Measuring the American farm size distribution

Abstract

This paper develops a measure of farm size as a share‐weighted sum of farm sizes, called the Share Weighted Size Index (SWSI), which introduces new evidence of farm consolidation from 1959 to 2017. Our Share Weighted Size Index provides more reasonable estimates of the entire farm size distribution than simple averages and is useful for comparing farm size across crops at one point in time or for comparing farm sizes for a given crop over time. Although previous measures have relied on confidential or hard‐to‐access farm‐level records, the Share Weighted Size Index is derived exclusively from publicly available Census of Agriculture data. Unlike average farm size, the Share Weighted Size Index reveals consistent evidence of rising farm size, the importance of returns to scale for most commodities, and the rising importance of specialization on a small number of crops within farms. Contrary to past studies that argued rising off‐farm wages increase farm size, we find evidence that proximity to off‐farm opportunities results in smaller farms.

How economic conditions changed the number of U.S. Farms, 1960–1988: A replication and extension of Gale (1990) to midsize farms in the United States and abroad

“…The inclusion of other economic factors shifted the factors that impact the annual change in farm numbers from the ratio of prices received to prices paid to measures of urbanization pressure represented by population and financial stress represented by the debt‐to‐asset ratio (Table 4 column (5) versus Table 6 column (1)). Lacy et al (2022) also find a negative impact from population density on the average farm size. The long‐term trend in the change in farm numbers changed from −11% to −15%.…”

“…Moreover, the consolidation of farms, in addition to changes in farm size, include changes in commodity specialization, location, farm organization, and vertical linkages in the United States (MacDonald, 2020). Lacy et al (2022) find evidence of increasing US farm size due to specialization and returns to scale and, increases in small farms due to increases in off‐farm wage opportunities.…”