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Small Farms

Farm Classification System

The USDA Economic Research Service (USDA-ERS) has developed a farm classification system to divide U.S. farms into eight mutually exclusive and more homogeneous groups. The farm typology focuses on "family farms," or farms organized as proprietorships, partnerships, and family corporations that are not operated by a hired manager. To be complete, however, it also includes nonfamily farms. A collapsed farm typology combines the eight groups into three categories.

Small Family Farms (sales less than $250,000)

1. Limited-resource farms. Small farms with sales less than $100,000 in 2003 and low operator household income in 2003 and 2004. Household income is low if it is less than the poverty level in both 2003 and 2004 or if it is less than half the county median income both years.
2. Retirement farms. Small farms whose operators report they are retired (excludes limited-resource farms operated by retired farmers).
3. Residential/lifestyle farms. Small farms whose operators report they had a major occupation other than farming (excludes limited-resource farms with operators reporting a nonfarm major occupation).
4. Farming occupation/low-sales. Small farms with sales less than $100,000 whose operators report farming as their major occupation (excludes limited-resource farms whose operators report farming as their major occupation).
5. Farming occupation/high-sales. Small farms with sales between $100,000 and $249,999 whose operators report farming as their major occupation.

Other Family Farms

1. Large family farms. Farms with sales between $250,000 and $499,999.
2. Very large family farms. Farms with sales of $500,000 or more.

Nonfamily farms

1. Nonfamily farms. Farms organized as nonfamily corporations or cooperatives, as well as farms operated by hired managers.

Collapsed Farm Typology

The collapsed farm typology combines the eight farm typology groups into three categories:

• Rural residence farms. Includes limited-resource, retirement, and residential lifestyle farms.
• Intermediate farms. Includes farming occupation/lower-sales and farming occupation/higher-sales farms.
• Commercial farms. Includes large, very large, and nonfamily farms.