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Agricultural Economics
Staff Paper No. 77-73
CHARACTERISTICS OF MICHIGAN'S SMALL FARMS
Ralph E. Hepp
Professor and Extension Specialist
Department of Agricultural Economics
Michigan State University
The contributions by small farms to Michigan's agriculture was documented
in Research Report 296, titled "Description and Analysis of Michigan Small
Farms" published by the Michigan State University Agricultural Experiment Station.
The report showed that over 85 percent of the state's farms are small and one-
third of all agricultural sales originate from small farms. Data was given on
the amount of crop and livestock production from small farms and small farm
productivity comparisons given with larger commercial operations. The research
report provided family characteristics, income situation, farm goals and capital
position for families living on small farms. Implications for extension and
research programs were extracted from the analysis.
Data sources for the previous research were interviews with a stratified
random sample of small farm operators and 1969 Census of Agriculture. This paper
supplements and updates information available on small farms from the 1974 Census
of Agriculture.
Number of Farms
The state continues to have a large number of small farms. For farming
operations, 85 percent or 54,437 farms are small while 6,848 farms or 11 percent
are medium size and four percent or 2,809 farms are large. Farm size is based
upon sales with small farms defined as those farms grossing under $40,000,
medium size farms defined as those grossing between $40,000 and $100,000, and
large farms defined as those grossing over $100,000.
The 1974 Census of Agriculture divides farms into agricultural operations
grossing less than $1,000 and farming operations grossing $1,000 and more.
Detailed farm information is provided for farming operations. The number and
percent of Michigan farms by occupation of the operator, age of the operator and
farm size is shown in Figure 1. Farm operators in the 1974 Census of Agricul-
ture were asked to indicate whether their principal occupation was farming or
an occupation other than farming. The occupation was defined as farming where
the operator spends 50 percent or more of his work time on the farm and a non-
farm occupation if the operator spends less than 50 percent of his work time
on the farm. Although most part-time farmers operate small farms (98%), 415
farmers operate medium sized farms and 85 operate large farms.
Over two-thirds of the full-time farmers operate small farms, 23 percent
medium sized farms and 9 percent large farms. Part-retired farmers usually
operate small farms, are collecting social security and are disinvesting capital
in their farming operations.
Land in Farms
Contrary to popular belief, the large farm operations do not control agricul-
tural land use, but the control and use is by small farm operators who farm almost
two-thirds of the land (Figure 2). Likewise, small farm operators rent a large
share of the 2.9 million acres of rented land in Michigan (Figure 3). Small
farms have a smaller land base or average 123 acres per farm versus average farm
size of 342 acres for medium sized farms and 631 acres for large farms.
Eighty percent of the small farms have less than 100 harvested crop acres
while 80 percent of the medium sized farms have 100 to 500 harvested crop acres.
Large farms also have a larger cropping program with 40 percent of the large
farms cropping over 500 acres. Table 1 shows the number and percent of farms
by acres harvested and farm size.
Farms by Type of Organization
The sole proprietorship form of business organization is typical on all
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farm sizes (Table 2). Partnerships and corporations, although limited in number,
are common business organization types for medium and large farms.
Farm Operators by Age
Operators of small farms tend to be older than operators of medium and large
farms (Table 3). Ninety-five percent of the farm operators 65 years of age or
over operate small farms and 90 percent of the farm operators under 25 years of
age operate small farms.
Farms by Type
The 1974 Census of Agriculture classifies farms into a standard industrial
classification. The classification systems is based upon gross sales of like
commodities. Over half the small farms are cash grain and field crop farms and
one-third livestock and dairy farms (Table 4). A larger percent of the medium
and large farms are livestock, dairy and poultry farms.
Crop Production
Table 5 shows the acres of harvested crops for the major Michigan crops and
the percent of harvested crops by farm size. Small farms produce over 50 per-
cent of the hay, soybeans and wheat and almost half of the corn for grain.
Harvested fruit and vegetable acres are more commonly found on larger farms.
Crop yields on small farms are consistently lower than larger farms for
the major crops grown in Michigan (Table 6). Comparing yields between small
and large farms, large farms have 15 percent higher corn yields, 19 percent
higher wheat yields, 25 percent higher soybean yields and 37 percent higher hay
yields.
