General Farms, Primarily Crop

SIC 0191

Industry report:

Specified three-digit classifications are: 011 cash grains (wheat, rice, corn, and soybeans); 013 field crops (cotton, tobacco, sugarcane, sugar beets, and potatoes); 016 vegetables and melons; 017 fruits and tree nuts (berries, grapes, citrus and tree fruits such as apples, cherries, peaches, and pears); and 018 horticultural specialties (ornamental and nursery products and food crops grown under cover, such as mushrooms and bean sprouts).

Industry Snapshot

Despite steady decline over the years, farming has long been one of the staple industries in the U.S. economy, and the United States remains the world leader in crop harvesting. The decline is due in part to the trend of large agribusiness firms increasingly taking the place of smaller family farms, resulting in reduced employment levels as farms tried to boost efficiency to remain competitive.

According to the U.S. Department of Agriculture, in 2004 there were 2.1 million farms in operation in the United States, with a combined total of 937 billion acres. The average farm size was recorded at 443 acres. All crop areas except tobacco showed growth from the previous year, and the combined farm sector was valued at more than $101 billion. California, Texas, Nebraska, Georgia, Oklahoma, and Iowa were the biggest producers in terms of farm revenue.

In the mid-2000s, farmers were continuing to face a host of challenges relating to environmental and health concerns. As consumers and regulators placed heightened emphasis on water and land conservation and the minimization of pollutants, many farmers have rapidly attempted to reorganize their production to become more environmentally sound. Moreover, concern was on the rise over the presence of chemicals in foods, forcing farmers to rethink their pest- and quality-control practices. Finally, the practice of genetically modifying seeds and foods has generated national and international controversy relating to environmental, economic, health, and ethical concerns.

By the late 2000s, by far the largest farming industry dilemma was centered on the upcoming farm bill set to expire in 2012 and the mounting budget deficit. Also, rising commodity costs predicted for 2009 threatened to bring farming earnings down compared to the previous year. Going forward, farmers were well aware they needed to focus on yielding a larger crop while their area for planting remained the same as the worldwide population continues to climb. Meanwhile, pioneers were busy engineering products that would be available as early as 2012 and 2013 to help farmers reach their goal.

Organization and Structure

The majority of farms in the U.S. are classified in the industry were owned by sole proprietors, with a small percentage organized as partnerships, family corporations, or non-family corporations. Even fewer farms were operated by other entities, such as cooperatives, institutions, and estates. These statistics were comparable to the ownership structure for all U.S. farms.

Farm operators were classified by their ownership interest in the land. Full owners owned the land they operated; part owners operated part of their own land and rented the remaining land; tenants rented the land they worked. Most of all general crop farms were predominantly operated by full owners, as opposed to partners or tenants.

Background and Development

European colonists learned about cultivating plants indigenous to the United States, developed an agricultural industry, and modified it to suit their own needs. European settlers brought horses and oxen to the continent and put them to work as draft animals. They imported seeds and introduced wheat, rice, barley, oats, rye, and buckwheat. In areas with rich soil, abundant production soon surpassed local demand, and exports were used to finance imports of manufactured goods in the seventeenth century. Crop production varied by area; in New York, Pennsylvania, New Jersey, and Delaware, farmers were primarily grain producers. In addition to grains, farmers in Maryland, Virginia, and North Carolina grew tobacco and vegetables. Rice and indigo were the main crops in South Carolina and Georgia. The commercial production of indigo, which had prospered under British rule because of preferential trade treatment, ceased following the Revolutionary War. Cotton was not fully developed as a commercial crop until later.

Colonies were generally forbidden from trading with countries other than their "mother" country. English colonies traded only with England; Dutch colonies traded only with Holland; Spanish colonies traded only with Spain; and French colonies traded only with France. This type of trade restriction was one of the contributing factors leading to the Revolutionary War.

Events surrounding the war's conclusion set the stage for the development of farming practices within the United States. Under the terms of the peace treaty signed in 1783, England surrendered its claim to the colonies and its claim to an additional 237 million acres located west of the Ohio River. The original 13 states agreed that the western territory would be held in public domain by the federal government for the purpose of distributing it equitably to settlers.

