Measurement of Output, Inputs, and Total Factor Productivity in U.S. Agricultural Productivity Accounts

The U.S. Department of Agriculture (USDA) has been monitoring the U.S. farm sector’s productivity performance since the 1960s. Today, USDA, Economic Research Service (ERS) bases its U.S. agricultural productivity statistics on a sophisticated system of production accounts, drawing data from numerous sources. A notable feature of the U.S. productivity accounts is the input quality adjustment, as some inputs have undergone significant changes in their quality over time. According to USDA, ERS estimates, between 1948 and 2021, total farm output grew by 1.46 percent annually. With total input declining by -0.03 percent per year on average, total factor productivity has become the primary driver in promoting output growth, increasing by 1.49 percent per year. Over time, the input composition has changed, shifting from labor and land use to more use of intermediate inputs (e.g., fertilizer, pesticides, and purchased services) and durable capital assets (e.g., tractors, combines, and other machinery). Input quality changes in labor, capital (including land), and intermediate inputs have contributed positively to annual output growth by 0.11, 0.04, and 0.04 percentage points, respectively.