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Farm entry and exit from US agriculture

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  • Ani L. Katchova
  • Mary Clare Ahearn

Abstract

Purpose - The purpose of this paper is to use a linked-farm approach and a cohort approach to estimate farm entry and exit rates using the US Census of Agriculture. The number of new farms entering agriculture was re-estimated and adjusted upward since not all new and beginning farmers are known to US Department of Agriculture. Design/methodology/approach - In addition to a linked-farm approach (linking farms over time), a cohort approach (farms that started operating in the same year) is used to determine exit rates conditional on the number of years a farm has been operating. Linear forecasting, moving-average forecasting, and using data from a later Census are used to re-estimate the number of new farms in their first year of operating. Findings - Using the linked-farm approach, an average annual entry rate of 7.5 percent and exit rate of 8.5 percent is estimated for 2007 to 2012, which vary based on the farmer’s lifecycle. The cohort approach shows that exit rates are lower than 4 percent for the first 40 years of operating a farm business and then exit rates gradually increase. Revised estimates of approximately 70-80,000 new farms entering each year are calculated, which are considerably higher numbers than the 30-40,000 new farm entrants participating in the Census of Agriculture. Originality/value - The linked-farm and cohort approaches are used to provide updated estimates for farm entry and exit using new Census data and to make comparisons with previous years. To the authors’ knowledge, this is the first study to provide revised estimates for new farm entrants into US agriculture.

Suggested Citation

  • Ani L. Katchova & Mary Clare Ahearn, 2017. "Farm entry and exit from US agriculture," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 77(1), pages 50-63, May.
    • Handle: RePEc:eme:afrpps:afr-03-2016-0021
    DOI: 10.1108/AFR-03-2016-0021
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    Cited by:

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    2. Lai, John & Olynk Widmar, Nicole J. & Gunderson, Michael A. & Widmar, David A. & Ortega, David L., 2018. "Prioritization of farm success factors by commercial farm managers," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(6), July.
    3. Geoffroy Enjolras & Philippe Madiès, 2017. "The determinants of financial distress in French farms: Analysts versus Algorithms," Post-Print hal-02048313, HAL.
    4. Alexander Zorn & Franziska Zimmert, 2022. "Structural change in the dairy sector: exit from farming and farm type change," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-31, December.
    5. Fertő, Imre & Bojnec, Štefan & Iwasaki, Ichiro & Shida, Yoshisada, 2024. "Why do corporate farms survive in Central and Eastern Europe?," Agricultural Systems, Elsevier, vol. 218(C).
    6. Nadolnyak, D. & Griffin, B. & Hartarska, V., 2018. "Farmer Retirement and Disinvestment in the U.S," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277184, International Association of Agricultural Economists.
    7. Adjei, Eugene & Hartarska, Valentina M., 2022. "An Impact Analysis of the Transition Incentive Program on Beginning Farmers and Ranchers in Rural United States," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322506, Agricultural and Applied Economics Association.
    8. Griffin, Bretford & Nadolnyak, Denis A. & Hartarska, Valentina, 2018. "Exit and Disinvestment of Retirement Age Farmers in the US," 2018 Annual Meeting, August 5-7, Washington, D.C. 273975, Agricultural and Applied Economics Association.
    9. Geoffroy Enjolras & Philippe Madiès, 2020. "The role of bank analysts and scores in the prediction of financial distress: Evidence from French farms," Economics Bulletin, AccessEcon, vol. 40(4), pages 2978-2993.
    10. Kitenge, Erick, 2022. "Determinants of entries into and exits from the US farming sector," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 379-385.
    11. Ana Claudia Sant'Anna & Ani L. Katchova, 2023. "How economic conditions changed the number of U.S. Farms, 1960–1988: A replication and extension of Gale (1990) to midsize farms in the United States and abroad," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(3), pages 1400-1426, September.
    12. ABDELHAMID, Mohamed Ben & BELLALAH, Makram, 2023. "Investigating The Optimal Exit Timing And Leverage During The Covid-19 Crisis," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 27(1), pages 18-38, March.
    13. Zorn, Alexander & Zimmert, Franziska, 2020. "Structural adjustment of Swiss dairy farms - farm exit and farm type change," 60th Annual Conference, Halle/ Saale, Germany, September 23-25, 2020 305605, German Association of Agricultural Economists (GEWISOLA).
    14. Emmanuel Paroissien & Laure Latruffe & Laurent Piet, 2021. "Early exit from business, performance and neighbours’ influence: a study of farmers in France [Effects of differing farm policies on farm structure and dynamics]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 48(5), pages 1132-1161.
    15. Griffin, Bretford & Hartarska, Valentina & Nadolnyak, Denis, 2018. "Entry and Exit from Farming: Insights from 5 Rounds of Agricultural Census Data," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266616, Southern Agricultural Economics Association.
    16. Bretford Griffin & Valentina Hartarska & Denis Nadolnyak, 2020. "Credit Constraints and Beginning Farmers’ Production in the U.S.: Evidence from Propensity Score Matching with Principal Component Clustering," Sustainability, MDPI, vol. 12(14), pages 1-12, July.
    17. Denis Nadolnyak & Valentina Hartarska & Bretford Griffin, 2019. "The Impacts of Economic, Demographic, and Weather Factors on the Exit of Beginning Farmers in the United States," Sustainability, MDPI, vol. 11(16), pages 1-17, August.

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    More about this item

    Keywords

    Beginning farmers; Farm entry; Farm exits; Q12; Q15; Q18;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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