The process of selling units of western land to farmers began in 1785, two years before the Constitution was adopted. Under the terms of the Land Survey Ordinance, lands were portioned off into townships containing 36 sections of 640 acres (one square mile per section). These were further subdivided into 16 units. Farmers could purchase up to four units, equaling one-quarter section (a total of 160 acres), at one dollar per acre. Within 10 years of the end of the Revolutionary War, an estimated 100,000 settlers had begun farming in the Ohio River valley and the Cumberland River valley.

Farmers who moved west often left depleted soils in the east. The overproduction of single crops, such as cotton or tobacco, drained the land of the nutrients needed to maintain soil fertility. President Thomas Jefferson was a leader against the practice of single-crop agriculture. He believed that farms should be diversified and self-sufficient. His experiments with crop rotation and botanical research made significant contributions to the nation's agricultural industry. Jefferson also developed an improved moldboard (the part of a plow that turned the soil) to improve plowing efficiency. To help farmers share agricultural knowledge, agricultural societies were formed.

A major innovation occurred at the end of the eighteenth century, when Eli Whitney invented the cotton gin, a mechanical device able to separate cotton fibers from cotton seeds. The combination of the cotton gin and slave labor made cotton a profitable crop for plantation-style agriculture. Another crop grown on plantations was tobacco. As the South increased its reliance on single-crop, nonfood agriculture, it became dependent on imports from other regions for food.

The nineteenth century opened with new opportunities for farming in America. The United States purchased the Louisiana Territory in 1803, opening up possibilities for new settlers from the Mississippi Delta to the Dakotas. The century also brought a mechanical revolution to farming. John Lane introduced the all-steel plow. Cyrus McCormick invented the horse-drawn reaper, a device able to harvest more than ten acres per day--a fourfold increase over what a skilled worker could harvest. McCormick's reaper was first built in 1831 and patented in 1834. Other nineteenth-century farm machinery developments included two-row corn planters, combines, threshing machines, and hay balers.

As the nation's infrastructure developed, the ability to transport western farm products to eastern markets improved. The number of settlers moving west increased, and demand for western land intensified. The Preemption Act of 1841 allowed squatters the right to purchase up to 160 acres at $1.25 per acre. The Swampland Act of 1849 was designed to create more cultivatable land by draining swamps.

Cotton and tobacco continued to make major contributions to the country's economy. In 1850 almost half of all U.S. exports were cotton shipments headed for English textile mills. In 1859 U.S. tobacco growers harvested 430 million pounds, a 106 percent increase over a ten-year period. In 1860 approximately 60 percent of the nation's working population was involved in the farming industry. Their efforts brought a steady increase of U.S. agricultural products to the world marketplace.

The Civil War disrupted farming, particularly in the South, where plantations were devastated, and the region's economy ground to a halt. According to J. J. McCoy in To Feed a Nation, the cash value of southern plantations fell by 48 percent between 1860 and 1870. The post-Civil War years in the South saw an increase in the numbers of tenant farmers and an increase in the number of diversified farms as the region made an attempt to improve its production of food.

During the Civil War, several major agricultural initiatives were undertaken. On May 15, 1862, President Abraham Lincoln signed legislation creating the U.S. Department of Agriculture (USDA). Also in 1862, the Homestead Act was implemented. Under its provisions, heads of households could receive up to 160 acres of publicly held property, for a filing fee of $10, if they farmed it for five years.

In 1877 the Desert Land Act provided another means by which settlers could receive land. The act required that lands received be irrigated. It also recognized that arid land was less productive than other types of land and, as a result, permitted people to acquire up to 640 acres. In 1887 the Hatch Experiment Station Act was passed to fund agriculture experiments and investigations in all states and territories. In 1889 the USDA was promoted to the level of a cabinet office and began publishing its Yearbook of Agriculture. In 1898 the USDA established an office for the systematic introduction of foreign plants. The long-standing governmental policy of transferring publicly held lands to private hands was challenged in the 1890s by a conservation movement. Under the influence of conservationists, the government started setting aside public lands to preserve forests and watersheds.

