U.S. Agriculture

The U.S. Department of Agriculture indicates that agricultural production occurs in each of the 50 States. The value added to the U.S. economy by the agricultural sector for the past 5 years:

Value of Crop Production
2010 / $170.9 billion
2011 / $203.9 billion
2012 / $218.7 billion
2013 / $233.6 billion
2014 / $204.7 billion

Value of Livestock Production (meat and dairy)
2010 / $139.9 billion
2011 / $163.4 billion
2012 / $167.4 billion
2013 / $182.1 billion
2014 / $209. 9 billion

Overall, agriculture and agriculture-related industries contributed $775.8 billion to the U.S. gross domestic product (GDP) in 2012, a 4.8-percent share. The output of America’s farms contributed $166.9 billion of this sum—about 1 percent of GDP. The overall contribution of the agriculture sector to GDP is larger than this because sectors related to agriculture—forestry, fishing, and related activities; food, beverages, and tobacco products; textiles, apparel, and leather products; food services and drinking places—rely on agricultural inputs in order to contribute additional value to the economy.

In 2013, 16.9 million full- and part-time jobs were related to agriculture—about 9.2 percent of total U.S. employment. Direct on-farm employment provided over 2.6 million of these jobs. Employment in the related industries supported another 14.2 million jobs. Of this number, food services and drinking places accounted for the largest share—11.1 million jobs—and food.beverage manufacturing supported 1.8 million jobs. The remaining agriculture-related industries together supported another 1.4 million jobs.

Within the crop production sector, feed crops had the highest cash receipts on an annual basis compared to other crops.

Within the livestock sector, meat animals had the highest cash receipts on an annual basis compared to other livestock, and dairy and poultry and eggs alternate on an annual basis for the position of the second highest cash receipts per annum.

California, Iowa, Illinois, Minnesota, and Nebraska are the five leading States in terms of value of crop sales. In contrast to California, crop value in the next four leading States is based on grains and oilseeds, particularly corn and soybeans.

The five leading States for the sales value of livestock and their products are Texas, Iowa, California, Nebraska, and Kansas. The cattle sector is the dominant source of value in Texas, Kansas, and Nebraska. Milk from cows accounts for about 57 percent of livestock-sale value in California. Both the hog and cattle sectors are large sources of sale value in Iowa. North Carolina is the leading producing State of poultry and eggs, followed by Georgia.

With only a few exceptions, production of broilers (the most efficient converter of feed to meat) has outpaced growth in beef and pork production since 1990, and poultry meat has been the major meat produced and consumed in the United States since the mid-1990s.

The value of agricultural production in the United States has risen over the past decade due to increases in production as well as higher prices. Yield gains for crops have been particularly important, although acreage has also risen recently in response to elevated prices since 2008. Falling prices led to a slight decline in value of crop production in 2013. While livestock production increased over the decade, prices were up more than 60 percent between 2003 and 2013, contributing to the rising value of livestock production.

Horticultural production has increased steadily over the past two decades. Grapes, apples, oranges, and strawberries top the list of fruits, while tomatoes and potatoes are the leading vegetables. Imports have increasingly supplemented production of domestic horticultural products to provide U.S. consumers with a wider and year-round variety than is provided from domestic sources.

The number of milk cows in the United States has generally fallen over the past 30 years, but milk output has risen more than 50 percent since 1980 and now exceeds 200 billion pounds per year. Genetic developments and technological improvements underlie a pronounced upward trend in milk output per cow. Consolidation in the dairy sector also has facilitated efficiency gains in milk production.

Although there is frequent year-to-year variation, prices for agricultural commodities have generally moved higher in the past 10 years. In these aggregate measures, nominal prices for crops are close to double their 2003 level, while livestock prices are up more than 60 percent.

Since 2000, inflation-adjusted meat prices have reflected slower production growth as meat output responded to lower producer profits due in part to higher feed costs. Cattle production costs, production, and prices also have been affected by poor forage conditions due to lingering droughts over much of the past decade, particularly in the Southern Plains.

United States Department of Agriculture, Economic Research Service   http://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials.aspx

In April 2015, the United States Department of Agriculture, Economic Research Service indicated that Net farm income is forecast to be $73.6 billion in 2015, down nearly 32 percent from 2014’s forecast of $108 billion. The 2015 forecast would be the lowest since 2009 and a drop of nearly 43 percent from the record high of $129 billion in 2013. Lower crop and livestock receipts are the main drivers of the change in 2015 net farm income from 2014 as production expenses are projected up less than 1 percent. Net cash income is forecast at $89.4 billion, down about 22 percent from the 2014 forecast. Net cash income is projected to decline less than net farm income primarily because it reflects the sale of carryover stocks from 2014.

Crop receipts are expected to decrease by $15.6 billion (7.9 percent) in 2015, led by a projected $6.7-billion decline in corn receipts and a $3.4-billion decline in fruit/nut receipts. Livestock receipts are forecast to decrease by $10.1 billion (4.9 percent) in 2015 largely due to lower milk prices. The implementation of new programs under the Agricultural Act of 2014 results in a projected 15-percent increase ($1.6 billion) in government payments. Total production expenses are forecast to increase by $2.5 billion (about 1 percent) in 2015, extending the upward movement in expenses for a sixth straight year.

Median income of farm households is forecast to increase slightly in 2015, to $72,298, up from $70,718 projected for 2014. Given the broad USDA definition of a farm, many farms are not profitable even in the best farm income years. The projected median farm income of -$1,558 is essentially unchanged from the 2014 forecast of -$1,570. Most farm households earn all of their income from off-farm sources—median off-farm income is projected to increase 4 percent in 2015 to $66,361. (Note: Because they are based on unique distributions, median total income will generally not equal the sum of median off-farm and median farm income.)

United States Department of Agriculture, Economic Research Service   http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/highlights-from-the-2015-farm-income-forecast.aspx

Farmland values

Available, arable farmland in the United States has been decreasing due to urbanization, poor soil management, access to water supply.

In the United States, the average age of farmers is increasing into the late fifties. Some farmer so not have successors in place due to smaller family size than in the past, children do not want to farm and already moved away, or young farmers cannot afford to purchase family-owned properties.

Institutional investors and hedge funds have been buying farmland in the United States as a form of asset appreciation investment, or lease it out to farmers. The investment in farmland is subject to many variables: weather, commodity prices, soil health, water access, dietary trends, and federal agricultural programs. However, investment in arable or marginal farmland has been a good investment over the past 20 years.