October 15, 2004 | By: Aimee Heald-Nielson
LEXINGTON, Ky.

With about 86,500 farms, Kentucky ranks fourth in the United States in farm numbers. These numbers are from the latest agricultural census which ranks Texas, Iowa and Missouri ahead of the commonwealth.

“When they count farms in the ag census, the definition they use is ‘any place from which $1,000 or more of agricultural products were produced or sold, or normally would have been sold’ during the census year,” said Craig Infanger, Extension agricultural economist for the University of Kentucky College of Agriculture. “This is the same definition that has been used for almost 30 years.”

Infanger said the definition actually falls short of defining farms in a functional sense. He said a more reasonable approach might involve looking for agricultural enterprises where land, labor, capital and management are used to produce a positive financial return.

“In this functional view, farms large enough to produce family income above the poverty level might be considered commercial farms,” he said. “At the current time, the official federal poverty level for a family of four is $18,400.”

The minimum size of a “commercial farm” in Kentucky that could produce income above the poverty line is a farm that generates sales of about $100,000 or more, Infanger said.

“If you can keep production expenses to 80 percent or less of total sales, you are in the ‘green zone’ of financial viability,” he said. “So a farm bringing in more than $100,000 in sales should generate enough income to be above the poverty level if the funds are managed reasonably well.”

The latest census that showed Kentucky having 86,500 farms however, reports only 5,119 of those generate total sales of $100,000 or more per year.

“Under normal circumstances, these 5,000+ farms could be considered Kentucky’s core commercial farms,” Infanger said. “In fact those farms account for 73 percent of total agriculture sales and they have an average of 774 acres. What happens with farm programs, trade policy and interest rates is very important to these farms.”

Infanger emphasized that many operators of smaller farms still consider themselves farmers and they are very important to the overall agricultural economy. The U. S. Department of Agriculture uses terms like “limited resource farm,” or “residential lifestyle farms” to describe the bulk of Kentucky farms. Rural economic policy is especially important to these farms because most are dependent on off-farm income.


Contact: 

Writer: Aimee D. Nielson 859-257-4736, ext. 267

Source: Craig Infanger 859-257-7274