During the first decades of the twentieth century, U.S. farmers prepared for war in Europe. Government pronouncements encouraged the production of excess food in anticipation of heavy export possibilities. Farmers expanded operations and put more land under cultivation. When the United States entered the war, labor shortages intensified the development of costly labor-saving machinery. High commodity prices during the war years led to high profits for farmers. Following the war, however, European nations had no money with which to buy American products. The export market failed to meet expectations, and U.S. farmers were forced to sell surplus crops at low prices.

During the 1920s, the U.S. farming industry endured a time of crisis. In 1922, for an average farmer, the estimated cost of growing a bushel of oats was more than the sale price. Between 1922 and 1927, an estimated 1 million people left farms in search of other work. Small farmers could not afford to purchase the labor-saving machinery necessary to reduce their costs or buy expensive improved seeds to improve per-acre yields. In addition, sharecroppers and tenant farmers, unable to make use of modern farming methods, relied on traditional methods, which caused damage to the soil and further reduced crop yields. As a result, poor farmers became poorer, and soil depletion problems worsened, particularly in the South and the Southwest. Soil erosion led to dust storms that were exacerbated by drought conditions. In Kansas, Missouri, and Oklahoma, the topsoil blew away, resulting in the Great Dust Bowl. Throughout the 1930s, federal efforts were aimed at improving the farmers' economic plight and preserving the nation's soil.

With war again brewing in Europe, farmers once more were encouraged to expand production in anticipation of increased demand for U.S. products abroad. In a series of events paralleling those of the World War I era, heavy demand existed during the war years, and exports plummeted following the war. Farm surpluses once more led to declining crop prices and difficult economic conditions for farmers. In 1948 Congress passed the Agricultural Adjustment Act, which included price supports for farm products.

Despite the economic turmoil, technological advances for the farming industry continued. The 1950s and 1960s brought expanded reliance on machinery. By 1955 sprinkler irrigation systems were being used on 2 million acres. A mechanical tomato harvester was developed in 1959. Tractor sales increased, and the development of a tractor-mounted electric generator enabled farmers to use electricity in remote areas.

Traditional plowing methods were blamed for fostering soil erosion. During the late 1980s, researchers estimated that 4 billion tons of soil were lost every year to erosion. Although crop-management practices aimed at reducing soil losses by reducing or eliminating plowing had been under investigation since the 1930s, they did not become feasible until the development of chemical weed-control methods during the 1960s. During the fuel crises of the 1970s, farmers began to look more favorably on the possibility of eliminating plowing.

The advent of giant machinery transformed the farming industry. Large machines required large areas to operate efficiently. In addition, they needed uniform conditions. As a result, small and mid-sized diversified commercial farms became less profitable. Owners found it necessary to supplement their incomes with nonfarm work. Some sold family farms to larger entities. According to a USDA estimate, 5 to 8 percent of all farmers left farming in 1985. By 1997 the farm population totaled 5.02 million, representing only 1.9 percent of the total U.S. population.

As the number of farms in the United States fell, the average number of acres per farm increased. Between 1970 and 1980, average farm size grew from 374 acres to 426 acres. By 1997 it stood at 487 acres. Total acreage in farms overall, however, decreased. In 1970 the nation's farms totaled 1.1 billion acres; in 1980, only 1 billion acres were classified as farmland; in 1990, the total had dropped further to 960 million acres. By 1997 U.S. farmland totaled 931.79 million acres.

The farming industry in the late 1990s was plagued by the lowest commodity prices in decades. This trend was especially harmful to small farmers, who require a greater percentage of their budget to move products to market. By 1999, however, the entire industry was growing desperate. Corn output that year totaled 1.47 billion bushels, marking the third-largest single-year drop (about 3 percent) in U.S. history. The drought that hit the American Northeast that summer exacerbated the problem. Meanwhile, profits continued their decade-long decline. According to USDA reports, only 23 cents of every dollar spent on food represented farm value. The largest component cost of food was labor (38 cents), a figure that rose 4 cents during the 1990s. Other costs included packaging (8.5 cents), transportation, machinery, depreciation, advertising, fuels, taxes, and interest.

