MacDonald: Tracking Ag Consolidation

Previous studies of farm consolidation concluded that farm consolidation slowed in the 1970s and continued to slow, or even stop, in the 1980s. In Tracking the Consolidation of U.S. Agriculture, published in Applied Economic Perspectives and Policy, James M. MacDonald (Maryland, Ag Econ) challenges this narrative. MacDonald takes a new look at the data and argues, instead, that consolidation has continued at a rapid pace and been widespread across commodities.

Drawing on 40 years of experience with the USDA Economic Research Service, MacDonald emphasizes the importance of how data is reviewed. He shows that two types of averages - mean and midpoint - can tell very different stories about farm consolidation. Mean farm size, relied on by earlier studies of farm consolidation, shows a 21% increase from 222 acres in 1982 to 268 acres in 2017. In contrast, midpoint farm size rose from 589 acres in 1982 to 1,445 acres in 2017, a 145% increase.

This consolidation was also widespread across commodities. The midpoint values grew for fifty-three of the fifty-five crops examined . Further, for livestock, the 2017 midpoint values exceed the 1987 values for every commodity investigated. But, again emphasizing variations within large data sets, the author points out that some commodities like hogs, egg layers, and milk cows saw much more dramatic midpoint increases than other categories, likely reflecting more revolutionary changes in technology.

MacDonald also makes an interesting point about how farmland is considered in the consolidation conversation. He argues that historic focus on a catch-all category of all farmland in general has missed important sub-trends. For example, while farmland in general did shift to larger operations, cropland consolidation in particular was much more dramatic during the same period. Further, in contrast to cropland, permanent pasture and rangeland shifted in the opposite direction, moving from larger farms and ranches to smaller operations during 1987-2017. These details are lost when only farmland more generally is analyzed.

Overall, Tracking serves as an important reflection on the utility of microdata and more critical analysis of survey designs. MacDonald’s midpoint-based conclusion that farm consolidation was persistent and widespread also raises questions - and challenges assumptions - about the importance of farm policies, commodity programs, and the role of technological innovations in consolidation.

This digest benefited from significant contributions from Aurora Kenworthy, UNL Law Student.