May 19, 2000

Profit: biggest challenge of
young producers, survey shows

America’s young farmers and ranchers say government policies to boost U.S. farm exports, such as establishing permanent normal trade relations with China, are the best way to address the top challenge facing them today—profit.

Those were among the results of a survey of 302 young farmers and ranchers from 47 states, ages 18-35, conducted by the American Farm Bureau Federation.

The eighth annual survey of participants of AFBF’s Young Farmer & Rancher Program revealed the traditional optimism of younger producers has been tempered by economic challenges, but they continue to invest in new technology and business practices to sharpen their competitive edge and protect the environment.

Overall results of the informal survey, conducted during the recent World Congress of Young Farmers, show that the future of American agriculture is in competent and caring hands.

Reflecting present farm economic conditions, more than a third (36.1 percent) of the young farmers surveyed said overall profitability was their top concern, up from last year’s 32.4 percent and considerably higher than 1998’s 18.6 percent.

The cost of government regulations was second (13.6 percent), while the availability of land and other resources was third (11.7 percent). Over the survey’s eight-year history, profitability has topped the list of concerns five times and regulations three times.

Like last year, the fourth largest challenge this year was urban encroachment on farmland, selected by 9.1 percent of the respondents. Fifth on the list was competition from larger farms, followed closely by tax burdens. Labor availability and related regulations was seventh.

This year’s other top challenges, in descending order, were the willingness of parents to turn over more control of the farm, availability of financing and health care availability.

The young farmers view international trade as the key to profitability. For the third straight year, respondents said boosting U.S. agricultural exports was the most important step the U.S. government could take to help them and their farms. At 38.4 percent, that response was a slight increase over last year. Congress is currently considering a measure to establish permanent normal trade relations with China, which is projected to boost U.S. farm exports to that nation by at least $1 billion annually.

A distant second (13.9 percent) was federal tax reform. Strengthening protection for property owners was third at 11.2 percent. Rounding out other choices with percentages higher than 5 percent were: providing more financial assistance for beginning farmers; federal regulatory reform; provide higher counter-cyclical income support; and monitor and enforce anti-trust laws related to agricultural concentration.

Nearly two-thirds of the young farmers said once the current farm program expires, farm income should continue to be supplemented to some degree by the federal government. Only 34.5 percent said farm income should come totally from the marketplace. That represents a near turnaround from just two years ago, when 66.8 percent said farm income should come only from the market. Last year, that response was split evenly.

The use of technology by young farmers and ranchers continues to skyrocket. Internet access among young farmers rose sharply to 77.2 percent, up a full 25 percentage points from last year. Figures show that nationally, only about 43 percent of American households are connected to the Internet. Just four years ago, only 10.5 percent of young farmers reported having Internet access.

Overall, computers are used on the farm by 90.7 percent of those surveyed, up 11 percentage points from 1999. While just 5.6 percent of respondents reported having their own Internet home page, there was a 17.9 percentage-point jump in the number of young farmers who communicate through electronic mail (65.2 percent).

Another technology area that increased was the number of young farmers who plant biotech crops or plan to do so within the next two years. This year’s 59.3 percent response was the highest ever and 2.1 percentage points above last year.

The use of global positioning systems and global information services, where satellite technology is used to plot precise field activities, saw an increase of 8 percentage points, to 23.5 percent.

Mirroring past surveys, this year’s respondents reported a strong commitment to conservation and the use of environmentally beneficial farming practices. Nearly two-thirds said they employ conservation tillage on their farms. More than six out of 10 respondents (60.3 percent) said they regularly test soil or crop tissue prior to application of nutrients, and 53.6 percent said they practice crop rotation with three or more crops. More than a third (38.4 percent) said they use integrated pest management techniques such as field scouting to reduce crop protectant use.

Regarding other practices, 28.8 percent regularly test their private well water; 24.5 percent use contour farming or strip cropping; 23.5 percent leave buffer strips to benefit wildlife; 23.2 percent have land enrolled in the conservation reserve program; and 16.2 percent owned wetland resources that they actively manage.

Approximately 95 percent of the young farmers surveyed said they select farming practices based on both the environment and economics. According to the survey, 74.7 percent said both with a slight emphasis on economic, while 19.9 percent said both with an emphasis on the environment. Those results generally mirror the findings from previous years.

To supplement farm income, 71.3 percent of the young farmers surveyed said that they, their spouse, or both work off the farm. That’s up from last year’s 67.9 percent. From that group, wives were the sole source of off-farm income 61.2 percent of the time, and husbands were the sole source 11.2 percent of the time. Both spouses contributed to off-farm income in 27.7 percent of those cases. Of those young farmers reporting off-farm employment, 51 percent said the availability of health insurance was the primary reason. In addition to off-farm employment, 62.2 percent of respondents said their farm income is supplemented by other farm-related enterprises such as custom work, truck driving and seed or supply sales.

According to the survey, 58.8 percent of the respondents started farming or ranching as a member of a family partnership, while 19.3 percent started on their own.