By Cole Lauterbach/Illinois Radio Network
SPRINGFIELD – Nearly every farm in America is still family-owned, according to the U.S. Department of Agriculture, but most aren’t making much money.
The family farmer owns 99 percent of the farmland in the country and accounts for 89 percent of all production, according to the USDA’s annual snapshot of the country’s farmers. What researchers find troubling is that a growing number of farmers aren’t making enough to survive on just farm income.
USDA Agricultural Economist Bob Hoppe said the largest portion of farmers in the country have small farms with a total income of $350,000 or less and profit margins of under 10 percent, meaning they need other income.
“Most of their income doesn’t come from farm income; it comes from off-farm work or, in the case of ‘retirement farms,’ Social Security,” Hoppe said.
Hoppe said the average farmer’s age is rising, meaning fewer are passing the farm down to their kids, instead working less in retirement or cash-renting the land to other families.
“The farm population is fairly old,” Hoppe said. “You have people that are retiring and staying on their land, but still doing enough production to be counted as an operating farm.”
The most common type of farm is the small family farm in which the owner has another main occupation beyond farming. Up to 78 percent of small farms are making less than 10 percent profit on their land.
In spite of the low profits, federal inheritance taxes take effect when a farmer owns over $4 million in total assets. State inheritance taxes take effect at $5.45 million.
According to the Illinois Society of Professional Farm Managers and Rural Appraisers, an acre of high-quality farmland in Illinois averages $11,737. Little more than 460 acres of farmland at that price would trigger the Illinois estate tax. That’s not considering the value of machinery, structures or livestock.
While it is a small number of operations, the large family farm, with gross income of $5 million or more, accounted for almost a quarter of the country’s farm production in 2015.