One reason for low farm profits was the existence of a surplus for many farm commodities. The Federal Agriculture Improvement and Reform Act of 1996 (FAIR), also known as the Freedom to Farm Act, was designed to help alleviate surpluses in traditional crops--such as corn and soybeans--by encouraging farmers to diversify into new crops. Congress drafted the bill to encourage U.S. producers to become more market-oriented in operations and not rely as heavily on government supports, subsidies, and planning. This new legislation marked the beginning of the gradual departure of government from farming and planting decisions. FAIR called for the elimination of price supports after 2002, with price support payments decreasing over the years leading up to 2002.

While this law was always a thorn in the side of small farmers and populist farming organizations for reducing government programs to aid farmers, generally to the advantage of large agribusiness firms, the Freedom to Farm Act has met with increasing calls for reexamination from the latter groups, as the slumping commodities prices began to eat into profit margins. The American Farm Bureau Federation in 1999 voted to reexamine Freedom to Farm, seeking greater crop and revenue insurance and assistance programs. Despite Freedom to Farm, the U.S. farming industry still relies heavily on governmental subsidies. In 1999 the U.S. government made $22.9 billion in subsidy payments to crop farmers. Intense lobbying also brought $7.4 billion in relief aid in the fall to help farmers recover from the drought.

In addition to facing economic challenges, the agricultural industry found itself under increasing criticism regarding environmental concerns. One issue regarded water conservation, as environmentalists spearheaded efforts to reduce consumption levels. A total of 279,442 farms, covering 55.06 million acres, utilized irrigated land in 1997. This represented 15 percent of all farmland. More than 50 million acres of this total was on harvested cropland. The average crop farm irrigated 197 acres in 1997, up from 159 acres a decade earlier. Although innovations in irrigation systems helped lessen water requirements, some people claimed that irrigating crops was depleting the nation's freshwater supply. Greater emphasis on efficiency led to positive developments, however; between 1982 and 1997, the rate of erosion by water on U.S. croplands was reduced by 24 percent.

Farms also were blamed for polluting water supplies. Contamination resulted from discharges of chemicals used in pesticides and fertilizers and sediment from soil erosion. Some critics estimated that as much as 80 percent of the nitrogen and phosphorous in the nation's freshwater supplies came from agricultural runoff. An estimated 55 percent of impaired river miles and 58 percent of impaired lake acres were attributed to agricultural runoff. In addition to surface water, groundwater supplies were impacted. One study estimated that half of the nation's drinking water wells contained detectable levels of nitrate. Nitrate levels higher than those recommended by the Environmental Protection Agency (EPA) were found in 2.4 percent of rural private domestic wells and 1.2 percent of community water systems.

In an effort to alleviate the problem, some farms installed grass waterways to catch sediments and to filter phosphorous and pesticides out of runoff. Catch basins were sometimes used to help control the flow of water from irrigation systems. Researchers also investigated ways to reduce nitrate contamination of groundwater supplies by improving plants' ability to use nitrogen. Fertilizer application methods also were under review. In addition to FAIR, President Bill Clinton also signed the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Federal Food, Drug, and Cosmetic Act (FFDCA) into law in 1996. These acts require the EPA to set tolerance levels for pesticide residue on fresh and processed foods. The former act regulates the manufacturing, sale, and use of pesticides, while the latter governs pesticide residues. The EPA also must register all new farm chemicals and reregister all old pesticides, denying the registration of some of the more noxious pesticides that have unreasonable effects.

In addition to the possible health consequences of nitrogen and phosphorous (both fertilizer nutrients), the chemicals were blamed for causing excessive algae growth in lakes and streams. Excessive algae growth was one cause of premature lake aging, a process called eutrophication. Sediment deposit from soil erosion was another contributing factor.

