program (CRP) to working lands 

operated by beginning farmers. In particular, the 2008 act allows the two 

parties (CRP enrollees and beginning farmers) to cooperate 1 year before 

the termination of the CRP contract, making improvements to the land in 

anticipation of production. When the CRP contract expires and the CRP 

participant sells or leases the land to a beginning operator with a conservation 

plan, the retired CRP participant can continue to receive CRP payments for 

not more than an additional 2 years. 

Another new provision under the 2008 act reserves 10 percent of the 

grant funds available for value-added market development activities for 

beginning farmers and ranchers. USDA has other programs that indirectly 

benefi t beginning farmers by providing support to partners who assist 

beginning farmers through outreach activities. The 2008 act established an 

administrative unit within USDA, the Small Farms and Beginning Farmers 

and Ranchers Group, to coordinate activities that improve access to, and 

participation in, USDA programs.

Because of sample size limitations, ARMS does not provide suffi cient data 

to examine the characteristics of beginning farmers who participate in 

USDA’s or FCS’s loan programs. We can, however, consider participation 

in Government farm conservation and commodity payment programs. 

Beginning farmers participate in Government programs at a lower rate than 

established farms. A quarter of beginning farms participated in Government 

payment programs (either commodity or conservation programs) in 2007, 

compared with 42 percent of established farms. Beginning farms are less 

likely than established farms to participate in commodity programs (14 

percent compared with 34 percent); and most Government payments are 

received through commodity programs (76 percent in 2007), rather than 

conservation programs. Lower participation overall and in commodity 

programs is consistent with beginning farms that are more likely to be small 

farms. For a variety of reasons, small farms are less likely to participate in 

programs. 

Lower participation rates and small acreage explains the lower-than-average 

Government payments received by beginning farms. While beginning farms 

are also less likely than established farms to participate in conservation 

programs, the participation rates are much closer—13 percent for beginning 

farms compared with 17 percent for established farms. When we consider 

farms that do not have production, however, another noteworthy relationship 

becomes obvious. Farms without annual production—whether beginning or 
16

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established—are more likely to participate in conservation programs than 

farms with production. These participation rates are consistent with the 

program design of the major conservation program, the Conservation Reserve 

Program (CRP), which establishes multi-year contracts with landowners 

to take land out of commodity production in exchange for an annual rental 

payment. Almost 30 percent of the beginning farms without production have 

acres enrolled in the CRP (table 4). Beginning farms are less likely than 

established farms to enroll in the Federal Crop Insurance Program (7 percent 

compared with 19 percent). 

Table 4

Government program participation and payments, by production status, 

beginning vs. established farms, 2007

Established farms Beginning farms

Item All With 

production

Without 

production All With production

Without 

production All farms

Percent

Percent of farms 78 63 15 22 15 7 100

Percent of acres operated 91 85 6 10 8 1 100

Government farm program 

participation rate: 

 

 Any Government farm

 program 

42 43 37 25 23 30 38

 Commodity program 34 40 11 14 19 4 30

 Conservation program 17 13 31 13 6 28 16

 Enrollment in CRP 15 11 31 12 5 28 15

 Enrollment in Federal crop

 insurance 

19 23 2 7 10 1 16

Dollars per farm

Government program payments: 

 All program payments 4,772 5,405 2,164 1,353 1,352 1,355 4,020

 Commodity program 

 payments 

3,691 4,503 343 760 1,027 199 3,047

 Conservation program 

 payments 

1,081 901 1,821 593 325 1,156 974

CRP=Conservation Reserve Program. 

Source: ERS tabulations based on the 2007 Agricultural Resource Management Survey, NASS and ERS, USDA.
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Past Trends May Foretell the Future

A variety of past trends may hold insight into the next generation of U.S. 

farmers. The changing age structure of farmers is most commonly cited as an 

indicator of the impending inter-generational transfer of farms, but examining 

clues to the more dynamic changes in the sector may provide greater insights. 

