2009 Edition 2009 Edition

Rural

America

At A 

Glance

Rural

America

At A 

Glance

The U.S. economy moved into a recession in late 2007, led by declines in 

housing construction and related industries, including financial 

services; high energy costs also played a role. Initially, recessionary 

effects were mitigated in nonmetro areas by high commodity prices throughout much 

of 2008, which boosted incomes in farming and mining. Nonmetro areas were also 

less vulnerable than metro areas to a tightening financial sector. 

In late 2008 and early 2009, the recession deepened, with national gross domestic product falling at an annual rate of 6.2 percent. Commodity prices also fell. 

Nonmetro unemployment rose from 5.2 percent in mid-2008 to 9.2 percent in mid2009, while metro unemployment rose from 5.3 percent to 9.1 percent over the same 

period. Both metro and nonmetro areas suffered from the 

contraction of manufacturing, retail, and other sectors. The overall pace of employment decline, however, was greater in metro areas (-3.8 percent) than in nonmetro 

areas (-3.0 percent).

Declining housing prices, combined with a sharp rise in high-cost loans, were 

important factors in the recent mortgage and foreclosure crisis that has affected metro 

and nonmetro housing markets alike. The most recent data show that 

nonmetro residents were slightly more likely than metro residents to have obtained 

high-cost loans just prior to the recession. Foreclosure rates in 2007 and the first half 

of 2008 were similar in metro and nonmetro areas.

Even before the current recession, nonmetro poverty rates had risen slightly in 

the growth years following the 2001 recession, in contrast to the typical trend during 

a time of economic expansion. The nonmetro poverty rate, 15.4 percent in 2007 vs. 

the national rate of 12.5 percent, has exceeded the national poverty rate since 2001. 

Poverty rates were even higher in 2007 for nonmetro children under age 18, at 22.5 

percent.

Employment change, second quarter 2008 to second quarter 2009

Source: USDA, Economic Research Service analysis using data from the Bureau of Labor Statistics.

-17.5 to -3.5

-3.6 to 0.0

0.0 to 14.0

Percentage

2013 Edition 2013 Edition

Beginning

Farmers and

Ranchers

At A Glance

Beginning

Farmers and

Ranchers

At A Glance

Share of beginning farmers has been declining

Note: Census data are based on the experience of the principal farm operator only.

Source: USDA, National Agricultural Statistics Service, Census of Agriculture, 1982-2007.

80

70

60

50

40

30

20

10

0

Percent of principal operators 

1982 1987 1992 1997 2002 2007

Year

Less than 10 years of farming experience 10 years or more of farming experience

United States Department of Agriculture

Economic Research Service

Economic Brief Number 22

January 2013

A farm or ranch is considered a beginning farm/ranch if the operators have managed 

a farm or ranch for 10 years or less (see box, “Definitions”). In 2011, beginning farms or 

ranches accounted for 22 percent of the Nation’s 2 million family farms, 10 percent of the 

value of agricultural production by family farms, and 11 percent of the acres operated by 

family farms, according to USDA’s Agricultural Resource Management Survey (ARMS). 

Some 98 percent of all U.S. farms are defined by USDA as family farms—that is, 

the majority of farm assets are owned by the principal operator and his or her extended 

family. USDA programs have targeted assistance to beginning farmers and ranchers since 

the 1992 Agricultural Credit Improvement Act, and subsequent farm legislation has 

supported and extended such assistance. 

Beginning Farms and Ranches Have Been 

Declining for at Least Two Decades

The Censuses of Agriculture offer trend data based on principal operators—those 

responsible for most of the day-to-day farming decisions—with less than 10 years 

of experience farming their current farm (see data section at end of report). In 1982, 

38 percent of principal farm operators had less than 10 years of experience farming, compared with 26 percent of principal farm operators in the latest Census of Agriculture, 

conducted for 2007 by USDA’s National Agricultural Statistics Service.
Consistent with the declining percentages of beginning farmers and ranchers during the 1982-

2007 period, the share of young operators was also declining (Ahearn and Newton, 2009). In 1982, 

16 percent of all principal operators were under 35 years old; by 2007, only 5 percent were under 

35 years old. The average age of principal operators of beginning farms in 2011 was 49, compared 

with 60 for established farms. Even so, only 14 percent of principal operators of beginning farms 

were under 35 years old. Nearly half of all beginning farmers (49 percent) were 35 to 49 years old, 

25 percent were 50-64 years old, and 12 percent were 65 years or older. Most principal operators 

are men, whether beginning or established, but beginning farms are more likely than established 

farms to have a principal operator who is a woman (12 percent versus 10 percent).

