A Guide to Diverse American Farms

August 16, 2022

Agriculture impacts almost every aspect of our daily lives. Farms feed our families, provide fiber and fuel, and support millions of jobs across the nation. In the U.S. alone, there are over 2 million farms, ranging from small family operations to large commercial businesses that span hundreds of acres.

No matter the size of the farm, successful farming requires an incredible amount of skill as well as good business sense. There are numerous inherent risks that come with farming, such as weather or pests, and crop prices can be difficult to predict. To top it off, farming practices that work in one region of the United States may not work in another.

In short: farming is a complex business.

This article provides a high level overview of America’s diverse farming regions and most prevalent commodities as well as the science and business of farming. Use the contents menu below to jump to a specific topic.

Contents

What is Farming?

Main Types of Crops in the United States

Main Types of Animal Products in the United States

United States Agricultural Regions

The Science of Farming

The Business of Farming

What is Farming?

Farming encompasses any agricultural activity that involves growing plants or raising livestock for food, fiber, and other raw materials. Growing seasons and practices vary depending on where you live in the world, but this article will focus on U.S. commercial agriculture.

Main Types of Crops in the United States

Corn, soybeans, and wheat are the three of the largest crops grown in the United States.

In total, the USDA lists eight main categories of crops:

  • Corn and Other Feed Grains
  • Cotton & Wool
  • Fruit & Tree Nuts
  • Rice
  • Soybeans & Oil Crops
  • Sugar & Sweeteners
  • Vegetables & Pulses
  • Wheat

The USDA also considers fruits and tree nuts, vegetables, culinary herbs and spices, medicinal plants, and ornamental plants to be specialty crops.

Main Types of Animal Products in the United States

Over half of the U.S. agricultural cash receipts come from livestock, dairy, and poultry. From a global perspective, the U.S. is the largest beef and poultry producer in the world.

The major types of animal products produced in the U.S. include:

  • Cattle & Beef
  • Dairy
  • Hogs & Pork
  • Poultry & Eggs
  • Sheep, Lamb, & Mutton

United States Agricultural Regions

us agricultural regions represented by crop seeds

Region names like the Corn Belt or Midwest probably come to mind when you think of agricultural regions, but the USDA’s Economic Research Service divides the U.S. agricultural regions based on geographic specialization in production. These regions include:

  • Basin and Range: Cattle, wheat, and sorghum.
  • Eastern Uplands: Part-time cattle, tobacco, and poultry farms.
  • Fruitful Rim: Fruit, vegetable, nursery, and cotton farms.
  • Heartland: Cash grain and cattle farms.
  • Mississippi Portal: Cotton, rice, poultry, and hog farms.
  • Northern Crescent: Dairy, general crop, and cash grain farms.
  • Northern Great Plains: Wheat, cattle, and sheep farms.
  • Prairie Gateway: Cattle, wheat, sorghum, cotton, and rice farms.
  • Southern Seaboard: Part-time cattle, general field crop, and poultry farms.

The Science of Farming

center pivot irrigation

Soil Types & Management

Quality soil is critical to the success of a farm, whether planting crops or raising livestock. Factors like nutrients, how well soil drains, related irrigation needs, and tillability impact the suitability of soil types for different crops.

There are six main soil types based on composition, including:

  • Chalk
  • Clay
  • Loam
  • Peat
  • Sand
  • Silt

Typically, soils are mixtures of the above. For example, a farmer might have silty loam or sandy clay on their property. Understanding what types of plants thrive in a specific soil helps a farmer plan successful crops.

Good soil management practices help farmers prevent erosion, maintain nutrients, and support important microorganisms. Cover crops, composting, soil analysis, and green manures are several examples of soil management practices.

Frequency of soil tillage and crop rotation are of particular importance when considering soil health. Intensive tillage can have negative impacts, like soil erosion and nutrient runoff, while no-till may support nutrient management and reduce weed growth. Crop rotation also helps with nutrient management and breaks crop pest cycles.

Water

Water is, of course, a critical factor for the productivity and profitability of a farm. While rain is often the main source of water in certain regions, rain alone may not be sufficient for large commercial crops.

Many farms use irrigation techniques to support operations during dry parts of the year or in arid regions of the United States. According to the 2017 Census of Agriculture, 42% of the nation’s freshwater withdrawals came from irrigation in 2015.

There are many methods of irrigation, but in general, irrigation is the artificial distribution of water to a field through pumps, pipes, and sprays. Common types of irrigation include:

  • Center Pivot Irrigation: Uses sprinklers on wheeled towers that move in a circular pattern.
  • Drip Irrigation: Delivers drops of water close to the roots and minimizes runoff and evaporation.
  • Lateral Move Irrigation: Distributes water through wheeled pipes with a set of sprinklers attached. Similar to the center pivot method.
  • Localized Irrigation: Applies water to each plant through a low pressure pipe network.
  • Sprinkler Irrigation: Applies water via a high-pressure, overhead sprinkler system that is either placed in a central location or on moving platforms.
  • Sub-Irrigation: Distributes water by raising the water table through pumping stations, canals, gates, or ditches.
  • Surface Irrigation: Relies on gravity to distribute water. This is the most common form of irrigation and includes more specific methods, like flurrow, basin, and spate irrigation.

Nutrient Management

In order to produce enough food, commercial farming operations use various types of fertilizers. Most commercial fertilizers contain nitrogen, phosphorus, and potassium, also known as NPK.

