Despite vastly outnumbering large farms, small farms produce only a tiny fraction of Pennsylvania's total agricultural output.
However, these small operations support billions of dollars’ worth of economic activity while helping to keep land in farming and adding to the diversity of the state's agriculture, according to researchers in Penn State's College of Agricultural Sciences.
The researchers, affiliated with the college's Center for Economic and Community Development, analyzed data from USDA and summarized their findings in two reports: "Not Inconsequential: The Economic Effect of Small Farms in Pennsylvania, 2017" and "Understanding the Quiet Majority: Small Farms in Pennsylvania, 2017."
The reports are part of a series, "Understanding Pennsylvania Agriculture: 2017 Update," that explores various facets of USDA's 2017 Census of Agriculture. The ag census is compiled every five years, and the 2017 census results were released in 2019.
"Small farms often are overlooked or even dismissed when people talk about agriculture in Pennsylvania," said Timothy Kelsey, professor of agricultural economics and co-director of the Center for Economic and Community Development. "Although they contribute relatively little to total agricultural production in the state, small farms far outnumber larger farms. Narrowly focusing on the value of their agricultural sales misses the important roles they play in the commonwealth."
USDA defines small farms as those with less than $250,000 in annual agricultural product sales, a category that applied to 88% of Pennsylvania farms in 2017. Those farms' share of total agricultural product sales in 2017 was about 19%.
Some 27,000 farms in the state, or about 51% of all farms, had sales of less than $10,000, collectively accounting for only 0.8% of total agricultural sales that year.
By contrast, the 3,087 operations with more than $500,000 in annual sales represented just 5.8% of Pennsylvania farms but claimed almost two-thirds of agricultural sales.
'Important Stewards of Farmland'
Kelsey said that most small farms in Pennsylvania lose money, largely because many are operated for lifestyle or recreational purposes, or to supplement a family's food supply — not to provide the bulk of household income.
Despite their relatively low output, Kelsey said, small farms still made important economic contributions through their purchases, spending about $1.5 billion on production costs and generating about $2.2 billion in direct, indirect and induced economic activity in 2017.
"Small farms purchase a significant amount of supplies and services from the local farm-related businesses that larger farms also rely on, and thus help those businesses remain in operation," he said. "Many small farms also purchase agricultural products, such as hay or other feeds, from nearby larger farms, which helps to support those larger farms financially."
The benefits of small farms go beyond economic considerations, said report co-author Emily Ciganik, undergraduate research associate in the Center for Economic and Community Development.
"Small farms are important stewards of farmland in Pennsylvania, keeping land open and providing environmental benefits," she said. "In addition, small-farm owners can be important allies with larger farms in advocating for local farm-friendly policies, providing a stronger voice for the agricultural community."
Besides differences in sales volume, small and large farms differ in the types of agricultural products they produce, the reports indicate.
"Small farms are much more likely to have their primary venture revolve around the production of hay, beef cattle, and aquaculture and other animals, which may include bees, horses, rabbits and other species," said undergraduate research associate and co-author Jessica Shi. "On the other hand, a much greater percentage of larger farms are involved in dairy and poultry production as their primary focus."
Small-farm operators also tend to skew older than those who run large farms, said co-author Alyssa Gurklis, project coordinator for the Center for Economic and Community Development.
"The average age of operators of farms selling less than $1,000 of agricultural products a year was 59.1 in 2017, compared to an average age of only 49.6 years among operators of farms selling more than $1 million," Gurklis said.
Compared to large-scale farmers, operators of small farms were more likely to have off-farm employment and spend more days, on average, working off the farm than those overseeing larger operations, she said.