Beginners Less Likely To Specialize

Beginning farms are more likely to be general livestock farms and less likely to specialize in 

grains and row crops or dairy than established farms. For both types of farms, the most common 

specialty is beef cattle, but fewer beginning farmers than established farmers specialize in 

raising cattle.

A significant share of U.S. farms produces no agricultural commodities for sale in a typical 

year. In 2011, 30 percent of beginning farms and 25 percent of established farms did not produce 

any marketable agricultural commodities. This is largely because most farmers operate small 

farms, earn significant off-farm income, and/or are elderly. Their property is still defined as a farm, 

which is any place from which $1,000 or more of agricultural products were produced and sold, 

or normally would have been sold, during the year (see box, “Definitions”).

Both beginning and established farms use a variety of ways to market their products. In recent 

years, about 10-12 percent of all farms used marketing or production contracts to market their 

commodities. How products are commonly marketed depends, in part, on what is produced. For 

example, production contracts are common in poultry and hog production, and marketing contracts 

are common for many crops, such as sugar beets, peanuts, and some fruits and vegetables. Of 

farms with positive values of production in 2011, 2 percent of beginning farms used production 

contracts compared with 3 percent of established farms, and beginning farms also were less likely 

to use marketing contracts (9 and 14 percent, respectively, in 2011).

Of farms with positive values of production in 2010, 19 percent of beginning farms and 

15 percent of established farms sold products directly to individual consumers (for consumption) 

or to intermediaries who sell directly to individuals (e.g., at a restaurant or grocery store). These 

beginning farms are more likely than established farms to be engaged in direct sales, such as at 

farmers’ markets (18 percent and 13 percent in 2010), and fewer than 3 percent of beginning farms 

sold to local retail intermediaries in 2009-10. Beginning farms that sold directly to consumers, 

rather than to local retail intermediaries, were less likely than other beginning farms to make 

a profit. 

Beginning farms are less likely to specialize in grains and row crops than

established farms 

 Fruits, tree nuts, vegetable, greenhouse, and nursery crops.

 General crop and livestock farms are those where no single commodity accounts for 50 percent of the total

value of production.

Source: USDA, National Agricultural Statistics Service and Economic Research Service, Agricultural

Resource Management Survey, 2011.

35

30

25

20

15

10

5

0

Percent of farms 

Grains and

row crops

Specialty

crops

General and

other crops

Beef cattle Hogs and

poultry

Dairy General and

other

livestock

Beginning farms Established farms

1

2

1 2

2

2 Beginning Farmers And Ranchers At A Glance 2013 Edition
Households Receive Most of Their Income 

From Off-Farm Sources

For decades, most farm households—whether beginning or established—received a majority 

of their household income from off-farm sources. On average, off-farm income accounted for 83 

percent of farm operator household cash income in 2011. Most farm families operating small farms 

have negative net farm income (after depreciation)—that is, in a typical year, they lose money 

farming. The average farm income of beginning farm households is less than that for established 

farm households ($1,902 versus $18,119 in 2011), but their households had higher average offfarm incomes than established farm households ($89,015 versus $68,172). Beginning farm households received less farm income and more off-farm income than established farms regardless of 

farm size.

Principal operators provide a majority of 

the farm labor—operators of beginning farms 

worked an average of 1,071 hours per year on 

their farms in 2011, while operators of established farms worked 1,344 hours. On average, spouses on established farms also contributed more hours of farm work per year 

(369 in 2011) than those on beginning farms 

(320 hours). However, while farm families 

tended to provide fewer total hours on beginning farms, they provided a larger share of 

the total farm labor hours (87 percent) in 

2011, compared with established farms (72 

percent). Beginning farms are smaller, on 

average, than established farms, and larger 

farms are more likely to hire labor to meet 

their greater labor requirements.

