Agriculture Crop Production
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Industry Overview
The US agriculture sector includes 1 million crop farms covering 300 million acres, with combined annual revenue of $100 billion. The industry includes a few large growers such as Dole Food, but the vast majority of farms are privately owned with annual revenue under $250,000. About 12,000 farms have annual revenue over $1 million, of which only 1,500 have revenue of $5 million or more.
Competitive Landscape
Demand for crops depends on the growth of the US population and the condition of export markets. Crop yield is a significant factor in profitability. Small farms can compete effectively if they produce a specialty crop or are located near a favorable market. Large economies of scale can occur, depending on the type of crop. Large farms with annual revenue over $1 million produce over 40 percent of total industry revenue. Many small farms remain in operation only because their owners have additional sources of income.
Products, Operations & Technology
Major crops are corn (about $19 billion annually); soybeans ($16 billion); and fruits and nuts ($13 billion); followed by vegetables, wheat, and cotton. Most farmers concentrate on one or a few crops, depending on local soil, weather, and water conditions. Although quality can vary significantly, most crops are considered commodities.
Farming operations consist of soil preparation; planting; application of fertilizer, pesticides, and water; and harvesting. Farms may have several harvests during the year involving different crops. For example, soybeans may be planted in a field where wheat has just been harvested.
Most farms are highly mechanized for activities like tilling, planting, and applying fertilizer. Harvesting is often done using specialized machinery, but also may require large amounts of manual labor, depending on the crop. Farmers closely monitor crop yield per acre, which is affected by weather, fertilizer, and pesticide applications, and proper crop and seed selection. Yields can fluctuate yearly. For many crops, irrigation is necessary; about 20 percent of all cropland is irrigated.
To increase leverage when selling products or buying supplies, many farms are members of cooperatives. There are about 1,500 marketing cooperatives whose major activity is selling the products of their members, and 1,300 supply cooperatives. Cooperatives sell over 40 percent of all agricultural products.