Farm Consolidation: Successes and Failures of Earlier Modeling
AAEA member releases ten years of research in AEPP
Agricultural production continues to shift to larger farms. Consolidation is widespread across almost all crop and livestock commodities, it has proceeded at persistent rates over the period from 1982 through 2017, and the aggregate shift has been quite large. At the same time, family farms still account for the vast majority of farms and of farm production, with no movement of production toward nonfamily operations. Consolidation encompasses shifts of production to larger family businesses. How much consolidation has occurred?
In the new article published in AEPP, “Tracking the Consolidation of U.S. Agriculture”, James MacDonald from the USDA-Economic Research Service releases a decade of research on the topic.
MacDonald says, “The finding that consolidation has been widespread across commodities and persistent over time implies that farm commodity programs cannot be a dominant driver of consolidation, since commodity programs focus on field crops, and not on specialty crops or livestock. Yet the pace of consolidation has been quite similar in fruits, vegetables, field crops, and livestock. The widespread and persistent pace suggests that technology plays and important role in consolidation. In particular, the introduction and diffusion of labor-saving equipment, materials, and organizational changes allow a single farmer or farm family to manage more acres or more animals.
The persistent trend in consolidation calls into question some earlier modeling that argued that consolidation resulted from the exit of farmers and farm labor in search of higher earnings outside of agriculture.”
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ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit www.aaea.org.
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