• The Financial District


A study conducted by the University of Maryland has concluded that larger farming operations are taking over the crops, dairy and livestock sectors based on 35 years of data collected by a researcher who had worked with the US Department of Agriculture (USDA) for nearly four decades.

In a report carried by Science Daily on July 23, 2020, James MacDonald, a new research professor in Agricultural & Resource Economics at the University of Maryland, said production has significantly shifted to larger farms in 60 of the 62 crop and livestock commodities analyzed over the 35-year period, meaning smaller farms are going out of business and ultimately becoming unsustainable. With larger operations comes more acreage as well. Farms with at least 2,000 acres of cropland only operated 15% of all cropland in 1987, but now these larger farms operate 37% of all cropland.

In 1987, half of all dairy cows in the U.S. were in herds of 80 or fewer cows. But by 2017, that midpoint herd size shifted to 1,300 cows. "Consolidation in dairy is just dramatic," says MacDonald, "with shifts to much bigger farms and smaller farms going out of business. The last two years, 15% of the dairy farms in the country went out of business. The very large farms have lower costs than midsize and smaller ones, and while those lower costs reflect productivity growth and result in lower prices for the consumer, it is also pretty heartbreaking for people who have been small or midsize dairy farmers who are going out of business. In 1980 when I started this work, there were probably about 250,000 dairy farms in the country. Today, we have 30,000, and it's going to keep shrinking."

According to MacDonald, the widespread and persistent pace of this shift in the data suggests that technology plays an important role in the consolidation process. For instance, new labor-saving equipment, materials, and organizational changes now allow a single farmer or farm family to manage more acres or more livestock. Advances in technology are often expensive to implement, but cheaper in the long run, so larger operations are at an advantage and have lower overall operating costs. MacDonald thinks that we may be on the cusp of continuing technological changes, particularly in crop agriculture, through the application of precision agriculture technologies in farming. Precision agriculture technologies allow farmers to collect, analyze and apply finely detailed information from field and herd operations. Some precision agriculture applications may favor smaller operations, but others could provide advantages to very large farming organizations.

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