Crop Production Industry Trends

Farm Income Rises

Net farm income in grain and oilseed farming continues to rise, due largely to federal support for corn for ethanol. Many farms are growing grain corn instead of soybeans, vegetables, and other field crops, leading to price hikes as supply declines. The grain corn industry has doubled in value over the past five years as the price of corn has increased from under $2 a bushel to $4. The soybean industry has increased 50 percent in value despite a slight decline in acreage.

Fewer, Larger Farms

Farming continues to evolve from a lifestyle into a business: the 12,000 commercial crop farms with over $1 million in annual revenue account for almost half of US crop production. The average farm size has risen to 500 acres; the total number of farms has fallen below 2 million. Total US acreage devoted to farming has fallen steadily in the past 50 years.

Operating Costs Rise

Seed, fertilizer, electricity, fuel, and machinery are getting more expensive for US crop farms. Operating costs have risen 50 to 80 percent over the past three years. Many grain and oilseed farmers believe that the increased yield from genetically modified (GM) seed is negated by higher operating, overhead, and seed costs.

Corn Acreage Displacing Wheat, Soybeans

Farms on a traditional corn-soybean crop rotation are increasingly shifting to a corn-corn-soybean pattern. Some farms are abandoning crop rotation: the high payout from grain corn is worth the increased risk of disease or poor yield. Total acreage for corn has risen 20 percent over the past decade, while soybean and wheat acreage has dropped slightly.

More Biotech Crops

Despite international trade bans and wary consumers, a record number of GM crops are being planted. GM seeds now account for 75 percent of all planted acres of corn and 90 percent of soybean and cotton. US farmers have so far avoided biotech sugar beets, potatoes, and sweet corn, because major food companies won't buy them.