What We Know About the Demographics of U.S. Farm Operators
Prepared
by Rich Allen and Ginger Harris
National Agricultural Statistics Service
U.S. Department of Agriculture
Agricultural
Outlook Forum 2005 Presented: Friday, February 25, 2005
Complete
Report: TXT | PDF
Introduction
Every
five years when the census of agriculture results are released
new alarms are sounded about the advancing ages of farmers
and what it will mean for farm structure and farm succession.
Unfortunately, census collections through 1997 provided
limited information to shed light on those concerns. This
was particularly true since demographic data such as gender,
age, race, and Hispanic ethnicity were collected only for
the “principal” operator of each farm. However,
for the 2002 Census of Agriculture information was collected
for the first time on the total number of operators on each
farm, and demographic information for the first three operators.
Another key 2002 addition was asking how many individuals
lived in the household of each operator.
This
paper is one of the first attempts to glean meaning from
the new questions. Most tables in the paper extract information
already available in the 2002 Census electronic files. A
few data tables were generated by reanalysis of the originally
reported data for multiple operators of the same farm. All
tables are available on the National Agricultural Statistics
Service (NASS) Web site at www.nass.usda.gov/ under Census of Agriculture.
Two
caveats are essential. First, the 2002 Census of Agriculture
did not collect data specifically on farm operation succession
planning. Farm succession surveys require a fairly long
series of questions in order to gain a fuller understanding
of the considerations which have gone into succession planning—many
more questions than could be asked in a general purpose
census data collection.
Secondly,
since this paper examines interrelationships among the available
data items in order to identify operations which appear
to have potential succession plans in place, it assumes
there is a desire to continue the present operation as an
entity. That would ignore operations where there may be
succession plans to merge the present operation with operations
of other family members. It also provides no information
on operations where the present owners/operators plan to
maintain land ownership within the family but the succession
plan is to select an outside tenant to farm the land.
Average
Ages of Principal Operators
The
average age of all U.S. principal farm operators in the
2002 Census was 55.3 years of age. This average has been
more than 50 years of age since at least the 1974 Census
of Agriculture and has increased in each census since 1978—usually
by one year or more from one census to the next. (See
Table 1.) In addition, the percentage of principal farm
operators 65 or older has risen consistently since 1978
(when it was about 1 in 6) and reached 26.2 percent (more
than 1 in 4) in 2002. At the other end of the spectrum,
the percentage of principal operators with average ages
of less than 35 years has been declining since 1982, when
it was 15.9 percent, and was only 5.8 percent in 2002. (On
a relative basis, the percent of principal operators who
are 34 years or younger has dropped about 20 percent in
each subsequent census since 1982.)
Map
1, from the NASS on-line Census of Agriculture Agricultural
Atlas, displays county level average ages of principal farm
operators. Map
2, displays the county percentages of principal farm
operators 65 years of age or greater. Both maps indicate,
in general, lower average ages in the upper Midwest and
along the Mississippi River Delta in Arkansas.
The
average age of principal farm operators in all states in
2002 was above 50 years, with 52.9 in Minnesota being the
lowest average and 57.2 in Mississippi being the highest.
(See Table 2.)
One factor that does seem to influence average age by State
is climate. The 13 states with average ages of 54.1 years
of age or less (1.2 years under the National average) are
Idaho, Indiana, Maine, Minnesota, Nebraska, New Hampshire,
New York, Ohio, Pennsylvania, South Dakota, Vermont, Wisconsin,
and Wyoming—all cool or colder climates. The nine
states with average ages of 56.5 years of age or more (1.2
years over the National average) are Alabama, California,
Florida, Georgia, Hawaii, Mississippi, South Carolina, Texas,
and Virginia—all in warmer parts of the country than
those with the lower average ages. It appears these relationships
have been there over time. The average age of Alaska, Iowa,
Nebraska, North Dakota, and South Dakota farmers was under
50 years of age until 1992 and until 1997 for Minnesota.
Another
way of evaluating age relationships is to examine average
age by value of sales. There are definite age/income class
patterns in the 2002 Census of Agriculture data. (See
Table 3.) The average ages of principal farm operators
in all market value of sales categories above $50,000 were
below the National average for all farm operations, with
the lowest average of 51.5 years occurring for operations
with sales between $500,000 and $1 million. The same relationships
and age of 51.5 also held when sales and reported government
payments were combined. In contrast, all but one of the
market value of sales classes below $50,000 had average
ages of principal farm operators above the National average.
If market value of sales and reported government payments
are combined, both the $10,000 to $24,999 and $5,000 to
$9,999 income classes had average ages of 57.0 years of
age. If government payments are excluded, the highest average
age for any category is 56.6 years of age for $10,000 to
$24,999.
