No, there are also mid-size and large-scale family farms. Many of those are owned by corporations, but that corporation is owned by a single family so it counts as a family farm. "Small" is defined as gross income of $250,000 or less.
A gross income of 250,000 isn't a small farm, it's a hobby farm. The average margin for farms is 15%, and smaller farms are worse than large farms. A $250,000 gross likely means a <$20K net, and you can't support a family on that in America even if you grow your own food.
Worse than the small margin is the variability. A good year can have a 50% margin and a bad year a -25% one.
> So what’s going on here—why is the perception of “corporate farming” so widespread when actually almost all of the country’s food is being grown or raised by family-owned operations?
> It might have something to do with the fact that corporate agribusiness is indeed very real—it’s just that it has carved out the most profitable parts of food production for itself, while leaving the dirty, uncertain work of farming for others.
> The reality is that farming itself is generally a terrible business. There’s much more—and much easier—money to be made by selling farmers the raw materials of their trade—like seeds, fertilizer, or livestock feed. And there’s also plenty of money in buying farmers’ output cheap (say, corn or hogs) and selling it dear (as, say, pork chops or high-fructose corn syrup). In his excellent 2004 book Against the Grain: How Agriculture Has Hijacked Civilization, Richard Manning pungently describes the situation:
>> A farm scholar once asked an agribusiness executive when his corporation would simply take over the farms. The exec said that it would be dumb for the corporation to do so, in that it is not free to exploit its employees to the degree that farmers are willing to exploit themselves.
I'm curious how many acres you have. We have a 10 acre field that has been used to grow hay for horses for the last 20 years, but I am thinking of diversifying into a cash crop.
> For nearly two centuries, the Rieckmann family has raised cows for milk in this muddy patch of land in the middle of Wisconsin. Mary and John Rieckmann, who now run the farm and its 45 cows, have seen all manners of ups and downs — droughts, floods, oversupplies of milk that sent prices tumbling. But they’ve never seen a crisis quite like this one.
> The Rieckmanns are about $300,000 in debt, and bill collectors are hounding them about the feed bill and a repayment for a used tractor they bought to keep the farm going. But it’s harder than ever to make any money, much less pay the debt,
> Farming is a risky business. A sudden storm, enduring drought, or proliferation of crop disease can decimate a crop. Even when farmers produce a bumper crop, market downturns can still make it a struggle to make ends meet. In Montana’s “Golden Triangle,” farms of all sizes and types are confronting risk amidst a faltering farm economy.
> Running a first-class restaurant is risky enough; running a farm is even riskier.
> One would think that with all the advancements in agriculture over the last half century surely the risky business of farming has become more predictable and stable. Farming is less intuitive and more data-driven, but that hasn 't eliminated the uncertainty of it.
> Risk is the probability of an unwanted event occurring, and every year farmers and ranchers brace themselves for these unwanted events. In 2015, the spring outbreak of avian influenza and the western drought were at top of the list. ... Across agriculture, net farm income is expected to drop by more than a third in 2015. The final numbers won't be known for some time, but it will likely be the worst drop since 1983.
> New research digs deeper into the question of why, despite the extraordinary productivity of US agriculture, US farm operators are systematically losing money. ...
> “People who work in the agricultural space already know that it is difficult to make a living as a farmer,” Burchfield says. ...
> The US Department of Agriculture reported in 2020 that the average funds generated by farm operators to meet living expenses and debt obligations, after accounting for production expenses, have been negative for nine out of the last 10 years. In 2017, for instance, median net-cash farm income was $1,035 in the red per farm household in the country.
Life happens, but in theory debt just pushes the profitability into the future (i.e. when you retire). A farm struggling with cashflow and its operators living in poverty doesn't mean they don't have multi-millions in assets available to sell at some point. That is why one accepts the debt, after all.
Farming isn't much different than the tech landscape. You can build a small business that reaches profitability immediately, but your upside will be severely limited, or you can go full unicorn and make nothing for years and then (hopefully) hit the jackpot when you sell.
It is faulty to think that, generally, farming is a business for making a living. That's not why, generally, someone farms. Generally, they are there to build wealth, which some people find to be more important than having a decent yearly income and without anything to show for it at the end of the day. Different tradeoffs, is all.
> Running a first-class restaurant is risky enough; running a farm is even riskier.
As it happens, I also operate a restaurant. There is no way farming is more risky. In an individual year it may be, but you go into farming knowing that the business ebbs and flows in a reasonably predictable manner and design your operation around that. The restaurant industry, on the other hand, has no rhyme nor reason. Something as simple as hiring the wrong server can start to really tear your business apart and harm you even long after the employee is gone. If you make a similar mistake on the farm, nobody cares, and next year gives you a fresh start.
>Small family-owned farms accounted for 19% of the value of all agricultural products sold in 2017