The Age Distribution of Farmers

Support for policies that address the needs of beginning farmers is often 

accompanied by the observation that the average age of farmers has been 

increasing steadily. The average age of principal farm operators in 2007 was 

57 years, compared with an average of 50 years in 1978. A decline in the 

number of young farmers and an increase in the number of aging farmers 

seems to be pushing this age trend. In fact, more than a quarter of all U.S. 

farmers in 2007 were 65 years or older (fi g. 7). 

While the statistics are accurate, the interpretation of the changing age 

distribution of farmers can be misleading since farmers, like others in the 

general population, are living longer. To most farm operators, the farm is 

both their business and their home. Therefore, as farmers age and want 

to work less, they generally have the option of reducing their production 

signifi cantly, but still live on and continue operating a farm. Idling productive 

acres under the Conservation Reserve Program is a strategy that some eligible 

farmers have used to earn a return from farming with minimal physical labor. 

Renting out land or hiring in labor are other obvious strategies aging farmers 

can employ to continue farming at some level. In addition, the increased 

mechanization of agriculture means that farming has become less arduous, 

allowing aging operators to meet the physical labor requirements of farming 

longer than was previously possible. 

Source: ERS tabulations based on USDA, NASS, 1978-2007 Census of Agriculture.

Figure 7

Principal farm operators are an aging population; 

more than half are at least 55 years old

Percent

1978 1982 1987 1997 2002 2007

0

20

40

60

80

100

Under 25 years

25 to 34 years

35 to 44 years

45 to 54 years

55 to 64 years

65 years and over

Census year
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Farmers phasing out of production agriculture, with little or no agricultural 

production, and living at the farm residence are still reported as “engaged in a 

farming occupation” based on the current farm defi nition. In fact, an operator 

may indicate that his or her primary occupation is farming and still have 

little or no agricultural production. The explanation for this hinges on the 

current defi nition of a farm. The defi nition of a farm is based on the actual or 

potential sales of $1,000 of agricultural product. Under this defi nition, many 

farms are more like residences than commercial businesses. That may explain 

why 13 percent of beginning farmers considered themselves to be retired 

from farming. It is possible that farmers began farming an operation 10 years 

ago or less—qualifying as beginning farmers—and then subsequently scaled 

back their operation, but still live on the farm and consider themselves to be 

retired from farming. While farming may have become a second career for 

these farmers, it did offer a preferred retirement lifestyle. 

In contrast to farmers, others in the labor force generally do not have a 

joint place of business and residence. Therefore, when nonfarmers retire, 

they are reported as out of the labor force. Data on the retirement age of 

the U.S. population since 1950 have shown a consistent downward trend in 

the retirement age (Gendell, 2008).8 This trend, coupled with an increase 

in the population’s life expectancy, has meant an increase in the postwork retirement period. So, it is not surprising that farmers—who are still 

considered in the work force even as they lighten their work load—are 

signifi cantly older as a group than all employed U.S. persons and all selfemployed households (fi g. 8).

While there is no question that the share of aging farmers is growing, that 

trend is also true for the rest of the U.S. population. Since the farm is often 

both the family home and business, comparing the age distribution of 

farmers with the U.S. adult population—both employed and unemployed—is 

informative. Considering all U.S. heads of households (25 years and 

older), farmers still exhibit an older age structure. The share of the farmer 

Source: ERS tabulations based on USDA, NASS, Census of Agriculture and USDC 

March Current Population Survey, 2007.

Figure 8

Age distribution of U.S. population and farmers, 25 years and older

Percent

25 to 34 years

35 to 44 years

45 to 54 years

55 to 64 years

65 years and over

0

20

40

60

80

100

U.S. 

employed

U.S. selfemployed

householder

U.S. Farmers

householder

8Gendell also reports that, in the 

past dozen years, older men, especially 

those 65 years or older, have increased 

their labor force participation and fulltime employment, reversing longrun 

declines in the retirement age for this 

age group.
19

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population that is 65 years or older, however, is similar to the share of the 

same age group among all U.S. households (fi g. 8). 

