The Financial Difficulties Of U.S. Farmers

Worldwide, animal agriculture poses many problems. These include massive greenhouse gas emissions that contribute to global warming, a huge need for farmland that leads to large-scale deforestation, increased proliferation and transmission of pathogens, and of course, the abuse and killing of billions of animals per year. 

In the U.S. and elsewhere, the economic model of industrial agriculture threatens the financial health of many farmers. This is problematic because farmers are the foundation of our food system and, in many cases, they are willing to work with advocates to make farming more humane. This report provides an overview of their economic situation, with a focus on animal farmers, to better understand this issue. 

There are about 2 million farms in the U.S., defined as places that produce at least $1,000 worth of agricultural products for sale during the year. Of these, about half are engaged in raising animals, with around 650,000 farms focusing on cows. There are about 3.4 million farmers working in the U.S., with an average age of 58 years. Of these, 36% are women, 64% are men, and 95% identify as white. Nationally, farmland covers approximately 900 million acres. But the distribution is very unequal, with 4% of farms having 58% of farmland while 13% have only 0.14%. 

Many farmers are under contract to produce specific commodities. In 2017, 21% of those involved in crop production were under contract compared to 49% of those involved in animal production. While some contracts are beneficial to farmers, most are not, especially in some sectors such as chicken production where 90% of farms are under contract. 

One of the problems with production contracts is that in many cases, farmers don’t own the commodities and are only paid when production is complete. In addition, they’re paid according to their performance relative to others, in a tournament system. The contract system encourages production at lower cost, and it doesn’t take into account certain contingencies that are beyond the farmers’ control, such as weather or disease. Overall, it doesn’t provide farmers with a reliable and sufficient income. 

In 2017, farmers earned an average of $21,478 from their farms, which is slightly lower than previous years. The median net farm income of some industries is below that figure.  To supplement their income, most farmers have to turn to non-farm activities, with 58% of farmers saying they had another income-making activity more lucrative than farming.  

Many farmers have debts, especially real estate debt, which add to their difficult financial situation. In 2019, 23% of beef cow farmers, 66% of dairy farmers, 48% of pig farmers, 41% of chicken farmers, and 28% of fruit, vegetable, or nut farmers had debt. Loans can range from an average of $28,000 for goat farming up to an average of $915,000 for chicken processing. Loan values typically vary by industry.  

The low incomes of some farmers, combined with their debts, lead to bankruptcies every year. From 2018 to 2019, family farmers and fishermen bankruptcies increased by 20%, reaching 599 filings across the country. 

The COVID-19 pandemic also affected the financial health of farmers, reducing the production of some commodities such as milk and chicken meat. Although the U.S. government offered relief packages to farmers, small-scale farmers received less than 1% of the total amount. Meanwhile, the country’s largest farms received over 20% of the allocated money.  

The poor financial health of many farmers should be considered along with the environmental, health, and animal abuse problems associated with factory farming. This is one more argument that animal and environmental advocates can use to bring attention to the harms of animal agriculture and to call for a more sustainable, equitable, and plant-based farming system.