The Determinants of Beginning Farm Success

Abstract

Using linked data from multiple years of the U.S. Census of Agriculture, this study identifies farm and operator characteristics associated with beginning farm survival, growth, and success. Success is defined as continuing in business for 5 years without a decline in farm real estate asset value. The results indicate which types of beginning farms and farmers are likely to survive and grow—information which could be useful in targeting program resources. By identifying policy-amenable variables that correlate with both farm survival and business expansion, the results also suggest possible mechanisms for increasing the success of beginning farms.

Opportunities to support beginning farmers and ranchers in the 2023 Farm Bill

“…Commodity specialization was also an important determinant of farm performance. Holding all other characteristics constant, farms that produce "grains, oilseeds, dry beans, or dry peas" had the highest probability of success (Key, 2022b). While there could be numerous factors, including differences in pest, climate and market conditions that cause variation in farm performance across commodity groups, it is plausible that insurance availability plays a role.…”