Small farms declining

Farm numbers across the U.S. are dwindling and the mountain states are no exception.

Our country lost 7% of farms from 2017-2022, and all of the mountain states were above the national average. As a farmer in the region, I understand the stress of this profession, and if our country continues on its current trajectory our region's agricultural future looks bleak – more consolidation and less food security.

From 2017-2022, Idaho, Montana, Washington and Wyoming all experienced a decrease in the total number of farms. Wyoming saw the largest decrease at 12% of farms, totaling 1,394 farms in the state that chose to end operations. Montana and Washington had the second largest decreases of 10%, a raw total of 2,782 and 3,717 farms, respectively. Idaho trailed behind at 8% with 2,119 farms ending operations.

The decrease comes despite the highest net farm income recorded during this time frame. Why, during a period of historical profits were farms ending operations?

Look at the breakdown of farm number changes by income. According to census data in 2022 and 2017, farm losses were highest in the low-income categories. The smaller farms are the ones disappearing at upwards of 40% and close to 50% in the case of Idaho with incomes between $200,000 to $499,999.

Farm losses are huge for operations under $500,000 in total sales. The trend reverses for farms with revenue above $500,000. Almost all income brackets above $500,000 saw an increase in farming operations (except one income bracket in Montana). With the largest increases in the top income category of $10,000,000 or more.

The loss of farms isn't driven by only one issue.

Regulations, input costs, pandemic changes, trade disruptions, aging operators and agricultural land development are all pushing out farms. The smallest farms face the greatest challenges.

Everyone should be concerned about the loss of farms. The majority of our food production is grown by the largest operations. So, volume isn't the concern, but security is.

Look at the result of the COVID-19 shutdowns.

Many large operations had plant and processing shutdowns from outbreaks among employees, and grocery store shelves went empty.

Having many producers involved in food production insulates consumers from supply disruptions. One producer will likely experience operational challenges throughout the growing season be it weather, trade, policy or labor challenges.

If only a few producers are present in the market supply, disruptions are inevitable. However, if many producers are actively engaged in the industry, it insulates the end consumer from supply disruptions.

Challenges are increasing for farmers as this last year was expected to be one of the largest declines in net cash farm income in history, the largest in nominal terms and third largest adjusted to inflation.

Policies in the mountain states need to encourage agriculture. Efforts should be made to ease the burdens of remaining in the agricultural industry for small producers like decreasing regulatory burdens, encouraging agricultural land to remain in production at reasonable rental rates, improving labor supply restrictions, and encouraging trade agreements benefiting agricultural products.

Before policies are adopted it is worth questioning what the result will be for small producers.

- Madilynne Clark is the senior policy analyst at Washington Policy Center. Email her at [email protected].