Entry Into Farming

Since the changing age distribution of farmers can provide a misleading view 

of the future for beginning farmers, we considered more direct evidence on 

recent farming entry rates. A variety of factors affect entry into farming, 

including the current commodity market outlook and the availability of land. 

Both of these factors are manifested in the startup costs faced by a potential 

new entrant. Although asset requirements vary signifi cantly across regions 

and types of specialties, the average fi nances for a farm size considered 

profi table in a given year show that asset requirements can be a major 

obstacle to a potential new farmer or rancher. For example, most farms with 

annual production sales of $50,000 or less usually lose money farming and 

are entirely dependent on their off-farm sources of income. For the farms 

above $50,000 in annual sales—most of which make a profi t—the average 

farm size in 2007 was over 1,200 acres. Given that farm and ranch real estate 

is the largest component of farm assets and, with farmland averaging about 

$2,350 per acre nationwide (as of January 1, 2008), the average asset base of 

farms with annual sales of $50,000 or more was over $1.9 million in 2007.

We considered statistics from 1978 to 1997 in our examination of entry 

rate trends.9 Industry statistics on agriculture and its structure are usually 

presented as a snapshot in time, which masks considerable dynamics as 

captured by exit, entry, and changes in farm size. We look at entry rates over 

this 20-year period by linking the Censuses of Agriculture with the changes 

seen in the four time periods between each of the fi ve censuses.10 Generally 

speaking, a new entry is one where a farm operation is not matched to a 

record in a previous Census (see the appendix for more information). Note 

that new entrants defi ned by the linked census fi le differ from the USDA 

defi nition for beginning farmers. A new entrant defi ned by linked census 

data may or may not be considered a beginning farmer, and not all beginning 

farmers are new entrants. The Census occurs every 4-5 years, and a new 

entrant is one that entered between censuses. The USDA designation of a 

beginning farmer is one who has been farming for not more than 10 years. 

So, if a new entrant were also new to farming, then the entrant would be 

considered a beginning farmer.

In contrast to the relatively constant number of farms over recent decades, 

the linked census data show that many farm businesses go out of business 

and many new farms come into business. The rate of entry and exit varies 

somewhat over these four time periods—for two periods the entry rate 

exceeded the exit rate and for two periods the opposite was true—but entry 

rates overall were relatively stable, showing no strong upward or downward 

trend. More specifi cally, both the annualized entry and exit rates during the 

four subperiods ranged from 8 to 11 percent.11 It is also interesting to note 

that these relatively stable entry rates were occurring while per acre farm real 

estate values increased, declined, and then increased again between 1978 and 

1997.

In farming, businesses enter at all sizes. Entry rates among small farm 

businesses, however, are signifi cantly greater than for other farm sizes, 

9The 2002 Census of Agriculture is 

available and could be considered in 

this analysis. We chose, however, not 

to include 2002 because the method for 

linking records (i.e., the farm identifi er 

variable) changed from 1997 to 2002 

and the measurement of new entrants 

may be sensitive to this change.

10For an analysis of exit rates using 

this same data source, see Hoppe and 

Korb (2005).

11Entry and exit of farming businesses should not be confused with 

changes in the use of land for agricultural purposes. Since 1978, the acres of 

land used in agriculture have declined. 

The 442 million acres of land used for 

cropland in 2002 was the lowest level 

since land-use estimates were made 

for 1945. Land used for grazing has 

experienced a steady decline (www.ers.

usda.gov/Briefi ng/Landuse/).
20

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suggesting that a start small strategy is commonly used in farming, 

regardless of whether an operator intends to expand. Entry rates decline 

steadily as farm size grows, until farms reach a mid-size range of 260 acres 

or more (fi g. 9). Even for the largest farm size categories, entry rates were at 

5 percent or greater during the periods analyzed.