Since
farms and ranches in the United States vary so greatly in
size, we might not expect clear cut relationships of age
and farm size. However, for completeness those 2002 results
are shown in Table
4. Principal farm operators of farms 49 acres in size
or smaller and those with farms of 500 acres or more had
average ages less than the 55.3 overall average. The highest
average ages (57.0 years or higher) were for the 3 size
categories between 140 and 259 acres.
One
significant way of examining average age is by the type
of farming being practiced. There are definite age/type
of farm relationships in the 2002 Census of Agriculture
data. (See Table 5.)
When each farm is classified into the North American Industry
Classification System category description which best defines
its major agricultural activity, we find that the average
ages of farm operators were higher than the National average
for only 3 of the 14 categories. However, those 3 categories
of beef cattle ranching and farming with an average age
of 56.7 years, fruit and tree nut farming with an average
age of 57.7 years, and “other crops” farming
with an average age of 57.5 years account for 56.5 percent
of all U.S. farms. Beef cattle ranching and farming type
of farms themselves make up 31.2 percent of all farms. The
lowest 3 average ages of principal farm operators by type
of farm were 49.2 years of age for hog and pig farming,
50.2 years of age for dairy cattle and milk production,
and 51.6 years of age for poultry and egg production. The
lowest average age of principal farm operators for any of
the crop specializations was 52.4 years of age for cotton
farming.
Table
6 presents average age comparisons for a number of other
classifications of farms. Principal farm operators who indicated
their primary occupation was farming averaged 57.0 years
of age, compared to 53.0 for those who indicated an occupation
other than farming. Principal farm operators who were full
owners of their operations averaged 57.0 years of age, compared
to 53.1 years of age for part owners and 47.2 for those
who were tenants without owning any land. Principal farm
operators who were sole operators averaged 56.2 years of
age, compared to 53.8 years of age for those with multiple
operators.
Also
included in Table 6 is information by type of organizational structure. Principal
farm operators of individual or family operations averaged
55.3 years of age, the same as the average age of all U.S.
principal operators. Principal farm operators for the 129,593
total partnership operations averaged 56.0 years of age,
while the 69,417 principal operators for the partnerships
which were registered under state law averaged 55.4 years
of age. The lowest average ages for principal operators
were for those operating corporate farms, with an overall
average of 53.9 years of age. Principal operators of family
corporations averaged 54.1 years of age for both all family
corporations and those with 10 or fewer stockholders. Principal
operators of corporations other than family averaged 51.8
years of age and 52.0 years for those corporations other
than family with 10 or fewer stockholders. The highest average
age of principal farm operators (57.2 years of age) was
reported for those in charge of farms classified as “other,”
which includes cooperatives, estates, trusts, institutional,
etc.
Multiple
Operator—Multiple Household Data
One
of the most striking 2002 Census of Agriculture data features
is that NASS estimated the number of U.S. farmers for the
first time. Past censuses had collected only Aprincipal@
operator information, even in cases such as partnerships
where shared responsibilities obviously existed. That led
to the common misstatement that the U.S. has only 2 million
farmers; the statement should have been we have 2 million
farms.
The
2002 census form asked how many individuals on each operation
qualified as farm operators and how many were women. To
avoid adding additional pages, space was provided for detailed
demographic information on only the first three operators
which may lead to some confusion in reviewing 2002 data
tables. Some 62.3 percent of all farms reported only one
operator but, in total, 3,115,172 operators were identified
on the 2,128,982 farms. Of the operators, some 847,832 were
women.
Table
9 presents a basic state by state summary. It illustrates
that the percentages of farms reporting multiple operators
vary greatly by state, and without definite regional patterns.
Six states, Arizona, Nevada, New Hampshire, Oregon, Vermont,
and Wyoming, reported that over half of all farms had multiple
farm operators. Ten states, Alabama, Georgia, Illinois,
Iowa, Kansas, Louisiana, Mississippi, North Carolina, North
Dakota, and South Carolina, reported that less than one
third of their farms had multiple operators.
Selected
demographic information is provided in Table
7 for the 3,053,801 operators listed as the principal,
second, or third operators. This table provides a perspective
that some younger individuals are in fact engaged as farm
operators. While the average age of principal operators
was 55.3 years of age, the average age of second operators
was 49.5 years and the average age of third operators was
41.9 years. The age distributions of second and third operators
are significantly different than those of principal operators.
Instead of the 26.2 percent of principal operators who are
65 years or older, the comparative figures are 12.9 percent
of second operators and 11.0 percent of third operators.
Instead of the 5.8 percent of principal operators who are
under 35 years of age, 11.8 percent of second operators
and 35.7 percent of third operators are in the younger age
categories.