Operators and spouses on beginning farms are more likely to work at off-farm jobs and 

businesses, and operators of beginning farms are more likely to have a college degree than 

established farm operators (30 percent compared with 23 percent in 2011). Off-farm income can 

enable beginning farmers and spouses to meet living expenses and/or expand farm operations if 

their long-term goal is to farm full time.

Family farm households allocate a disproportionately large share of their time to farming

compared with the share of income they receive from farming. This is because returns from 

farming transcend cash income. For example, the farm often provides tax advantages and 

long-term capital gains from farmland appreciation. During the last decade, the average annual 

rate of return to farm assets (a measure of profitability) was 2.1 percent and, when real capital 

gains are considered, the return was 6.6 percent. Additional returns from farming include onfarm 

housing and enhanced quality of life.

Households operating beginning farms have higher average off-farm income 

and lower average farm income at every farm size

Note: Households of principal operators only.

Source: USDA, National Agricultural Statistics Service and Economic Research Service, Agricultural Resource 

Management Survey, 2011.

180

160

140

120

100

80

60

40

20

0

-20

Thousands $ 

Less than

$10,000

$10,000

to $249,999

Gross farm sales

Off-farm income Farm income

$250,000

or More

Less than

$10,000

$10,000

to $249,999

$250,000

or More

Beginning farms Established farms

Households operating beginning farms 

work more off the farm, less on the farm

Source: USDA, National Agricultural Statistics Service 

and Economic Research Service, Agricultural Resource 

Management Survey, 2011.

100

80

60

40

20

0

Percent working off the farm

Beginning

farms

Established

farms

Neither operator or spouse

works off the farm

Both operator and spouse

work off the farm

Only spouses work off 

the farm

Only operators work off

the farm

3 Beginning Farmers And Ranchers At A Glance 2013 Edition
The Challenge of Acquiring Capital and Land

Beginning farmers often report that their biggest challenge in getting started in farming is 

access to enough capital and farmland to operate at a size capable of earning a sufficient profit 

(Shute, 2011). The average beginning farm was 200 acres in 2011, compared with 434 acres for 

established farms. Not surprisingly, the households of beginning farm operators also have lower 

farm and nonfarm net worth than the households of established farms. The majority of beginning 

farms include some owned land, but a higher share of beginning farms than established farms have 

only rented land. The most common way for U.S. farmers to have acquired “owned land” for their 

operation is to have purchased it from a nonrelative. This is true for both beginning and established 

farms. Established farms at all size classes, however, are more likely than beginning farms to have 

inherited or purchased their owned land from relatives.

The challenges of acquiring land in today’s market have likely been exacerbated by the 

prolonged rise in farm real estate values. The per-acre value of farm real estate in 2012 averaged 

$2,650, up 10.9 percent from 2011, although there was considerable variation across the Nation 

(USDA/NASS, 2012). The Northern Plains experienced the largest 2011-12 increase in farm real 

estate value, at 26.7 percent. The highest State-level real estate values were for some of the 

Northeastern States, where four States had averages exceeding $10,000 per acre. The Corn Belt 

region as a whole had the highest average regional value of $5,560 per acre. 

Not only should a beginning farmer expect to have low returns in the startup phase, but even 

established farms must be of a significant size before they are likely to earn positive returns. 

For example, when size is measured by the gross value of production, it is not until farms are in 

the $25,000-$30,000 range that the majority of farms have positive net cash returns. Less than 

one-quarter of beginning farms exceed $25,000 in gross value of production. And the average farm 

asset base for farms with $25,000 to $30,000 in value of production is over $800,000.

A useful indicator of the ability of a farm to expand by borrowing capital is its debt repayment 

capacity utilization (DRCU). DRCU is calculated as the ratio of current farm debt relative 

to the maximum feasible farm debt supportable out of farm income (assuming a 

6.0-percent interest rate and a 7-year term). Since it considers only the farm income available to 

support debt, a DRCU exceeding 100 percent indicates that debt payments must be made by 

drawing on additional sources, such as off-farm income or household/farm assets. Twenty-three 

percent of beginning farms had a DRCU exceeding 100 percent in 2011, compared with 13 percent 

of established farms. The average DRCU of beginning farms in 2011 was 50 percent, compared 

with 28 percent for established farms. 

