Mapleton Mail

Different Types of Farms

Here in Central Illinois, we are surrounded by farm ground, which makes it easy to lose perspective on how many different types of farms there really are. Especially for record keeping, it is important to have a classification system to be able to categorize farms of various types and sizes. The United States Department of Agriculture (USDA) uses a categorization system developed by the Economic Research Service (ERS) for reporting and evaluation. According to the USDA, this system classifies farms mainly depending on “annual gross cash farm income of the farm business, the primary occupation of the operator, and ownership of the farm”. As a reminder, gross income is total income from all sources before deductions are made or expenses and taxes. In the ERS classification system, farm size is measured by annual gross cash farm income (GCFI), which is the measure of the farm’s revenue. The ERS defines farm revenue as, “sales of crops and livestock, payments made under agricultural federal programs, and other farm-related cash income including fees from production contracts.” Now, let’s get into the 4 branches of ERS classification and the explanation of each (provided by the USDA and the ERS).

The first group is Small Family Farms. In this category, the farm has a GCFI (gross cash farm income) of less than $350,000. In the Small Family Farms group, you will find Retirement Farms, Off-Farm Occupation, and Farming-Occupation Farms. Retirement Farms have a principal operator that is officially retired; however, they continue to farm on a small scale. The Off-Farm Occupation group is a small farm whose principal operator has a primary occupation outside of their farm. The Off-Farm Occupation group also includes operators who do not consider themselves in the labor force. The last group within Small Family Farms is Farming-Occupation Farms. These are small farms with a principal operator who has a primary occupation of farming. There are two further classifications within this group, which are Low-Sales Farms and Moderate-Sales Farms. Low-Sales Farms have a GCFI of less than $150,000 and Moderate-Sales Farms have a GCFI of between $150,000 and $349,999. Small farms make up 90% of all U.S. farms. 

After Small Family Farms, the classification moves up to the Midsize Family Farms Group. This group has a GCFI between $350,000 and $999,999 and has no further classifications within the group. After Midsize Family Farms comes Large-Scale Family Farms, which have a GCFI of $1,000,000 or more. Within the Large-Scale Family Farms group are Large Farms and Very Large Farms. Large Farms have a GCFI between $1,000,000 and $4,999,999. Very Large Farms have a GCFI of $5,000,000 or more. Finally, the last group is Nonfamily Farms. The ERS defines a Nonfamily Farm as, “Farms where an operator and persons related to the operator do not own a majority of the businesses.” These farms account for only 2% of all farms. 

These groupings are important for reporting and evaluation purposes. In order to even classify as a farm, the place in question must meet the definition of a farm provided by the USDA. The USDA defines a farm as, “any place that produced and sold – or normally would have produced and sold – at least $1,000 of agricultural products during a given year.” Acres of crops and head of livestock are the determinants of if a place with sales less than $1,000 would normally produce and sell at least $1,000. This definition means that a lot more places are farms than you would imagine. Especially being an agriculture community, it can be easy to forget that something that only produces sales of $1,000 of agricultural products is still considered a farm.