To mitigate these growing problems, many farmers began to incorporate conservation tillage. Conservation tillage differed from conventional tillage by the amount of soil surface covered with crop residue. While conventional tillage methods used plows to turn the soil and cover-crop residue, conservation tillage practices left crop residue in place to protect the soil from excessive wind and water erosion. Crop residue also helped retain moisture and reduce the need for irrigation. Although conservation tillage methods were effective in helping to reduce soil erosion, they typically required specialized equipment and relied on chemical herbicides to control weeds. The principal methods of conservation tillage used during the early 1990s were called no-till, ridge-till, strip-till, and mulch-till (also called reduced-till). No-till leaves the soil undisturbed from harvest to planting, with the exception of periodic nutrient injections; weed control is accomplished primarily with herbicides. Ridge-till conservation tillage likewise leaves the soil undisturbed, save for nutrient injections, while weed control is handled either by herbicides or cultivation; ridges are rebuilt during conservation. Finally, mulch-till disturbs the soil just prior to planting. No-till practices left the most plant residue on the soil and reduced soil losses by more than 75 percent. Other conservation tillage methods varied in effectiveness but generally reduced soil losses by 50 to 75 percent. Some type of conservation tillage was utilized on 109.8 million acres in 1997, while an additional 40.0 million acres were farmed in narrow strips to help prevent erosion.

Another area of conflict between farmers and environmentalists concerned the use of wetlands. During the early years of the twentieth century, the USDA promoted a policy of transferring wetlands to private ownership. USDA-endorsed programs were aimed at draining swamps and "reclaiming" land for cultivation purposes. During the mid-1970s, the USDA revised its policies concerning wetlands. In 1985 the Food Security Act defined wetlands based on soil and vegetation types and stopped price support payments to farmers who continued converting wetlands to crop lands. The American Farm Bureau Federation, lobbying on behalf of its member farmers, successfully opposed more restrictive federal wetlands regulations in 1989. By 1997, some 255,410 farms totaling 29.49 million acres were protected under Conservation Reserve or Wetland Reserve programs.

Not all farmers, however, were opposed to the efforts of the environmental movement. Some favored alternative agricultural methods relying on crop rotations to disrupt the reproductive cycles of weeds, insects, and crop diseases. Alternative agriculture, also called organic or natural, was a labor-intensive practice, and such crops were typically more expensive than those produced on farms employing traditional forms of cultivation.

Many general crop farmers have been successful in finding their niche in the growing organic-foods industry. Targeting customers concerned with the health and environmental risks associated with chemicals, pesticides, and genetically modified foods, the organics sector has emerged from specialty health stores and a fringe customer base to assume a significant position in the mainstream consumer market. Organic agricultural products constituted the fastest-growing sector of the farming industry during the 1990s, with annual sales of $5 billion in the United States by 1999. Organic farmers eschew the synthetic chemicals and gene-tampering technologies many farmers use to boost yields and create more productive livestock. To qualify as organic, crops must be completely free of such chemicals, a fact that requires organic farmers to plan carefully far in advance to ensure appropriate planting patterns. Organic crops must be maintained on land that is free from any chemical infiltration, including soil and water supplies. Because of the greater risk and investment required, organic farming is a more costly undertaking than nonorganic farming, and thus organic commodities fetch a higher price at the market.

By 2005, every state contained farmland that was certified organic, with a total of over 4.0 million acres--1.7 million acres of cropland and 2.3 million acres of rangeland and pasture--dedicated organic production. (California leads all states with over 220,000 acres of organic cropland, most of it yielding fruits and vegetables.) This represents only 0.5 percent of all U.S. cropland and pasture, however. Because of the greater risk and investment required, organic farming is a more costly undertaking than nonorganic farming. Furthermore, adoption of organic methods can be hampered by limited awareness of methodologies and a lack of larger-scale marketing support. Yet many U.S. producers are turning to organic farming in order to lower costs, conserve natural resources, and increase income, since organic commodities fetch a higher price at the market.

One of the hottest issues relating to agriculture in the late 1990s was the use of biotechnology to genetically alter seeds to boost yields or enhance food quality. More than 40 genetically engineered crops were developed between 1995 and 1999, while the amount of farmland devoted to such crops increased tenfold, reaching 76 million acres. About 37 percent of corn and nearly half of all soybeans incorporated biotech engineering. For many years, such crops were used primarily in livestock feeds, though that was changing by the end of the 1990s, when such products were increasingly being sold directly to consumers.

