Readings

Characteristics and Production Costs

This series of reports presents information on how production costs vary among producers of different commodities and the possible reasons for this variation. Reports also include details on production practices and input use levels, as well as farm operator and structural characteristics.

Structure, Management Practices, and Production Costs of U.S. Beef Cow-Calf Farms

The cow-calf segment of the U.S. beef industry is diverse in farm size, structure, and location, with farms located in every State and ranging from very small to very large. Modest structural change has occurred in this segment over the past two decades, resulting in moderately fewer farms that produce more animals and are more specialized in cow-calf production. This report compares cow-calf farms by region, farm size, phases of beef production that are present on the farm, and farm typology using the cow-calf version of the 2018 USDA Agricultural Resource Management Survey. Larger scale cow-calf farms were found in the Northern Plains and West regions, whereas smaller scale farms tended to be located in the Southeast and Southern Plains regions. Larger scale cow-calf farms had lower economic costs per cow and tended to adopt advanced technologies, management practices, and production systems at greater rates than smaller farms (July 2023).

Characteristics and Trends of U.S. Soybean Production Practices, Costs, and Returns Since 2002

In the past 20 years, U.S. soybean acreage has grown 18 percent, from 74 million to 87 million acres. Soybean yields have also increased. This study uses nationally representative survey data of U.S. soybean farmers (along with costs and returns data) to examine how production practices, export demand, public policy, and environmental factors have changed over the past 20 years (June 2023).

U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth

The hog sector began a major transformation in the early 1990s, and since then, it has experienced productivity growth and structural change, increased output, and expanded exports. This study examined changes in hog production from 1992 to 2017. During this period, production contracts became the most common business model in hog production, and hog farms grew larger and more specialized. Technological advancements improved productivity, though changes in production costs were mixed (August 2022).

Trends in Production Practices and Costs of the U.S. Corn Sector

Corn for grain is a major field crop in the United States, with wide-ranging uses including animal feed, ethanol, food, beverages, industrial products, and exports. This report describes the technological and structural changes in U.S. corn production over 1996-2018, and describes how these changes have affected farm expenditures, net returns, productivity, yields, and production costs (July 2021).

Consolidation in U.S. Dairy Farming

The number of licensed U.S. dairy herds fell by more than half between 2002 and 2019, with an accelerating rate of decline in 2018 and 2019, even as milk production continued to grow. Production has been shifting to much larger but fewer farms, and that shift shows no sign of slowing. Larger operations realize lower costs of production, on average, and those advantages persist (July 2020).

U.S. Rice Production in the New Millennium: Changes in Structure, Practices, and Costs

Farms growing rice changed significantly from 2000 to 2013 in terms of operation size and the ways in which rice is produced. The adoption of new technologies in rice farming pushed per-acre production costs higher, but rice yields and productivity also increased, offsetting the higher costs (December 2018).

Changing Structure, Financial Risks, and Government Policy for the U.S. Dairy Industry

Congress created the Dairy Margin Protection Program (MPP-Dairy) in 2014 to provide farmers with financial protection against risks from increasing volatility in milk and feed prices. This report focuses on the interrelated topics of structural change in dairy production, changes in dairy product markets, growing price volatility, and dairy policy (March 2016).

The Profit Potential of Certified Organic Field Crop Production

This report uses ARMS data from organic and conventional corn, wheat, and soybean producers to examine the profitability of organic field crop production. Findings show that significant economic returns are possible from organic corn and soybean production primarily due to the higher price premiums paid for organic crops that offset the additional economic costs of being organic. Organic wheat was less profitable. Despite potentially higher returns, the adoption of organic field crop production has been slow and its challenging due to such factors as achieving yields, effective weed control, and the processes involved with organic certification. Organic acreage is also constrained by climatic and market factors (July 2015).

U.S. Wheat Production Practices, Costs, and Yields: Variations Across Regions

The study explores the variation in wheat yields and production costs across U.S. regions, based on data from the 2009 Agricultural Resource Management Survey (August 2013).

U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth

This report uses 1992, 1998, 2004, and 2009 ARMS data for U.S. hog farms to study changes in U.S. hog production during 1992-2009. Findings show that U.S. hog production has evolved into an industry with larger hog enterprises, increased specialization in a single phase of production, greater reliance on purchased feed rather than feed grown on the farm, and an increased reliance on formal contracts—connecting farmers, hog owners, and packers—to coordinate production. This structural change contributed to substantial productivity gains for hog farms, likely benefiting U.S. consumers in terms of lower pork prices and enhancing the competitive position of U.S. producers in international markets—though larger hog farms may increase environmental risks by concentrating production in areas with limited land available for manure application (October 2013).

The Diverse Structure and Organization of U.S. Beef Cow-Calf Farms

This report uses 2008 ARMS data for U.S. beef cow-calf farms to study their structure and organization. Findings suggest that many small operations are "rural residence farms" that specialize in beef cow-calf production, but their income from off-farm sources exceeds that from the farm. Most beef cow-calf production occurs on large farms, but cow-calf production is not the primary enterprise on many of these farms. Findings suggest that operators of beef cow-calf farms have a diverse set of goals for the cattle enterprise (March 2011).

Characteristics, Costs, and Issues for Organic Dairy Farming

This report uses 2005 ARMS data for U.S. dairy operations, which include a targeted sample of organic milk producers, to examine the structure, costs, and challenges of organic milk production. Findings suggest that economic forces have made organic operations more like conventional operations and that the future structure of the industry may depend on the interpretation and implementation of new organic pasture rules (November 2009).

The Changing Economics of U.S. Hog Production

This report uses 1992, 1998, and 2004 ARMS data for U.S. hog farms to study the structural and productivity changes in U.S. hog production from 1992-2004. Findings show that large operations specializing in a single phase of production are replacing farrow-to-finish operations that performed all phases of production. The use of production contracts has increased. Operations producing under contract are larger than independent operations and are more likely to specialize in a single phase of production. These structural changes have coincided with substantial gains in efficiency for hog farms and lower production costs. Most of these productivity gains are attributable to increases in the scale of production and technological innovation (December 2007).

Profits, Costs, and the Changing Structure of Dairy Farming

U.S. dairy production is consolidating into fewer but larger farms. This report uses data from several USDA surveys to detail that consolidation and to analyze the financial drivers of consolidation. Specifically, larger farms realize lower production costs. Although small dairy farms realize higher revenue per hundredweight of milk sold, the cost advantages of larger size allow large farms to be profitable, on average, even while most small farms are unable to earn enough to replace their capital. Further survey evidence, as well as the financial data, suggest that consolidation is likely to continue (September 2007).