Why Beginning Farmers Differ: Scale, Community, and Productivity Dispersion in U.S. Agriculture

Over one million U.S. farmers report ten or fewer years of farming experience, yet little is known about how productivity differences vary across the farm life cycle and Census-panel persistence. We use linked farm-level microdata from the 2012, 2017, and 2022 Censuses of Agriculture to decompose total factor productivity differences for beginning and established farms. Following the X-inefficiency literature, which links inefficiency to managerial ability and organizational performance, we estimate group-specific stochastic frontiers that model technical inefficiency as a function of own-operator managerial-ability proxies and similarity-weighted county-peer averages of those proxies. Differences in scale efficiency account for a large share of productivity dispersion among small farms and are especially pronounced among operations that later leave the Census panel. The community channel accounts for over 40 percent of the identified inefficiency contribution among beginning farms and exceeds the own-operator channel for small beginning livestock operations. The results point to beginning-farmer policies that combine scale-adjustment support with investments in farmer networks, peer learning, extension capacity, and community-based support.