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Informa Economics

Farms of the Future: Expected Structural Changes and
Implications for the U.S. Agriculture-Food Value Chain

A Multi-Client Study
February 2014

INTRODUCTION

This will be the fourth in a series of studies done by Informa concerning structural trends in U.S. agriculture.  Its purpose is to help clients assimilate the mass of information developed by the semi-decennial census of agriculture, and to describe and evaluate the main trends affecting the sector.  This study will examine in detail the dynamics taking place on the farm and will provide specific outlooks and strategies for various stakeholder groups in both the private and public sectors. 

For the past 6 to 7 years, average farm prices have been at record or near record levels.  But major crop prices are expected to decline sharply in the short term and level out in the long term.  At the same time USDA forecasts production costs to remain at or increase from current levels.  As a result the crop sector is expected to face a period of tighter margins and farmers will need to become more efficient producers. The tighter margin environment may push less efficient producers out and increase on-going consolidation.  Larger farming operations adopt technology quicker and this adoption will increase with greater consolidation.

Today’s farm supply/service sector faces unique challenges that are redefining the industry and the way it operates.  Big Data has the potential to be a game changer for this sector.  But there are a number of challenges that need to be overcome. 

Against the above scenario, the farm sector continues to become more concentrated and commercial operations, many on a very large scale, are becoming more dominant. The trend toward increased size and scale is proceeding rapidly. This trend toward larger-scale, more concentrated operations is seen in farms of all types, especially livestock, poultry and high-value product production.

At the same time environmental concerns are a major issue. If there is greater enforcement of environmental regulations, what impact will this have on the increasing concentration of the livestock and poultry industries?

At the other end of the scale, some small farmers are becoming more specialized such as in organic production or other niche products sometimes supplemented by greater non-farm income. This evolving economic structure begs several important questions about the restructuring itself, as well as, about implications for the full agriculture-food value chain today and into the future. As the sector trends toward both the larger and the smaller, more specialized players, there is a “push and pull” on the mid-sized player to either "get big” or “get out of the business,” which of course exacerbates the consolidation process.

This study will address the rates and magnitudes of change taking place in the evolution of US production agriculture. Moreover, the study will project the alternative structures to be established over the next decade. These analyses will serve as a foundation for policymakers (both state and local and federal) as well as rural planners and farm-related businesses. In addition, the study will describe and quantify (for each major segment) the impact of the evolving structures on each segment of the agriculture-food value chain. In the final analysis, the study will prescribe strategies for “aggressive” business development or protections as the changing structures dictate new economic opportunities and/or problems for the various sectoral participants.

 

Figure 1. US Farm Consolidation Increases as Farms Get Larger

 

Study Table of Contents

Study details, complete prospectus and enrollment form


To obtain additional information or to enroll, please contact:

 

 

Dr. Bruce Scherr
Chairman of the Board and CEO

Informa Economics
775 Ridge Lake Blvd., Suite 400
Memphis, TN 38120
Phone: 901.766.4511
Fax: 901.766.4471

Email: bruce.scherr@informaecon.com

Mr. Tom Scott
President and COO

Informa Economics
775 Ridge Lake Blvd., Suite 400
Memphis, TN 38120
Phone: 901.766.4586
Fax: 901.766.8158

Email: tom.scott@informaecon.com

Mr. Joe Somers
Vice President
Informa Economics

6862 Elm Street
McLean, VA 22101
Phone: 703.891.6307
Fax: 703.893.1065

Email: joe.somers@informaecon.com





 


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