Three Key Farm Trends from the 2022 Ag Census
Farm income was at an all-time high in 2022 but not without challenges, according to the latest ag census.
With multiple records broken, 2022 was a historic year for agriculture. Farmers saw record-high income and land values. But the latest ag census also revealed a deeper, more concerning story regarding the current and future state of American agriculture—farms are shrinking in numbers and expanding in size.
Keep reading to learn more about the top three farm trends the 2022 ag census revealed and why it should matter to all of us.
1. Farms are consolidating.
Since the 1980s, we’ve lost more than half a million farms. Between the years 2017 and 2022, America lost almost 20 million acres of farmland. That’s nearly equal to the entire state of South Carolina.
Despite this rapid decline, the average farm size increased five percent to 463 acres. This ag census data highlights the trend toward farm consolidation as more and more family farm operations are feeling the pressure to go big or get out.
One factor contributing to this problem is that more farmers are retiring than entering the industry, leading to an increase in the average age of the American farmer. The average age of farmers has steadily risen since 2002 and is now around 58 years old. Without someone to take over the farm, or without a succession plan in place, many operations buckle under legalese and estate tax.
The good news: When compared to the 2017 ag census, there was a slight increase in people under 35 becoming farmers. There were almost four percent more young farmers in 2022 than in 2017. If this trend continues, we could see the average age of farmers decrease for the first time in more than twenty years in the next ag census.
2. Farming is getting more expensive.
In 2022, the price of nearly everything was up. Farms had more value in assets, more liabilities, and increased equity compared to 2021. But despite farm income hitting an all-time high, less than half of farms (43 percent) saw positive net cash farm income.
Farm production expenses totaled $424 billion in 2022, a 17.8 percent increase from 2017. Feed was the largest expense item accounting for 18.5 percent of all farm expenditures. Livestock purchases and labor came in second and third.
The good news: Economists don’t expect to see input costs spiking significantly in 2024. Although some categories like labor, machinery, and insurance are predicted to increase, other categories like fertilizers and chemicals are expected to decline.
3. Farmland remains a crucial asset.
Although input costs were up, farmland values were up too. Farms gained more than 10 percent in equity in 2022. From 2009 to 2023, cropland value increased by 107 percent and pastureland increased by 66 percent.
At $155 per acre, the average rate to rent cropland in the United States in 2023 was $7 higher than in 2022. Irrigated cropland rent was up 4.4 percent and non-irrigated land was up 5.2 percent.
The good news: In 2024, economists expect land value appreciation to slow, but do not predict significant decreases. Farmers who own their land have access to valuable equity they can use to invest in their operations.
Farmland Belongs in the Hands of Farmers
While the 2022 ag census shows a worrying trend of family farms in decline, it’s a good reminder of how important it is for them to have people in their corner who are committed to providing the support they need to evolve in a changing world.
At AgAmerica, we believe farmland belongs in the hands of farmers. We work diligently to protect one of America’s fastest-disappearing assets—agricultural land and the people who steward it. If you need capital for your operation or you’re looking for a lender who is on your side, don’t hesitate to contact us. Our custom-made loans are designed with the farmer in mind to provide you with flexible capital that makes the most sense for your unique operation and supports your long-term success.