Evidence shows that entering farmers make signifi cant contributions to 

agricultural production. As a group, entering farm businesses account for 

a sizable share of farm sales—a share that is generally higher than that 

reported for beginning manufacturing industries (Dunne, Roberts, and 

Samuelson, 1988). For the four subperiods examined, about 30 percent of all 

agricultural sales were contributed by new entrants.12 Turnover and the shift 

of acres and sales among entering and surviving farm businesses have largely 

been uncorrelated with market conditions.13 

Survival and Growth in Agriculture

The linked census data also offer unique information about the survival rates 

of newly entering farms. For example, since we know the number of farms 

that entered between the 1978 and the 1982 censuses, we can calculate their 

survival rates over time. For this group of new entrants, 45 percent survived 

their fi rst 5-9 years in operation (because they were counted in the 1987 

census) (table 5). We calculate subsequent survival rates for those entering 

during the 1978-1982 period. By 1997, 19 percent of the farm businesses that 

began during the 1978-1982 period were still in existence. In table 5, we also 

present survival rates for the cohort that entered during the 1978-82 period 

and survived the previous period. Sixty-three percent of those who survived 

that startup period survived 10-14 years from the time they began, and 68 

percent of those that survived the second period were in business for 15-19 

years from the time they entered farming. In short, entrants with more tenure 

have higher survival rates or, conversely, new entrants have lower survival 

rates than farms with more experience. 

Source: Ahearn, Korb, and Yee, 2009.

Figure 9

Entry rates are higher for small farms and then level off

Percent

0

10

20

30

40

50

60

1982-87 1992-97

1-49 50-99 100-179 180-299 260-499 500-999 1,000-

1,999

2,000

plus Acreage class

1978-82 1987-92

12Sales, rather than value of production, are measured in the Censuses of 

Agriculture.

13The exception to this is for certain 

specializations from 1982 to 1987, a 

stressful period for agriculture. During 

this period, farm asset values declined 

precipitously, largely as a result of 

shifts in international demand and domestic fi nancial market conditions.
21

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A common startup strategy for any business is to start small. For that strategy 

to be successful in the long run, the business plan must include growth to 

an optimally effi cient farm size, depending on what that is for the farm’s 

specialty and region. The linked census data allow us to consider how 

surviving farms change size over time. (Refer to appendix table 1 for the 

share of farms remaining in their entry size class at the end of the period as a 

share of those that started in the size class at the beginning of the period and 

averaged over the four time periods.) The majority of surviving farms stay in 

the same size class from one census period to another. The smallest farms (1-

49 acres) have one of the highest shares of farms remaining in their size class. 

This size-tenure dynamic is not generally found in manufacturing industries, 

where the pattern is for smaller fi rms to increase in size over time. The small 

size class of farms, however, is dominated by those in operation largely to 

provide its operators with a farm residence, rather than serve as a viable 

commercial operation. Residence farms are often not interested in expanding 

their production or sales. Not surprisingly, the largest farms were the most 

likely to stay in the same size category, since they had nowhere to go except 

to decrease. Mid-sized farms were the least likely to remain in their size class 

and were somewhat more likely to contract in size than to expand. 

Table 5

Survival rates of farmers and ranchers who entered during the 1978-82 period 

Census period Entered between 1978 and 1982 

Entered between 1978 and 1982 and survived 

the previous 5-year census period

1987 44.6 44.6

1992 27.9 62.6

1997 18.9 67.7

Source: Ahearn, Korb, and Yee, 2009
22

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Conclusions

Changes in the age distribution of farmers and concerns about high startup 

costs have spurred policymakers’ interest in beginning farmers. Entry into 

farming, however, has not declined in recent decades. Beginning farmers 

enter agriculture at all ages, not just young ages, and at all farm sizes. While 

beginning farms are more likely than established farms to be small farms 

operated by younger operators, about a third of beginning farmers are 55 

years or older. Many farmers enter the industry by operating small farms and 

do not expand their farm size over time, including entrants more interested 

in a farming lifestyle and not commercial profi tability. This small-farm trend 

may explain why production in agriculture has become more concentrated on 

fewer farms, while the entry rate into agriculture has not declined. Although 

individuals who aspire to be farmers may face signifi cant fi nancial challenges 

to entry, we found evidence that farming entry rates are on par with those 

from other industries. 

