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Commodity Payments, Farm Business Survival, and Farm Size Growth

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  • Key, Nigel D.
  • Roberts, Michael J.

Abstract

In the last 25 years, U.S. crop farms have steadily declined in number and grown in average size, as production has shifted to larger operations. Larger farms tend to receive more commodity program payments because most payments are tied to a farm’s current or historical production, but whether payments have contributed to farm growth is uncertain. This study uses farm-level data from the census of agriculture to determine whether there is a statistical relationship between farm commodity program payments and greater concentration in production. The analysis indicates that, at the regional level, higher commodity program payments per acre are associated with subsequent farm growth. Also, higher payments per acre are associated with higher rates of farm survival and growth.

Suggested Citation

  • Key, Nigel D. & Roberts, Michael J., 2007. "Commodity Payments, Farm Business Survival, and Farm Size Growth," Economic Research Report 55968, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:55968
    DOI: 10.22004/ag.econ.55968
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    References listed on IDEAS

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    Cited by:

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    2. Ani L. Katchova & Mary Clare Ahearn, 2017. "Farm entry and exit from US agriculture," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 77(1), pages 50-63, May.
    3. MacDonald, James M., 2011. "Why Are Farms Getting Larger? The Case Of The U.S," 51st Annual Conference, Halle, Germany, September 28-30, 2011 115361, German Association of Agricultural Economists (GEWISOLA).
    4. Adamson, Dwight W. & Waugh, Andrew, 2012. "Farm Operator Entry and Exit Behavior: A Longitudinal Analysis," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124053, Agricultural and Applied Economics Association.
    5. Pépin, Antonin & Morel, Kevin & van der Werf, Hayo M.G., 2021. "Conventionalised vs. agroecological practices on organic vegetable farms: Investigating the influence of farm structure in a bifurcation perspective," Agricultural Systems, Elsevier, vol. 190(C).
    6. Wenbiao Cai, 2019. "Technology, Policy Distortions, And The Rise Of Large Farms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(1), pages 387-411, February.
    7. Daniel A. Sumner, 2014. "American Farms Keep Growing: Size, Productivity, and Policy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 147-166, Winter.
    8. Lovén, Ida & Nordin, Martin, 2020. "Are agri-environmental schemes boosting farm survival?," AgriFood-WP 2020:2, Lund University, AgriFood Economics Centre.

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