One reason for the turn toward biotechnology in crop production was the combination of demographics and geography. While the world population is expected to surpass the 10 billion mark by 2030, analysts project that farmers could face a severe shortage of adequate farmland. As a result, the ability to boost yields and limit pest infestation has increasingly become a priority. However, biotech alteration is also emblematic of the trend toward consolidation within the farming industry as bigger farms attempt to produce more for less input to remain competitive.

While proponents of genetically modified food technology contend that its use will lead to benefits for producers and consumers alike in the form of greater yield, lower costs, and higher-quality products, criticism has been widespread, emanating from environmental activists decrying the polluting effects of soil and water; health monitors concerned about the safety to humans of genetically modified food consumption; and consumer advocates and small farmers worried about the potential monopoly power wielded by large agribusiness concerns working with biotechnology firms.

Environmentalists and industry analysts further warn that the continued use of such powerful pest-control mechanisms will effectively result in the breeding of more powerful, and more resistant, "super pests." These fears were acknowledged by the technology's leading industry proponents, who insisted that, for that reason, the technology must be more rapidly developed and implemented in order to stay a few steps ahead of the pest evolution.

Small farmers were most particularly concerned with the rising use of technology designed to manufacture seeds that are sterile. Farmers have always saved seeds at the end of the year's crop harvest for use in the following year's planting. By introducing destructive toxins that render the seeds sterile, companies' genetically modified seeds are often engineered to be usable only once, thus forcing farmers to repurchase seeds from the manufacturers every year. In addition to the potential health hazards posed by these toxins, the degree of control this practice could afford seed suppliers has many farmers concerned. Moreover, biotechnology firms increasingly insist on legal agreements with farmers that those seeds that are fertile be used only once, a move that has hardly been popular among farmers.

Concerns about genetically modified food were for many years far more widespread in Europe and Japan than in the United States. By the end of the 1990s, that was still true, but the margin was diminishing rapidly. Many large U.S. firms have noticed this trend and fear the potential economic damage they could sustain by overinvesting in a product line that consumers come to avoid. As a result, some farmers have announced that they were placing restrictions on the genetic modification of crops while they wait to see how negative public opinions eat into the market for such foods.

By 1999 farmers were beginning to take advantage of electronic commerce on the World Wide Web to market their products. Web sites acting as bulletin boards, as well as online auction sites, took off in the late 1990s, affording farmers a relatively cost-effective way to take their products to market and purchase necessities such as agricultural chemicals. By the end of 1999, however, Internet access was mainly concentrated among the largest farm operations; only 29 percent of all U.S. farms were online, but more than half of that figure was derived from farms with annual sales of more than $250,000. At any rate, the Internet was viewed by analysts as an indispensable aspect of farming's future, likely to spur an increased trend toward specialty niche crops with significant value-added properties.

At $94.1 billion, cash receipts for U.S. farm crop production in 2000 were up slightly from 1999 ($92.6 billion), but down overall from $111.1 billion and $101.7 billion in 1997 and 1998, respectively. Over a three-year period, food grain cash receipts fell 37 percent; feed crops fell 27 percent; cotton fell 35 percent; and oil crops fell 16 percent. Vegetables, fruits and nuts, and other crops showed marked improvements in cash receipts, with an overall increase of more than 15 percent between 1997 and 2000.

According to The Voice of Agriculture, modern farming methods in 2005 have meant that a single acre of land is capable of supporting and producing "42,000 lbs. of strawberries, 11,000 heads of lettuce, 25,400 lbs. of potatoes, 8,900 lbs. of sweet corn, or 640 lbs. of cotton lint." While genetically modified crops were not new in the mid-2000s, the growing acceptance of them was. Researchers were testing the environmental and health effects of bio-engineered crops. In some cases, it was found that the crops were surprisingly beneficial to the land and the environment because they required less insecticide application. To counteract the possible overapplication of insecticides and herbicides, some studies were focusing on the effects of different application cycles and methods.

The total agricultural industry employs one-fifth of the total U.S. workforce. By the mid-2000s, the total number of farms was continuing to shrink, largely due to consolidation, but the total average acreage size of farms was increasing. Despite this fact, the biggest concern of young farmers in 2005, according to the American Farm Bureau Federation, was that of continued land availability. Farmers were continuing to explore conservation techniques, such as reduced tilling, recycling, and contour farming.

