Why Are Family Farms in Trouble?
In 2012, the USDA forecast that most (70 percent) family farms would transfer hands over the next 20 years. What are farmers doing now to ensure their farms' survival?
Agriculture was once a cornerstone of the American way of life. Farmers helped build the country, and most of us depended on their products for the food we eat. But times have changed. Americans now eat fast food one to three times a week on average. Between 1998 and 2023, our reliance on imported food has tripled.
Because farming is so central to our nation’s identity—and its idea of itself—this future can feel fraught. In 2012, the USDA forecast that most (70 percent) family farms would transfer hands over the next 20 years.
How will that transition to a new generation of farmers happen? Will family farms as we know and love them survive, and how do the ones that are thriving now do it? We looked at a range of agricultural models, and spoke to farmers who are in the middle of the process of transition to find out more.
The current state of family farms
After peaking in 1935, when there were 6.8 million family farms, the small family farm is increasingly imperiled. Today, there are around 1.89 million US farms, down seven percent from 2.04 million in 2017. The acreage is going down, too: There are about 879 million acres being farmed, down slightly from the 900 million acres growing crops or feeding animals in 2017.
That’s the familiar bad news, a perennial, gloomy backbeat to most stories on farming in America today. But there are bright spots.
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There are fewer farmers and less farmland, but due to consolidation, there has been an increase in income for the remaining farmers. Gross cash farm income (GCFI) is calculated by tallying a farm’s earnings before expenses, and it includes both income from sales and payments from government farm programs.
Adjusted for inflation, in 2024, the GCFI is forecast to be $577.1 billion, up from $422.7 billion in 2004. Family farms still account for the vast majority (97 percent) of all farming operations, and small family farms (with less than $350,000 in GCFI) make up 88 percent of all domestic farms.
A dairy farm invests in new technology
Wright’s Dairy Farm & Bakery has been producing fresh milk directly to the public since 1914. But the business today, which employs dozens of local bakers, dairy plant and farm workers, would be almost unrecognizable to its customers a century ago.
Cathryn Kennedy, food operations manager at the North Smithfield, R.I. farm, says she had zero plans to join the family farm—and didn’t face pressure or expectation from her family. That meant that when she joined in 2015, she was able to see the farm with fresh eyes.
Kennedy has led the charge into the wholesale market after noting a decline in retail store sales and an overall trend downward in milk consumption nationwide. In 2017, she helped launch Wright’s wholesale delivery department with three off-site sales locations.
“Adding that sales channel and making it easier for people to buy our products helped increase milk sales amid declining consumption,” says Kennedy. “I’ve also built out a brand for scooped ice cream, which we were only selling pre-packed in our on-site retail store.”
In 2019, Kennedy had a seasonal ice cream trailer installed on the farm, then added an additional one at a separate location. The demand was so intense, Wright’s opened a year-round location in Providence, where they make and sell ice cream and other packaged dairy products.
These innovations have required a serious capital outlay, including three different vehicles ($165,000), two ice cream trailers ($100,000), a digital platform to manage orders ($5,000 annually) and two full-time drivers ($100,000 annually). But since 2017, when it began putting changes into effect, Wright’s has generated $8.5 million in sales, with $200,000 per season coming from the seasonal ice cream trailers.
A cattle ranch educates customers
Eagle Rock Ranch was founded in 1868 by Louis Holst as a working cattle and hay operation. Now one of the few remaining cattle ranches in South Park, CO, the farm has stayed successful by getting creative and meeting customers where they are.
Erin Michalski, who runs Eagle Ranch Mercantile in Fairplay for her family farm and helps spearhead sales more broadly, says they’ve had to change their approach to finding and keeping customers amid a boom in the population of Denver and Colorado Springs, both of which are about a 90-minute drive from the ranch.
“We need them to buy our beef, and they in turn need us to grow their food,” says Michalski, explaining that Eagle Ranch is leaning into the symbiotic relationship by offering ranch and eco-tours of the land to the public.
“We want to educate people about the value of agriculture and increase awareness of how food is raised and grown,” she says. “We want people to see firsthand the care and attention that goes into raising our cattle and growing our hay, while also learning what it means to be stewards of the land.”
Eagle Ranch made a series of changes to its sales approach during COVID, when she realized that people want to know where their food comes from.
“They also didn’t necessarily want to go to a store to make a purchase,” says Michalski. “We began selling our beef direct-to-consumer and at our store in Fairplay.”
Drawing the curtain back on its operations has allowed Eagle Ranch to thrive, despite dramatic increases in everything from the cost of feed for its cattle, to fuel for itstrucks and costs of input. Eagle Ranch has also diversified its revenue stream, by selling not just hay and beef but also an assortment of home and kitchen merchandise at itsMercantile store, and leasing private-water fishing rights on its land.
Overall, these changes have increased the farm’s profits by 30 percent.
A winery raises prices to reflect value
The Pedroncelli family has been growing and vinifying wine for almost 100 years in Sonoma’s Dry Creek Valley. When John Pedroncelli, Sr. founded Pedroncelli Winery in 1927, his primary goal was making exceptional wine, and that hasn’t changed.
But the way that wine is sold and presented has transformed drastically through Prohibition, two world wars and the pandemic. When Julie Pedroncelli St. John took the helm as president in 2022, she knew it was time to make changes.
“We wanted the value of our brand to be reflected in the price, and we also wanted to repackage our wines,” St. John explains. “Together, we knew this would signal our premium status to a different consumer, and we also knew the modest changes we made would not alienate our loyal customers.”
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Prices went up on key national releases, from the high teens to the low to mid-twenties.
The winery also invested in an upgrade to the tasting room and hospitality area, replanted a few key vineyards and gave the winemaking team new and better tools to play with.
“The hospitality spaces had been built in 1986, and they hadn’t been updated since,” says St. John. “We invested about $1.5 million in improvements, and the bulk went to updating the space, but we also want to focus more on small lot wines, which meant upgrades in the cellar, including barrels. And we replanted five acres.”
Each acre costs about $50,000 to replant, and because it takes about four years for a new vineyard to bear fruit that can be vinified and bottled, it started small, with five acres. All told, there are 100 acres, and while the winery doesn’t want to replant its entire vineyard, it will chip away at small replantings as it goes.
Sales of wine overall have been dismal in recent years, but Pedroncelli bucks the trend, with a sales boost of 25.5 percent year-over-year.
Farmers will always be foundational to the American story, and hopefully, our diets. But it’s clear that how that story gets told and sold may need to evolve with changing market needs.
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