Since beginning farms are typically smaller than established farms, they 

produce less of the total agricultural product (10 percent) and comprise a 

smaller share of the total farmland operated (9 percent) than their share of 

all farms might otherwise indicate (22 percent). In fact, in 2007, about 32 

percent of beginning farms did not report any production, compared with 19 

percent of established farms. Many likely chose farming for the residential 

amenities, and not primarily because they aspire to develop their farms into 

commercially viable operations. In addition, nearly 30 percent of beginning 

farms without production have acres enrolled in the Conservation Reserve 

Program.

Farmland is a fi xed and critical input into agriculture, and beginning farmers 

may face challenges in obtaining access to land. The national average value 

of an acre of farm real estate is now in excess of $2,300. Surprisingly, 

beginning farmers are less likely than established farmers to rent farmland. 

They are also more likely than established farmers to own all of the land 

they operate, although they operate smaller farms and are more likely to 

hold real estate debt. Of course, these results vary signifi cantly across the 

agricultural landscape. In recognition of the importance of the beginning 

farmer group to agricultural productivity growth and conservation goals, the 

Government provides assistance to beginning farmers in the form of loans 

and conservation assistance, and this assistance has grown in recent years. 

Nevertheless, beginning farmers are less likely to participate in Government 

direct payment programs than established farmers.

Issues for Future Research

The fi ndings on beginning farmers and ranchers raise a variety of interesting 

questions relating to the Government programs designed to encourage 

beginning farmers to enter agriculture or enhance their chances of surviving 

as viable farm operators and to effi ciently contribute to agricultural output. 

If the goal of these programs is to increase the number of beginning farmers 

and ranchers, how do we know if too few new producers are entering farming 

to jeopardize the future of agriculture? In addition, once entered, what 

obstacles to commercial success do beginning farmers face? Surely, the high 

startup costs of farming have always been a deterrent to those interested in 
23

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the farming occupation and lack the means, but has the situation worsened 

in recent years? Aside from commercial viability, Government programs 

may have other goals, such as encouraging environmentally friendly farming 

practices or a farm structure that offers greater rural amenities, such as 

landscape or cultural amenities. Little is known about the environmental 

stewardship of beginning farmers and ranchers compared with established 

farmers or, more generally, the amenities that beginning farmers and 

ranchers provide society compared with those provided by established 

farms. Since beginning farmers and ranchers tend to operate smaller farms 

than established operators, the research issues relating to the viability and 

contributions of beginning farms is closely tied to a broader research agenda 

related to agricultural structure. 
24

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References

Ahearn, Mary Clare, Penni Korb, and Jet Yee. “Producer Dynamics in 

Agriculture: Empirical Evidence,” Producer Dynamics: New Evidence 

from Micro Data, Timothy Dunne, J. Bradford Jensen, and Mark J. 

Roberts (eds.), Chicago: University of Chicago Press and National Bureau 

of Economic Research, chapter 10, 2009.

Covey, T., and M. Ahearn (coords.). Agricultural Income and Finance 

Outlook, AIS-85, U.S. Department of Agriculture, Economic Research 

Service, December 2007.

Duffy, Michael. 2002 Iowa State Land Value Survey, Publication FM 1825, 

Iowa State University Extension, January 2003.

Dunne, Timothy, Mark Roberts, and Larry Samuelson. “Patterns of Firm 

Entry and Exit in U.S. Manufacturing Industries,” RAND Journal of 

Economics Vol. 19, No. 4, Winter 1988.

Gendell, Murray. “Older Workers: Increasing Their Labor Force 

Participation and Hours of Work,” Monthly Labor Review, pp. 41-54, 

January 2008.

