January 21, 2000

USDA surveys about 8,500 farms and ranches for in-depth data on financial information. The 1998 survey data were used to develop a set of eight farm types based on dollar sales of crops and livestock, total value of farm assets, total operator income, non-farm occupation and retirement. Of the estimated 2.06 million farms, 1.7 million (82.2 percent) rely mostly on non-farm income. These farms are defined as retirement, residential/lifestyle, limited resource and farms with sales of less than $100,000 per year. The remaining 367,000 farms, 17.8 percent of all farms, had sales of $100,000 or more per year and on average rely on farming for roughly half or more of their family income.

Eight farm type definitions are:

Family Farms (sales less than $250,000). Small farms whose operators report they are retired (excludes limited-resource farms operated by retired farmers).

Residential/lifestyle. Small farms whose operators report a major occupation other than farming (excludes limited resource farms with operators reporting a non-farm major occupation).

Resource. Any small farm with: gross sales less than $100,000, total farm assets less than $150,000, and total operator household income less than $20,000. Limited-resource farmers may report farming, a non-farm occupation, or retirement as their major occupation.

Occupation/lower-sales. Small farms with sales less than $100,000 whose operators report farming as their major occupation (excludes limited-resource farms whose operators report farming as their major occupation).

Occupation/higher-sales. Small farms with sales between $100,000 and $249,000 whose operators report farming as their major occupation.

Family farm. Farms with sales between $250,000 and $499,999.

Large family. Farms with sales of $500,000 or more.

Family. Farms organized as non-family corporations or cooperatives, as well as farms operated by hired managers.

The number of retirement farms and residential/lifestyle farms total over 1.1 million farms and account for 54.5 percent of farms. They are not logical targets for traditional farm policy activities.

Resource farms total just over 150,000 farms, 7.3 percent of all farms. Remember, they have gross sales of less than $100,000 per year, farm assets of less than $150,000 and total operator income from farm and non-farm sources of less than $20,000 per year. On average, they have gross cash farm income of $7,400 per year, net farm income of minus $600 and off-farm income of over $13,000 per year. With their small gross cash farm receipts, they are also outside the traditional farm policy framework,with sales of less than $100,000 and farming as the principal occupation, but not limited.

Resource farms totaled about 420,000 farms, 20.4 percent of all farms. They have average gross cash farm income of $35,000, but only $1,000 in net farm income. They have off-farm household incomes of over $37,000 per year. They could be help-ed marginally by traditional farm policies, but would likely continue to rely mostly on non-farm income. This group, which has an average network of $522,000, may more accurately fit the retirement or lifestyle farms.

Four groups total 1,697,700 farms, 82.2 percent of the farms. The last four groups, family farms with sales of $100,000 to $249,999, family farms with $250,000-$499,999 sales, family farms with sales of $500,000 or more and non-family farms, total 366,977 farms, or 17.8 percent of all farms. These farms on average get half or more of their income from farm sources and have total assets of $750,000 or more. These groups are the ones most people think about when farm policy issues are discussed.

The number of family farms with sales of $100,000-$249,999 in 1998 was 171,500, 8.3 percent of all farms. They had an average gross cash income of $161,000 and average net farm income of $25,300, 15.7 percent of gross cash income. They had average off-farm incomes of $28,700.

Family farm category with sales of $250,000-$499,999 per year had 91,900 farms, or 4.5 percent of all farms. They had an average gross cash income of almost $350,000 with net cash income of almost $53,000, 15.2 percent of gross cash income. Average off-farm income was $47,000.