The
number of women principal operators increased by 13.4 percent
from the 1997 Census of Agriculture to 2002, in line with
the double digit increases in all recent censuses of agriculture.
Women operators are 11.2 percent of principal operators
but 27.2 percent of all operators. The average age of women
principal operators declined from 57.2 years in 1997 to
56.7 years in 2002. The average ages of women second and
third operators in 2002 were 50.3 and 45.2 years, respectively
(shown in Table 53 of the 2002 Census of Agriculture Volume
I results).
New
questions were also added on the number of households sharing
in each operation=s net farm income and the number of people
living in the households of the first three operators. (The
income sharing results are summarized in Table
8.) Most (1,647,030) operations reported only one household
but 313,574 reported two families, 62,987 reported three
families, 28,846 reported four families, and 21,173 reported
five or more families. (Note the total does not equal the
number of all farms since the question did not apply to
hired managers.)
The
data on numbers of people living in the households of the
first three operators were summarized (by race) in Table
52 of the 2002 Census of Agriculture Volume I results. A
total of 5,717,302 people were reported as living in the
households of principal operators. In addition, 709,821
live in households of the second operators (if they have
a separate household) and 186,540 in households of third
operators. NASS was not attempting to create a new Afarm
population@ data series but this information flowed naturally
from the new questions.
In
addition, the census of agriculture added a new question
on the share of the principal operator’s income coming
from the farm operation (See
Table 8.). For all principal operators (excluding hired
managers), 63.1 percent reported less than 25 percent of
their income coming from the farm operation. Only 16.3 percent
reported that 75 percent or more of their income came from
the farm operation.
Analysis
of Multiple Operator Data
The
relationship data for multiple operators were examined in
alternative ways in order to determine what might constitute
evidence that farm succession plans are in place. The overall
approach was essentially a three dimensional review of age,
gender, and household of residence among the principal,
second, and third operators. After that review, the conclusion
was to define an operation with operators of “different
generations” as possibly having a succession plan.
For the analyses in this paper, different generation is
defined as a difference of more than 20 years between the
oldest and at least one of the other operators based on
actually reported ages.
Previously
published tables showed that the majority of the combined
second and third operators are women. Tabulation of the
data by operator number, however, shows that women only
make up the majority of the second operators. The majority
(63.5 percent) of the third operators were men (See
Table 7). The question then arises as to the relationships
between the multiple operators.
One
analysis approach was to examine gender relationships between
the principal operator and the second and third operators.
It appears that the majority of the male-female and female-male
relationships may be husband-wife operations. Several data
relationships suggest these combinations of operators are
spouses. Each operator was asked to report the number of
persons living in their household. If the principal operator
reported a household total that included other operators,
those operators were to report zero members in their household.
Most male/female and female/male combinations of first and
second operators report residing in the same household.
In addition, most of these combinations (male-female, female-male)
of operators report being of similar age, with the women
likely to be a few years younger, typical of age relationships
between spouses in this country.
The
male-male and female-female operator relationships are much
more of a mixture and not clearly defined by the data items
reported on the census. Some are possibly siblings since
they are basically of the same age cohort and not in the
same household. Others appear to be father-son or mother-daughter
(or equivalent operations) based on the age distributions.
The
majority of farms report a male principal operator and a
female second operator (65.4 percent). The next most common
combination is a male principal operator and a male second
operator (22.1 percent), followed by a female principal
operator and a male second operator (10.7 percent). The
least common operating relationship was two female operators
(1.9 percent). Because of the belief that many of the multiple
operators reporting are couples (spouses), we started the
generational analysis by separating farms into the gender
combinations reported above.
Analysis
of Multiple Generation Operator Data
Of
the 803,127 farms that reported multiple operators, 609,496
of them (75.9 percent) consist only of operators from the
same generation. Thus, only 193,631 of the total 2,128,982
operations (or 9.1 percent of all farms) indicate that they
have operators from different generations working on their
farm operations—as operators.
Table
11 provides state by state calculations of the percent
of farms with multiple operators and with operators from
different generations. The overall U.S. average is 24.1
percent. Illinois, at 30.4 percent, had the highest state
level percent. States with less than 20 percent were Idaho,
Maine, and Oregon.
By separating
out the farms most likely to be operated by spouses and
looking at the age of the principal operator, a better picture
can be derived of whether the farm operation has different
generations of operators involved (the assumption being
that spouses belong to the same generation) (See
Table 10). When the analysis is limited to farms with
a male principal operator and a male second operator, we
find that over half (52.6 percent) of the operations reporting
more than one operator involve operators of a different
generation. Farms where the male principal operator is between
35 and 44 years of age are the least likely to report male
second operators of different generations (34.5 percent).