Most common method of land acquisition is from a nonrelative, but 

established farms of all sizes are more likely to inherit land 

or purchase it from a relative

Source: USDA, National Agricultural Statistics Service and Economic Research Service, Agricultural Resource 

Management Survey, 2010.

70

60

50

40

30

20

10

0

Percent 

Less than

$10,000

$10,000

to

$249,999

Beginning farms Established farms

Gross farm sales

$250,000

or

More

Less than

$10,000

$10,000

to

$249,999

$250,000

or

More

Inheritance gift Purchase from relative Purchase from nonrelative No owned land

4 Beginning Farmers And Ranchers At A Glance 2013 Edition
Government Support of Beginning Farmers 

Historically, Government farm programs have targeted specific crops, conservation goals, and 

disaster relief. But, since 1992, USDA has provided targeted support to beginning farmers and 

ranchers. Consistent with their production choices, beginning farms are less likely than established 

farms to participate in Government direct-payment programs, many of which are focused on cash 

grain production. (Direct payments include those made to farm operators under commodity, 

conservation, and disaster programs, but exclude loans.) While they represented 22 percent of all 

farms, beginning farms accounted for only 14 percent of all farms that received Government 

payments in 2011 and received only 9 percent of all payments that year. Beginning farms are less 

likely than their established counterparts to participate in Federal crop insurance programs as well; 

while they accounted for nearly 11 percent of land in farms, they operated only 7 percent of the 

acres enrolled in crop insurance (USDA, 2011 ARMS).

Beginning farmers and ranchers avail themselves of other farm programs. In fiscal year (FY) 

2012 (October 1, 2011 to September 30, 2012), USDA,s Farm Service Agency (FSA) made 13,384 

direct loans to beginning farmers for a total of $1.1 billion in obligations (almost two-thirds of 

FSA’s total direct loan obligations that year). FSA guaranteed another 2,659 loans to beginning 

farmers for a total of $639 million, representing 33 percent of FSA’s guaranteed loan count and 26 

percent of FSA-guaranteed loan obligations in FY 2011. The two programs combined made 50 

percent of their loans in FY 2011 and 42 percent of their loan obligations to beginning farmers. 

In January 2013, FSA announced a microloan program for beginning and small farmers to allow 

them to borrow small amounts, up to $35,000, for operating loans.

In calendar year 2011, the Farm Credit System (FCS), an independent system of cooperative 

lenders, made 61,995 loans to beginning farmers, totaling $9.6 billion. These loans represented 19 

percent of total FCS farm loans made and 14 percent of total new FCS farm loan volume in 2011.

The 2008 Farm Act authorized $25 million for USDA to establish a Transition Incentive 

Program (TIP) to encourage enrolled Conservation Reserve Program (CRP) participants to transfer 

land coming back into production to beginning (and socially disadvantaged) farmers and ranchers 

engaged in sustainable practices. Enrolled CRP participants must be retired (or farmers or ranchers 

retiring within 1 year of CRP contract expiration) and are then eligible to receive an additional 

2 years of CRP rental payments under TIP. To date, $22.7 million has been allocated. CRP-TIP has 

1,719 contracts enrolled or pending enrollment, covering 275,608 acres of land in 26 States.

The 2008 Farm Act also provided for management training programs that target beginning 

farmers and ranchers. From 2009 to 2012, 145 awards in 46 States, the District of Columbia, and 

the Virgin Islands were made to training organizations, totaling $70 million.

Data Sources 

The two national sources of data on the beginning-farmer population are the Agricultural Resource Management 

Looking to the Future

 Beginning farms are experiencing success in a variety of ways, and no one pathway to success is 

dominant as beginning farmers seek to find their niche. There is some evidence that younger beginning 

farmers experience higher returns, on average, and are less likely to experience negative returns than older 

farmers. To the extent that this is true, this is encouraging for the future of U.S. agriculture, since beginning 

farmers are more likely to be in younger age groups.