Figure 1. Number and percent of Michigan farms by
farm size; 1974 Census of Agriculture.
occupation of the operator, age of the operator and
: 68,952
Agricultural Operations
Number: 4,858
Percent: 7
Occupation Other Than Farming
Farming Operations
Number: 64,094
Percent: 93
Occupation Farming
Number: 29,164 Number: 34,438
Percent:. 46 Percent:, 54
Number: 2,320 Number: 26,844
Percent: 8 Percent:. 92
Number: 8,132 Number: 26,306
Percent: 24 Percent: 76
Number: 26,344
Percent: 98
Number: 415
Percent: 1.5
Number: 85
Percent: .5
Number: 18,011
Percent: 68
Number: 5,931
Percent: 23
Number: 2,364
Percent: 9
SMALL 62%
LARGE
16%
MEDIUM
22%
FIGURE 2, PERCENT OF LAND IN FARMS BY FARM SIZE
SMALL 44%
LARGE 25%
'o
MEDIUM 31%
FIGURE 3. PERCENT OF RENTED LAND BY FARM SIZE
TABLE 1, NUMBER AND PERCENT OF FARMS BY ACRES HARVESTED AND FARM SIZE
FARM SIZE
ACRES HARVESTED SMALL MEDIUM LARGE
NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
1 TO 49 27,517 54 357 5 133 5
50 TO 99 13,282 26 568 8 94 3
100 TO 199 8,235 16 1,822 27 253 9
200 TO 499 2,297 4 3.606 53 1,171 43
500 TO 1,000 23 -- 387 6 873 32
1,000 AND OVER 2 -- 5 -- 211 8
TABLE 2, NUMBER AND
FARM SIZE
PERCENT OF FARMS BY TYPE OF ORGANIZATION AND
FARM SIZE
TYPE OF ORGANIZATION
SMALL*
NUMBER PERCENT
MEDIUM LARGE
NUMBER PERCENT NUMBER PERCENT
SOLE PROPRIETORSHIP 35,055
PARTNERSHIP
CORPORATION
$2,500 SALES OR MORE.
1,792
5,738
1,008
110
1,834
752
*INFORMATION ON TYPE OF ORGANIZATION AVAILABLE ONLY ON SMALL FARMS WITH
220
TABLE 3, PERCENT OF FARMS BY AGE OF OPERATOR AND FARM SIZE
FARM SIZE
AGE OF OPERATORS
SMALL
MEDIUM
LARGE
PERCENT OF FARMS
UNDER 25 YEARS
25 TO 44 YEARS
45 TO 64 YEARS
65 YEARS OR OVER
6 5
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TABLE 4. PERCENT OF FARMS BY TYPE AND FARM SIZE
FARM SIZE
TYPE OF FARM
CASH GRAIN AND FIELD CROPS
LIVESTOCK
DAIRY
FRUIT AND VEGETABLE
GENERAL FARMS
NOT CLASSIFIED
POULTRY
SMALL *
LARGE
MEDIUM
PERCENT
30
9
40
14
*INFORMATION ON STANDARD INDUSTRIAL CLASSIFICATION AVAILABLE ONLY ON
SMALL FARMS WITH $2,500 SALES OR MORE.
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TABLE 5. ACRES HARVESTED AND PERCENT OF HARVESTED CROPS BY FARM SIZE
FARM SIZE
CROPS HARVESTED ACRES SMALL MEDIUM LARGE
HARVESTED
PERCENT
HAY 1.,359,191 64 24 12
SOYBEANS 507,683 64 23 13
WHEAT 810,197 59 24 17
CORN FOR GRAIN 1,895,841 47 28 25
LAND IN ORCHARDS 167,747 38 29 34
VEGETABLES 106,952 30 21 49
TABLE 6,
CROP YIELDS BY FARM SIZE
CROP
SMALL
FARM SIZE
MEDIUM
BUSHELS PER ACRE
CORN FOR GRAIN
WHEAT
SOYBEANS
TONS PER ACRE
2,49
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LARGE
HAY
1.96
2.69
-13-
Livestock Production
Small farms are important in animal production especially beef cows and
sheep and lambs (Table 7). Hogs are also common on small farms. Dairy and
poultry are commonly found on medium size or large farms. Cattle fattening on
grain and concentrates, farms with $2,500 sales or more, number 259,659 head.