Both older and younger principal operators are much more
likely to report having a second operator of a different
generation. For principal operators 75 years or more in
age, 85.3 percent report farming with a second operator
of a younger generation. For operators between 65 and 74,
72.7 percent report farming with a second operator of a
younger generation. When a male principal operator and female
second operator combination is present, only 5.8 percent
are of different generations and only the under 25 years
of age and over 75 years of age categories for the principal
operator exceed 10.0 percent.
When
the principal operator is a female, the overall likelihood
of a farm having different generations between the principal
and second operator is higher than for male principal operators.
However, there are only 100,672 operations with female principal
operators in Table
10 compared to the 702,455 with male principal operators.
For operations with a female principal operator and a male
second operator (most likely spouses) only 21.0 percent
of the operations report that the two operators are in different
generations. However, 44.5 percent of the operations with
a female principal operator and a female second operator
were from different generations.
Many
farms in the census of agriculture are quite small since
the definition of a farm is an operation with $1,000 of
agricultural production and sales or an operation that normally
would have had $1,000 of sales. Therefore, many operations
would not be expected to be supporting multiple operators.
One approach for further examining possible succession planning
indications from the standpoint of multiple generational
operators was to look at farms by farm sales class. Three
values of sales categories were examined: total sales of
less than $100,000, $100,000 to $249,999, and $250,000 and
over. The $250,000 and over category corresponds to those
farms not considered as small family farms by the USDA Small
Farms Commission. The $100,000 to $249,999 category was
included since it corresponds to the definition of Farming-occupation/high
sales that the Economic Research Service of USDA has adopted
for their typology of small farms.
Table
11 indicates higher percentages of multiple generation
operations as the farm income rises. Under $100,000, the
percent is 21.4 percent or essentially 1 out every 5 farms
with multiple operators. This rises to 34.3 percent for
the $100,000 to $249,999 operations and up to 38.8 percent,
or nearly 2 in 5, for the $250,000 and higher category.
The states in the middle category with the highest percentages
were South Carolina, Tennessee, and Utah, all above 45.0
percent. For the highest sales category farms, New Hampshire,
Utah and Nevada had the highest percents of multiple generation
operators, all at 50.0 percent or higher.
Another
way of examining operations with multiple generations is
to cross classify by types of farms and income class. Table
12 presents information for the same North American
Industry Classification System categories listed earlier
in Table 5. There
are some interesting, and perhaps not always intuitively
explainable, relationships. Dairy farms had the highest
percentage of different generations overall and in the over
$250,000 sales category. Cotton farms had the second highest
percentage of overall percentage and a high percentage of
under $100,000 of sales farms with multiple generations.
Poultry farms had the lowest percentages of multiple generation
operators in each sales category but not the lowest when
all farms are considered because so many of the poultry
farms were in the above $250,000 category.
Summary
and Conclusions
This
write-up started by commenting that each subsequent census of agriculture has indicated that the average age
of U.S. (principal) farm operators is increasing. The 2002
Census of Agriculture once again indicated that the average
age of principal operators increased more than one full
year from 1997. However, the 2002 data collection provided
new information that average ages of second and third operators
were lower than for the principal operator average and percentages
of operators under 35 years of age were higher.
The
detailed analyses in this paper perhaps present mixed signals
as far as farm succession. New 2002 Census of Agriculture
data indicate that 37.7 percent of all farms reported multiple
farm operators—a indication of succession potential.
However, further analyses indicate that the majority of
the additional operators are most likely spouses.
The
simplistic approach in this paper for evidence of a possible
succession plan in place was to count multiple operators
with at least a 20 year age difference among those operators
as having evidence of a possible succession plan. Some operations
may have already implemented a succession plan. Note that
over 60 percent of the male principal operators under 25
years of age and almost 50 percent of the male principal
operators between 25 and 34 years of age with a male second
operator have a second or third operator who is at least
20 years older.
In total,
only 9.1 percent of the 2,128,982 farm operations qualified
as having evidence of possible succession planning under
the criteria of having multiple generations presently reported
as farm operators. Therefore, there must be many other succession
approaches in place—ones that do not require a successor
to be presently in place as an operator.
The
calculated percents of operations implying a possible succession
plan in place do vary considerably by state, income sales
classes, and types of farms. Farms with multiple operators
and sales of $250,000 or more were nearly twice more likely
(38.8 percent) to have multiple generational operators than
those farms with less than $100,000 in sales (21.4 percent).
Dairy, cotton, tobacco, and grain and oilseeds farms were
the most likely to have operators from multiple generations,
if they had multiple operators. |