Guebert, Steve, and Mark Johansen. FCS’s Young, Beginning, and Small 

Farmer Mission Performance: 2007 Results, Offi ce of Regulatory Policy, 

FCA Board Meeting, June 12, 2008. Available at http://www.fca.gov/

FCA-Web/fca%20new%20site/Download/2007YBSBoardPres.pdf.

Hoppe, Robert, and Penni Korb. Understanding U.S. Farm Exits, ERR No. 

21, U.S. Department of Agriculture, Economic Research Service, 2005.

Newton, D., and M. Ahearn. “USDA’s Farm Defi nition and the Targeting of 

Underserved Farmers,” Meeting the Challenges to Sustainable Growth 

and Development of Rural Communities, N. Tackie, N. Baharanyi, 

R. Zabawa, and W. Hill (eds.), proceedings of the 64th Professional 

Agricultural Workers Conference, Tuskegee, AL, December 2006.

U.S. Department of Agriculture, Economic Research Service. “Agricultural 

Resource Management Survey Briefi ng Room,” May 2009. Available at 

http://www.ers.usda.gov/Briefi ng/ARMS/. 

U.S. Department of Agriculture, Economic Research Service. “Land Use, 

Value, and Management Briefi ng Room,” October 2007. Available at 

http://www.ers.usda.gov/Briefi ng/LandUse/.

U.S. Department of Agriculture, Farm Service Agency. Loans for Beginning 

Farmers and Ranchers (Program Fact Sheet), October 2005.

U.S. Department of Agriculture, Farm Service Agency. Farm Loan 

Programs: Funding FAQs, 2007. Available at http://www.fsa.usda.gov/

FSA/webapp?area=home&subject=fmlp&topic=fun.
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U.S. Department of Agriculture, National Agricultural Statistics Service. 

2007 Census of Agriculture, Geographic Area Series, AC-07-A-51, Vol. 1, 

February 2009.

U.S. Department of Agriculture, Natural Resources Conservation Service. 

Conservation Opportunities Fact Sheet, September 2005. Available at 

http://www.nrcs.usda.gov/programs/farmbill/2002/pdf/ConOpFS_0905.

pdf.

U.S. Department of Agriculture. Small and Beginning Farmers and 

Ranchers Policy, Departmental Regulation 9700-001, Offi ce of the Chief 

Economist, August 3, 2006.

U.S. General Accounting Offi ce. Beginning Farmers: Additional Steps 

Needed to Demonstrate the Effectiveness of USDA Assistance, GAO-07-

1130, Washington, DC: Government Printing Offi ce, October 2007.
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Appendix: 

Census of Agriculture Linked Dataset

The Census of Agriculture has been conducted for over 150 years. In 1997, 

responsibility for the census was transferred from the Census Bureau to the 

USDA’s National Agricultural Statistics Service (NASS). The Census of 

Agriculture linked fi le is currently a subset of the census fi les maintained 

by NASS; developed by combining individual farm operator records for fi ve 

censuses (1978, 1982, 1987, 1992, and 1997) into one continuous record. 

Each record represents one individual farm operator’s responses about a 

farm operation to all and/or any censuses. Thus, farms can be followed over 

a 20-year period. The fi le contains 4.5 million observations (records) and 85 

analysis variables, such as farm size, economic details about commodities 

produced, Government program participation, county location of the 

farm, and demographic characteristics of the farm operator.14 One obvious 

weakness of the data for examining turnover and mobility is that the censuses 

are taken every 5 years (or 4 years for the 1978-1982 subperiod). Hence, yearto-year changes are likely underestimated.

The linked fi le attempts to follow farm operations that are tied to the farmland 

rather than follow individual farm operators. This is done using the Census File 

Number (CFN). The CFN identifi es a farm operation for a particular census 

and may follow a farm operation through subsequent censuses (up to fi ve on the 

fi le). If the farm continues from one census to the next, and the farm operator 

responds to the census using the same CFN, the information reported by that 

farm for that census period is appended to the linked fi le using the same CFN. 