Large farms account for 61 percent of these cattle, medium sized farms show
16 percent and small farms 23 percent.
Enterprise Size
Table 8 shows the average size of enterprise for those farms producing the
products by farm size. As expected,small farms have small enterprises.
Income Situation
Only partial information is available from Census on the per farm income
situation (Table 9). Net farm income is the residual cash return for the
operator's labor, capital purchases and debt principal payments. Production
expenses do not include depreciation and other overhead costs, therefore only
limited conclusions can be drawn from the data. As expected, net cash income is
lower on small farms and off-farm income higher than on medium or large farms.
Although small farms make up 85 percent of the farm numbers, they only sell
one-third of the agricultural products.
Capital and Debt Situation
Complete information on capital assets and debts is not available and a
per farm net worth statement cannot be presented. Selected per farm data on
capital assets and debts is presented in Table 10 and shows that small farm
operators have fewer assets and debts than their larger neighbors.
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TABLE 7, PERCENT OF ANIMAL PRODUCTION BY FARM SIZE
INVENTORY NUMBERS FARM SIZE
OF VARIOUS ANIMALS SMALL MEDIUM LARGE
PERCENT
SHEEP AND LAMBS 84 11 5
BEEF COWS 82 10 7
HOGS AND PIGS 42 26 32
DAIRY COWS 36 40 24
LAYING HENS 9 16 75
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TABLE 8. AVERAGE SIZE OF ENTERPRISES FOR FARMS PRODUCING THE ENTER-
PRISE BY FARM SIZE
ENTERPRISE
SMALL
BEEF COWS, INVENTORY
MILK COWS, INVENTORY
HOGS AND PIGS, SOLD
LITTERS FARROWED
SHEEP AND LAMBS, SOLD
CORN
WHEAT
SOYBEANS
HAY
VEGETABLES
LAND IN ORCHARDS
FARM SIZE
MEDIUM
HEAD
33
51
293
50
110
ACRES
127
45
90
80
41
72
LARGE
64
108
869
156
198
298
105
143
121
130
179
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TABLE 9.
PERCENT OF FARM SALES BY FARM SIZE AND AVERAGE FARM INCOME
AND EXPENSES BY FARM SIZE
INCOME AND EXPENSES
CATEGORY
SMALL
FARM SIZE
MEDIUM
MARKET VALUE OF ALL AGRI-
CULTURAL PRODUCTS: PERCENT
AVERAGE PER FARM:
SALES OF AGRICULTURAL PRODUCTS
PRODUCTION EXPENSES
NET CASH INCOME
FARM RELATED INCOME
FARM RELATED EXPENSES
NET CASH INCOME
FAMILY OFF-FARM INCOME
$8,889
6,745
$2,144
$ 303
112
$ 191
$7,577*
$61,444
41,802
$19,642
$ 975
238
$ 737
$ 3,646
$207,774
156,760
$ 51,014
$ 1,973
377
$ 1,596
$ 3,423
*INFORMATION ON OFF-FARM INCOME AVAILABLE
$2,500 SALES OR MORE,
ONLY ON SMALL
FARMS WITH
LARGE
TABLE 10. MARKET VALUE OF SELECTED CAPITAL ITEMS AND DEBTS BY FARM SIZE
FARM SIZE
SMALL*
MEDIUM
PER FARM
LARGE
LAND AND BUILDINGS
MACHINERY AND EQUIPMENT
TOTAL
DEBTS
FARM DEBT
DIFFERENCE
$75,378
18,268
$93.,646
$ 7,064
$86,582
$198,045
44,690
$242,735
$ 29,417
$213,318
$400,392
78,052
$478,444
$ 89,631
$388,813
OR MORE.
ASSETS
*INFORMATION ON DEBTS ARE AVAILABLE ONLY FOR FARMS WITH $2,500 SALES
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