5 Beginning Farmers And Ranchers At A Glance 2013 Edition

Beginning farms are less likely to participate in Government direct payment

programs, and when they do, average payments are less

Source: USDA, National Agricultural Statistics Service and Economic Research Service, Agricultural Resource 

Management Survey, 2011.

100

90

80

70

60

50

40

30

20

10

0

14

12

10

8

6

4

2

0

Percent Thousand $

Beginning farms Beginning farms

Participation in direct Government 

payment programs

Average Government 

payment to farm

Established farms Established farms

Share of all farms 

receiving payments

Share of farms within 

group receiving 

payments
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national 

origin, age, disability, and, where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic 

information, political beliefs, reprisal, or because all or a part of an individual's income is derived from any public assistance program. 

(Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program

information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). 

To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 

20250-9410 or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer.

Economic Research Service

Cover photo credit: USDA/NRCS

Data Sources 

ERS Website and Contact Person

The two national sources of data on the beginning-farmer population are the Agricultural Resource Management 

Survey (ARMS), conducted by USDA’s Economic Research Service and National Agricultural Statistics Service, and 

the Census of Agriculture, conducted every 5 years by NASS (USDA/ERS; USDA/NASS, 2009). See Ahearn and 

Newton (2009) for a detailed explanation of how these data differ. In the ARMS, the work experience of up to three 

operators farming their current or other farms is considered. Some farmers have 10 years or less of farming 

experience and operate a farm jointly with experienced operators; they are not considered beginning farmers and 

ranchers in this analysis when data on multiple farm operators are available. Of all operators with 10 years or less 

of farming experience, fewer than 10 percent are jointly operating a farm with an experienced operator.

Data about USDA farm support programs and FCS loans come from several agencies, including:

Definitions

Farm—Any place from which $1,000 or more of agricultural products were produced and sold, or normally would 

have been sold, during the year.

Principal operator—The farm operator identified by a survey respondent as being the major day-to-day decisionmaker for the farm business. Personal characteristics are reported for the principal operator.

Family farm—The majority of farm assets are owned by the principal operator and his or her extended family. 

Ninety-seven to 98 percent of U.S. farms are defined as family farms; only 2 to 3 percent are not family farms. 

Beginning farm/ranch—All operators have 10 years or less of farming experience.

References

Ahearn, Mary, and Doris Newton. Beginning Farmers and Ranchers, EIB-53, U.S. Department of Agriculture, 

Economic Research Service, May 2009. Available at: http://www.ers.usda.gov/publications/eib-economicinformation-bulletin/eib53.aspx

Shute, Lindsey Lusher. Building a Future with Farmers: Challenges Faced by Young, American Farmers and a 

National Strategy to Help Them Succeed, Tivoli, NY: National Young Farmers Coalition, November 2011. 

U.S. Department of Agriculture, Economic Research Service. “Agricultural and Resource Management Survey 

(ARMS) Briefing Room,” May 2012. Available at http://www.ers.usda.gov/Data/ARMS/GlobalAbout.htm

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, National Agricultural Statistics Service. Land Values 2012 Summary, August 2012.

Farm Service Agency (FSA). It is estimated that 37 percent of FSA loan guarantees are for Farm Credit System 

(FCS) loans, so there is some overlap in the FCS loans and FSA loan guarantees reported here. FSA is also a 

source of data on the Conservation Reserve Program-Transition Incentive Program (CRP-TIP).

National Institute of Food and Agriculture (NIFA). It provides data on beginning farmer training grants.

Farm Credit Administration (FCA). Data on FCS lending to beginning farms and ranches are administrative data 

supplied by FCA. A beginning-farmer loan, as reported by FCA, is a loan made to a farm or ranch where at least 

one operator has 10 or less years of experience in farming.

Information on beginning farmers and ranchers can be found on the ERS website at http://www.ers.usda.

gov/topics/farm-economy/beginning-disadvantaged-farmers.aspx. For more information, contact Mary 

Ahearn at mahearn@ers.usda.gov or 202-694-5583.

farmers are more likely to be in younger age groups.

6 Beginning Farmers And Ranchers At A Glance 2013 Edition