If the operation changes hands, either through sale or inheritance, the CFN 

may continue, it may change, or be terminated. For example, if an operator dies 

and leaves a farm to a surviving family member who continues to farm, then a 

CFN should continue. If a surviving family member merges the inherited farm 

with another existing operation with that operation’s CFN, then the CFN may 

change. Farms that are split up may have a portion of their operation continue 

under the old number and the rest under a new number(s), or all parcels of the 

operation may receive new numbers. When a farm is sold for nonagricultural 

purposes, the CFN is terminated. A farm is defi ned as going out of business 

when either the questionnaire is returned with the indication that the property 

is no longer operating as a farm or there is no response to repeated requests 

for information. The farm’s absence in a particular census year is represented 

in the longitudinal fi le by zeros for all variables in that observation for that 

year. Farms are considered out of business (an exit) when zeroes in the CFN 

fi eld indicate that the farm has been discontinued. When a particular CFN 

is classifi ed as an exit through the process described above, it is not possible 

to determine if the exit was the result of a merger with another farm or the 

result of the exiting farm’s being used for nonfarm purposes. Likewise a farm 

operation with a CFN that is not matched or linked to a previous record would 

be considered a new business and added to the linked fi le as a new record or 

an entry. A farm with a CFN for both a beginning and an ending census period 

in its record is considered a survivor. Most observations on the linked fi le 

represent only that farm and are assigned a nonresponse weight of one. Some 

farms have a weight greater than one, meaning they represent themselves and 

other farms (or portions of farms) that did not respond to the Census. 

14Analysts can also add any additional 

variables that are collected on the 

censuses. The survey instruments are 

available at the back of each printed 

census volume and at the NASS website, www.nass.usda.gov.
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Appendix table

Transition matrix showing share of surviving farms and acres, 

by acreage size class, 1978-97 (4-period average)

Farms

 Ending acre class

Beginning acre class 1-49 50-99 100-179 180-259 260-499 500-999 1,000-1,999 2,000+

1-49 0.429 0.050 0.025 0.009 0.009 0.004 0.001 0.001

50-99 0.087 0.407 0.077 0.021 0.016 0.005 0.001 0.001

100-179 0.039 0.071 0.415 0.061 0.040 0.011 0.003 0.001

180-259 0.026 0.031 0.104 0.366 0.114 0.024 0.005 0.002

260-499 0.017 0.016 0.043 0.069 0.434 0.094 0.013 0.003

500-999 0.011 0.007 0.016 0.018 0.104 0.451 0.088 0.011

1,000-1,999 0.008 0.004 0.009 0.007 0.026 0.114 0.466 0.085

2,000+ 0.007 0.002 0.005 0.004 0.011 0.024 0.086 0.576

Acreage

 Ending acre class

Beginning acre class 1-49 50-99 100-179 180-259 260-499 500-999 1,000-1,999 2,000+

1-49 0.411 0.064 0.027 0.009 0.008 0.003 0.001 0.001

50-99 0.076 0.379 0.077 0.021 0.015 0.005 0.001 0.001

100-179 0.036 0.062 0.387 0.061 0.040 0.011 0.003 0.001

180-259 0.024 0.029 0.095 0.343 0.111 0.023 0.005 0.001

260-499 0.016 0.014 0.039 0.060 0.407 0.099 0.013 0.003

500-999 0.010 0.007 0.015 0.016 0.090 0.425 0.095 0.012

1,000-1,999 0.007 0.004 0.008 0.007 0.024 0.099 0.441 0.093

2,000+ 0.005 0.002 0.003 0.002 0.006 0.013 0.036 0.599

Note: Rows do not necessarily sum to 1.0 because they are averages of four periods.

Source: Economic Research Service calculations based on USDA, NASS, Census of Agriculture, 1978-97.