Thursday, June 12, 2014

I AM a Corporate Farm!

For years now I've been using this family pic during my farming presentations saying "We are a corporate farm and here's our Board of Directors." I was actually being facetious because our farm is a family farm, large yes, but still, what you see below is pretty much what you get (plus a few years). Little did I know that today, I'd discover it wasn't tongue in cheek, it was actually true! We are a "corporate" farm!


This pic was taken in the fall of 2007, as one of the Maryland farm families who were inducted into Maryland's Agriculture Hall of Fame.  So the kids now are all either in high school or have graduated. But this is it, the family who operates the family farm... and it happens to be a corporate farm.

I was researching USDA 2012 Ag Census data for an upcoming webinar I am speaking at on U.S. Agriculture 101. One of the questions I was asked to define was the difference between family farms and corporate farms. As I started looking at the statistics and asking questions of the folks at National Ag Statistics Survey (great guys, very helpful BTW), I was amazed at what I found out!

The 2012 U.S. Agriculture Census data shows: 
Source: U.S. Ag Census Atlas Maps
Nearly 87% of farms in the U.S. are family owned, usually a sole proprietor, or husband and wife but
with no tax or liability structure for protection
(that's scary in this day of age)


Source: U.S. 2012 Ag Census Atlas Map
Another 7% are owned in family partnerships, but does not include family farms operated by
a husband and wife. 

That's a total of 95% of U.S farming operations, owned and operated by families.... 

And here's the doozy.....!!
The remaining 5% are those horrible "corporate" farms the media is always slamming.... right?
THOSE are the ones we want to do away with right?

But wait, there's still more.....
I'm one of "THOSE"

In case that chart is too small, here is the link to the 2012 Ag Census, check it out on Table 67. 
Of the 5% that are defined as "corporate",
(you know, those "Farmed and Dangerous" farms that Chipotle slams or those big "industrial" farms run by robots and cartoon scarecrows devoid of all ethical behavior, yeah those)
Corporate farms are defined by USDA as those that are "incorporated under state law". 
So this would be an LLC, an S-Corp, or a C-Corp. 
So Schmidt Farms Inc meets USDA's definition of a corporate farm when all along we thought we were a just a good old, family farm.

Or maybe there are more of us "good old family farms" than you're being led to believe.

What the census data tells us is:

Total U.S Farms: 2,109,303
Family Held Corporations: 95,142
Other than Family Held Corporations: 11,574
Percentage of US Farms that are Other than Family Held Corporations:  0.5%   (11,574/2,109,303)
Percentage of US Farms that are incorporated:  5.1%   (95,142+11,574)/2,109,303

Less than 1/2 of 1 % are non-family held "corporate" farms. 

But the small farmer is being squeezed out by "Big Ag" right?

Hmmmm, let's look....

The average U.S. farm is 434 acres, that the median between us big guys and the small guys. Except that USDA defines farms based on gross sales, not by size or numbers of acres. Suburbia and urbanization have resulted in pretty obvious loss of farmland when you look at this map. It looks like the small guy is getting the squeeze doesn't it?

Let's take a closer look:


The majority of the acres are held by small farms, the largest segment being farms under 49 acres total.
Family farms like mine that are over 2000 acres represent only 1.4% of U.S. agriculture. 


More than half of all U.S. Farmers 52.2% reported agriculture was NOT their primary income source:
That's a lot of part time farmers. 

But historically, small farms are difficult to cash flow. 
Nearly 57% of all farms have gross sales of less than $10,000. 
That's well below the poverty line so off farm income really isn't option to make ends meet.


So in summary:
1. The majority of ALL farms incorporated and unincorporated in the U.S. are family owned & operated. Non family, "Corporate" agriculture makes up less than 1/2 of 1%. Tax and liability structure tells you nothing about the values of that business and how it operates. Let's lose the word "corporate" as a label for the way we look at farms and how they operate. 

2. The majority of U.S. farms are "small" and those farmers rely on other off farm income to earn a living. (I had a friend say they work to support their farming habit). Support your local farmers who do direct sales to consumers and farms like mine who sell wholesale to distributors which you buy at the grocery store.

Next time you hear in the media that "big ag" is putting small farms out of business, think again.

Next time you hear the media say that "corporate" farms are taking over family farms, think again.

In fact, I'm beginning to wonder why we don't think more for ourselves and pay way less attention to media and its false marketing messages.... we might learn something if we #FactCheck what we hear.

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3 comments:

  1. Great post!
    For years, I've thought it was funny/ironic that we fall into the "corporate farm" category. We are one of the tiniest farms ever.
    Actually, that is part of what prompted my attempts to further educate myself in regards to modern ag practices. And, boy...was I surprised! The craziness that is repeated ad nauseum in both alternative ag world and internetland is just that...craziness.
    You're SO right...we DO need to "think more for ourselves and pay way less attention to media and its false marketing messages.... we might learn something if we #FactCheck what we hear." I tell my customers that all the time.

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    1. Thanks Barbara, I always thought family farms were simply defined by ownership not by tax structure. So I assumed my farm was included in the 87% family farms and the 5% corporate was owned by agribusiness. By census data, 99.5% of all farms in the US are family owned!

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  2. Thanks for the excellent information posted here! Please keep sharing the information like this.

    Agriculture and Farming discussion forum

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