The combined crop revenue for all farms was $106.2 billion in 2003 and $113.2 billion in 2004. An estimated 17 percent of crops were grown specifically for export, and the agriculture industry remained the top U.S. exporter.

In 2007 the USDA introduced a series of farm bill proposals the department called "market-oriented" that, according to the USDA, supported the George W. Bush administration's "commitment to increase conservation programs that protect our natural resources and focus support on renewable energy." Among other goals, the proposals advocated converting the current price-based countercyclical program to a revenue-based program that is responsive to actual conditions, and they favored modernizing the marketing-assistance loan program for corn, wheat, cotton, rice, soybeans, and other major crops. The latter change, according to the USDA, would encourage "farmers to plant crops based on market prices instead of the level of subsidy payment."

Current Conditions

Farmers generated a record net cash income of more than $100 billion in 2008, a direct result of higher corn, soybean, and wheat prices. However, the American Farm Bureau Federation warned the farming industry they would experience lower profits in 2009 and to closely monitor their fertilizer and pesticide costs slated to increase. Industry analysts also warned of possible lower corn prices falling to below $4 per bushel

By 2030, farms will have to feed twice as many compared to current demand and by 2050, farms will have to produce more on less land to feed a worldwide population of 9 billion while still protecting the environment. Globally, one acre fed one person in 1960 and in 2005 that same acre fed 1.8 people; however, by 2050 that same acre will have to feed between 2.4 and 2.6 people. Through innovation the farming industry will be required to meet the challenges of weather related stresses on their crops, such as drought while conserving water. "We've broken about all the land we can--which means we'll have to do better with what we have, using technology and science to produce more on available land," Russ Green told The Delta Farm Press in May 2010

In order for corn to reach the 300 bushel-per-acre by 2030, advanced "drought-tolerant hybrids" will become available to farmers as early as 2012. These hybrids promise to consistently withstand drought conditions as well as dry farming areas in the U.S. Not to foreshadow the intended outcome of a much higher yield, farmers will undoubtedly increase their profits as well. Additionally, Dow AgroSciences announced its "Enlist-program corn hybrids," which have proven resistant to both "2, 4-D" and "glyphosate" herbicides known to harm crops will be coming on the market in 2013 with soybeans hybrids and cotton hybrids available as well in 2014.

A significant issue surrounding the farming industry was the 2008 farm bill set to expire in 2012 and the growing budget deficit. According to the Congressional Budget Office, compared to a deficit of $161 billion in 2008, the deficit will rise to nearly $1.5 trillion by 2012. In order for farms to produce 70 percent more food by 2050, the outcome of the farm bill will be of particular interest to farmers especially since some of the funding programs were already reduced in 2010.

Industry Leaders

According to Ward's Business Directory of U.S. Private and Public Companies, the industry leader in the early 2000s was Agrinorthwest of Pasco, Washington, with $134 million in revenue and 500 employees. Wolfsen Inc. of Los Banos, California, was second, with $47 million in revenue and 300 employees. Parma, Idaho-based J.C. Watson Company and Morrison Ventures of Salina, Kansas, were third and fourth, respectively.


Employment in the U.S. farming industry has been declining rapidly for many years. About 2.2 million people worked in farming in the 2000s, down from 2.8 million in 1994. Over the longer term, the drop is even more dramatic; in 1950 the farming industry employed 9.9 million. Moreover, increasing numbers of farm operators supplement their income with other employment. In 1997 only 50.3 percent of all farmers claimed farming as their principal occupation; more than 60 percent of farm operators supplemented their income with other employment.

Career opportunities included jobs in production, processing, and marketing. Wages varied widely according to the size and structure of the farm, the nature of the job held, and the education level of the employee. In 2003 there were an estimated 277,000 workers employed in crop production support, with an average annual salary of $19,150.

