U.S. food production is controlled by the giant corporations, right?

Wrong – 98% are family farms – most are small, a few are big. The big farms are on average the most efficient, so 12% of farms produce 84% of the value. 

The data are freely available for those who wish to know the facts rather than the propaganda from anti-corporate activists like FOE, Greenpeace or the flavors of the Occupy movement. E.g., see the U.S. Dept. of Agriculture report “Structure and Finances of U.S. Farms: Family Farm Report, 2010 Edition“, or the related report “America’s Diverse Family Farms, 2010 Edition“. The summary of both reports is similar:

Most U.S. farms—98 percent in 2007—are family operations, and even the largest farms are predominantly family run. Large-scale family farms and nonfamily farms account for 12 percent of U.S farms but 84 percent of the value of production. In contrast, small family farms make up most of the U.S. farm count but produce a modest share of farm output. Small farms are less profitable than large-scale farms, on average, and their operator households tend to rely on off-farm income for their livelihood. Generally speaking, farm operator households cannot be characterized as low-income when both farm and off-farm income are considered. Nevertheless, limited-resource farms still exist and account for 3 to 12 percent of family farms, depending on how “limited-resource” is defined.

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An excellent principle to keep in mind when exposed to push-media like TV is “Who profits from this story?” In the case of agriculture – such anti-GMO activists, “who profits” includes the organic food industry.

4 thoughts on “U.S. food production is controlled by the giant corporations, right?

  1. eileenworkman

    What is the point of this article? As a small farm family whose crop does not compensate us for the costs of production, we harvest for the love of it. We bought a property that had producing trees on it and were faced with a choice- let the fruit rot, or pay to bring it to market. We chose B, and we’ve expanded our orchard over time. Not once, in 15 years, have we earned more than it costs us to produce and sell food to the public…but we don’t care. We’re not in farming for the money. We do it because somebody has to feed the world, one bite at a time. Remember that when you buy your food…please.

    Reply
    1. Steve Darden Post author

      Well, the point was simply to draw attention to the facts of US farming. I thought the referenced USDA reports document a quite different profile of US farmers – different than painted by the common stories of “multinational corporations control the food supply”. In particular, the GMO innovators such as Monsanto.
      The profile of your farm seems like a great example of the diversity, and of how challenging it is to survive as a farmer. Page 4 of the USDA report describes farms that may remind you of your own experience:

      Small farms are more likely to have a negative profit margin, but some are profitable.

      Forty-five to 75 percent of the farms in each small farm type had a negative operating profit margin in 2007.

      Other small farms were more profitable: between 17 and 32 percent of each small farm group had an operating profit margin of at least 20 percent.

      Nevertheless, an even greater share of large-scale farms had operating profit margins that high, and most large-scale farms had positive margins.

      Only 3 percent of U.S. farms are classified as vulnerable (negative net farm income and debt/asset ratio greater than 40 percent), and the majority (71 percent) of these farms are residential/lifestyle farms. 

      Indiana farmer Brian Scott writes the blog “The Farmer’s Life“. Check it out – Brian shares what real-world farming is about – how complex are the decisions, how big are the risks that farmers take every year.

      Reply
  2. Luke_UK

    What does ‘family run’ have to do with anything? It’s like ‘Natural’ on product labels, good for marketing but in practice meaningless. If 84% of the food is from 12% of the farms, a 1-point (and therefore almost certainly underestimated) Gini coefficient for the distribution is 0.72. Effectively, most of the farmers are irrelevant to the market, production is concentrated in a few hands. It is entirely unsurprising that economies of scale exist in farming and allow the largest farms to be the most efficient.

    The charge of corporate control is not usually leveled at the farming end of the process, anyway. It is the distribution and marketing companies that have large enough market shares that local monopolies, at least, become likely, and which have the lobbying resources to bend regulations to their own, rather than the public interest.

    Reply
    1. Steve Darden Post author

      Altogether I support your points.

      What does ‘family run’ have to do with anything?

      It’s just a surprising aspect of the industry (to me). The scale of the family presence is larger than I thought. I inferred from the concentration that family operated farms were not a big factor in total production. In fact corporate interests produce a relatively small part of total production.

      Most important, I was happy to find hard facts that are accessible to the general public. These USDA reports are easy to digest – you don’t have to be an ‘ag’ specialist to appreciate the shape of the business.

      Reply

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