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Limit Up

By Tori Uhland

February 16, 2024

It’s been an exciting week here in Kansas City after the Chiefs became back-to-back Super Bowl Champions. This Broncos fan didn’t wear red, but I will admit that the Chiefs are fun to watch. It has been fun to experience “Chiefs Kingdom” firsthand and the success of the team is a cool thing for the city. We even lucked out with some beautiful weather for the parade last week – over 60 degrees! Unfortunately, the big celebration came to a tragic ending. It is extremely sad what the world has come to. While the weather was beautiful and a welcome change from the much-below freezing temperatures a few weeks ago, temperatures in the 60s in mid-February aren’t so good for feed demand.

Last Tuesday, the USDA released the data from the 2022 Census of Agriculture. According to their findings, farmland in the United States has decreased by nearly 20 million acres since 2017. There were 900.1 million acres of land in the country that were dedicated to farming in 2017, compared to 880.1 million acres in 2022. The report also shows that now there are approximately 1.9 million farms in the US – 142,000 fewer than were reported in 2017. The downtrend has been going on for decades now. We’ve lost over a half-million American farms since the 1980s. The USDA classifies a “farm” as any operation that sells at least $1,000 worth of product per year.

This trend in fewer farms and fewer acres points to another persistent trend: consolidation. While the number of farms is shrinking, the size of the farm is growing. The number of farms may have gone down by 7 percent between 2017 and 2022, but the average farm size increased by 5 percent. Operators are moving towards different methods of running their businesses. Farm income in 2022 also broke records that had been set in the 1970s and 1940s, showing that farms are growing both physically and fiscally. Most of the growth in farm size can be attributed to corporations. During this 5-year period, the number of farm corporations increased by 9 percent while the number of family/individual/partnership and other entities with farms declined by 8 percent.

The Census also highlighted some interesting demographics about producers in the United States. Over 63 percent of US farmers are 55 years old or older. We have known that the average age of the farmer is growing older, which is concerning, but there was some positive information to come out of this report. Over the past decade, younger producers have been returning to the farm. In the last 5 years, operators under the age of 25 increased by 12 percent; operators between 25-34 increased by 2 percent, and those aged 35-44 increased by 9 percent. In 2017, only 27 percent of producers had been operating a farm business for 10 or fewer years, but that number grew to 30 percent in 2022.

In my opinion, one of the most eye-opening figures shown in the Census of Agriculture was the number of dairies. The USDA reported 36,024 dairy farms in the United States in 2022; this number was down by over a third since the last census was conducted in 2017. In only 25 years, from 1997 to 2022, the number of dairies decreased by 89,017. Between this and the overall cattle inventory at 73-year lows, it is not surprising that corn and soybean futures made 3-year lows last week. There is no apparent bottom in the futures prices – the downtrend in is very clear, and I’m not sure what it would take to turn that around quickly.

Last week was a big data week for the USDA. Not only did they release the 2022 Census numbers, they also had their 2-day, 100th annual Agricultural Outlook Forum event. I will be discussing all of that information next week!

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