The most common job in the farming industry was hired farm laborer, the majority of whom were field laborers. There were 884,000 hired workers on U.S. farms in January 2003, down 1 percent from the previous year. In January 2003 hired workers were paid, on average, $9.32 per hour, up 35 cents from the same period of the previous year. Field workers earned an average of $8.29 an hour, and livestock workers earned an average of $8.91 an hour. The majority of hired workers are employed by large farming operations that take in revenues greater than $250,000 a year.

America and the World

Although the United States contains less than 7 percent of the land in the world, the country produces 13 percent of the world's farm commodities. The U.S. Department of Agriculture estimated that the United States controls 47 percent of the world market for soybeans, 19 percent of the world's cotton, 12 percent of all wheat, and 36 percent of the world's corn.

In addition to regular sales of agricultural production, the U.S. government funded exports of food under its Food for Peace program. The Food for Peace program began in 1959 and provided food items from U.S. surplus production to developing nations.

According to some industry forecasters, the demand for U.S. products on the global market would decline in the future as other nations developed their own farming industries. Low labor costs in some countries were expected to enable them to produce crops more cheaply than could be accomplished in the United States. In addition, improved technology, such as the availability of advanced irrigation systems, was improving the ability of some countries to grow crops. For example, Saudi Arabia achieved self-sufficiency in wheat production using a center-pivot irrigation system. U.S. producers therefore expected to face increased competition as more countries entered the trade market and improved their agricultural conditions at home. However, as the consolidation of farming grows, highly leveraged agribusiness firms are likely to wield greater influence on the world market. Moreover, as land availability diminishes and genetically modified crops take on heightened priority, the globalization of farming will likely help major U.S. players. One of the central tasks of U.S. officials is to strengthen accords relating to intellectual property rights, enforced by the World Trade Organization. Such provisions would grant patent control to developers and owners of genetically modified technology, thereby allowing them to charge other businesses for the use of such technology.

Research and Technology

Historically, technological advances in the agricultural industry focused on increasing land productivity and reducing labor costs. The mechanical revolution in farming, which began during the nineteenth century, accelerated through the middle of the twentieth century. For example, to produce one acre of corn in 1850, it took approximately thirty to thirty-five hours using draft animals, a walking plow, and hand planting procedures. In 1930 it took approximately six to eight hours using horses and early tractors. In 1995 the same task took two and a half hours using a tractor, a five-bottom plow, a 25-foot tandem disk, a planter, an herbicide applicator, and a combine. Increasing crop yields also reduced the amount of land necessary to meet the nation's per-capita food and fiber needs from about four acres in 1900 to less than two acres by 1995.

During the latter part of the twentieth century, however, the focus of agricultural research shifted to environmental issues. Pesticides (such as DDT) and herbicides (such as 2,4,5-T) were criticized for their potential negative human health consequences. Researchers intensified their efforts to produce less toxic alternatives.

Computer technology also was being used to bring about agricultural advancements. Geographic information systems (GIS), computer modeling and simulation, and fertilizer- and irrigation-monitoring systems were among the many computer-based systems that were popular with farmers at the turn of the twenty-first century. One of the primary functions of such technology was to help increase farm profitability through the reduction of resource use. GIS, which combines farm-positioning sensors, aerial photography, and farm-equipment sensors, was particularly promising as a tool to help farmers analyze the myriad factors and data necessary to most efficiently utilize their land, boost yields, and reduce resource consumption. The accumulated information helps farmers analyze specific factors, such as soil nutrients, in particular plots of land on their farms, so they can make effective decisions about water allocation, fertilizer application, crop selection, pest control, and so on. Moreover, computer-based precision irrigation systems monitor crops to make sure they receive the appropriate amount of water, which can be applied automatically when the system deems it necessary.

The 1996 Freedom to Farm Act put an end to the long-standing farm subsidy through which the farming industry benefited from the government-developed satellite mapping systems. Farmers used these systems to aid in the selection of farmland for qualities such as richness of soil and the availability of resources such as water. Because farmers, under Freedom to Farm, are no longer required to report acreage and planting patterns to the Department of Agriculture, the government's aerial photo-mapping system was rendered obsolete. The larger agribusiness farms were expected to take over this role, providing this much-needed service to the farming industry for a fee.

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