Fertilizer packaging represents the concentration of NPK with three numbers. For example, 20-20-20 or 5-10-10. These numbers correspond to the percentage of each nutrient within the entire container. The remainder is usually filler or minor nutrients.

While the right mixture of fertilizer depends on a myriad of factors (like soil quality and plant type), all plants rely on NPK to grow and stay healthy. Here’s the function of each nutrient in a nutshell:

  • Nitrogen: Promotes the development of healthy leaves.
  • Phosphorus: Supports root, flower, and fruit development as well as seed formation.
  • Potassium: Contributes to the overall health of a plant, from disease resistance to the movement of water and nutrients.

Pest Management

Farmers not only contend with the elements but also diseases, insects, and fungi. Farmers scout their fields to identify if, where, and when pesticides are needed. There are three main types of pesticides:

  • Fungicides: Used to control viruses, bacteria, and fungi.
  • Herbicides: Eliminates weeds or prevents new weeds from growing.
  • Insecticides: Treats soil or plant foliage for insect infestations.

Many U.S. farmers cultivate crops that have been genetically modified to have pest management traits. For example, many crops are engineered to resist herbicides so that a farmer can target weeds without harming their crops.

Organic pest control can also be used to prevent pathogenic organisms, insect infestations, and weed growth without the use of synthetic chemicals. These methods range from cultivating habitats for beneficial insects, such as ladybugs, to the use of barriers and screens. Chemicals are usually a last resort on organic farms, which focus more on prevention and environmentally conscious pest management.

The Business of Farming

farmers shaking hands in a field

How Farms are Structured

The Economic Research Service (ERS) categorizes farms based on annual gross cash farm income (GCFI), the primary occupation of the operator, and ownership of the farm. The resulting ERS Farm Typology provides a big picture overview of how farms are structured in the United States.

  • Small Family Farms (GCFI less than $350,000): Broken into three smaller categories based on the primary occupation of the operator.
  • Midsize Family Farms (GCFI $350,000 to $349,999)
  • Large-Scale Family Farms (GCFI of $1,000,000): Broken into Large (GCFI up to $4,999,999) or Very Large Farms (GCFI $5,000,000).
  • Nonfamily Farms: The majority of the business is not owned by the operator or their family.

98% of U.S. farms are considered family farms under the ERS typology. The remaining 2% make up the Nonfamily Farms and produce 13% of the value of agricultural output.

How Farms Make Money

Farms generally make money by selling agricultural commodities and through direct government farm program payouts, such as a grant. Many farmland owners also generate income by leasing their land to a farmer or farm company for a monthly rent payment or a share of the profit.

The Costs of Running a Farm

Of course, just like any business, a farm is not without expenses.

The USDA’s Farm Production Expenditures 2020 Summary estimated that the total cost of farm expenditures in the United States was $366.2 billion in 2020. The largest costs were feed, farm services, livestock-related expenses, labor, and fuel.

Crop farms alone were estimated to spend $195.5 billion, with the largest costs being labor, farm services, and rent. Crop inputs, like pesticides and fertilizers, totalled $56.4 billion, which was 28.9% of the total expenses. Equipment is another significant farm expense, albeit an irregular one.

Per farm, the average expenditure in the United States was estimated at $182,130 in 2020. However, crop farms spend comparatively more with an average expenditure of $208,571, while livestock farms spend an average of $160,203.

Contracting

To guarantee an outlet for production, a farmer may choose to make a legal agreement with another person or firm. These contracts assure the type, quantity, and quality of a specific commodity that a farmer will produce for a contractor. There are two types of contracts:

  • Marketing Contract: The farmer owns the commodity during production, and the contractor’s involvement in production is minimal.
  • Production Contract: In this type of contract, the contractor usually owns the commodity during production and has more say about inputs and practices.

Farm Business Risks

Farming comes with inherent risks, ranging from government policies to weather. Even personal crises, such as a family death or a divorce, can impact the success of a farm. Some important factors farmers should take into account are:

  • Poor Yield
  • Changing Costs of Inputs
  • Debt or Lack of Credit Available
  • Government Policies
  • Uncertain Commodity Prices

Some of these risks can be managed through insurance, like crop yield insurance, financial planning, and diversification of crops and livestock. Many farmers also have off-farm employment for supplemental income.

Final Thoughts

The importance of agriculture cannot be understated. The hard work of farmers allows us to share delicious food with friends and family, provides fibers that can be used in clothing and textiles, and produces numerous raw materials. It’s also a major driver in the U.S. and global economies.

Like in any other business, farmers face risks, like market forces, government policy, and internal financial pressures. At the same time, agriculture is also heavily affected by climate and environmental events, which cannot be controlled. It’s no wonder it takes grit and an impressive amount of skill to operate a farm.

AcreTrader provides opportunities for farmers and farm managers to access more land, grow their businesses, and more. Learn more about how we partner with farmers.

Please note: this article is meant to be a topical overview and, as such, does not include specific financial advice. Every situation is unique, and you should consult with a licensed attorney, accountant, and/or financial advisor prior to entering any written contract or verbal agreement.

Sarah
Sarah Day

Writer

Sarah Day grew up in the Ozark woods and also spent a couple of years on Washington’s cranberry coast. Her writing career spans numerous industries, but she feels most at home writing about land and all things outdoors. When she’s not writing, Sarah enjoys reading in the sunshine, spending time with family, and painting.

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