Understanding U.S. Farm Exits

July 14, 2006 - The rate, at which U.S. farms go out of business, or exit farming, is about 9 percent or 10 percent per year, which is comparable to exit rates for non-farm small businesses in the United States. This information is drawn from a recently published Economic Research Service report.

It further stated that U.S. farms have not disappeared, however, because the rate of entry into farming is nearly as high as the exit rate. The relatively stable farm count since the 1970s reflects exits and entries essentially in balance. The probability of exit is higher for recent entrants than for older, more established farms. Exit probabilities differ by specialization, with beef farms less likely to exit than cash grain or hog farms.

Access to the full report is located at: http://www.ers.usda.gov/publications/err21/.

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