Economic Profile of Louisiana Agriculture and Farming Households

Linda F. Benedict, Mishra, Ashok, Khanal, Aditya

Table 1. Time allocation of farm households: a comparison between Louisiana, Rest of Delta and the United States. (Click on image to view larger version.)

Figure 2. Louisiana farms earn less from farming than farms in the rest of the Delta and the United States. (Click on image to view larger version.)

Figure 3. A higher percentage of Louisiana farmers have completed high school compared to farmers in the rest of the Delta region and the United States. (Click on image to view larger version.)

Figure 4. Louisiana farm operators tend to be older than farm operators in the Delta region andthe rest of the United States. (Click on image to view larger version.)

Figure 5. Louisiana farms are more diverse than farms in the rest of the Delta region andthe United States. (Click on image to view larger version.)

Figure 1. Louisiana farmers rent more land than farmers in the rest of the Delta (Mississippi and Arkansas) and the rest of the United States, excluding the Delta region.The numbers are averages.

Ashok K. Mishra and Aditya Khanal

The agricultural sector in Louisiana differs in several ways from the rest of the United States and even the rest of the Delta region. Louisiana shows a marked difference in socioeconomic variables compared to other regions, and this appears to be due to a variety of factors. The following analysis of Louisiana agriculture is based on the 2010 Agricultural Resource Management Survey (ARMS) conducted by the National Agricultural Statistics Service (NASS) and Economic Research Service (ERS). Attributes of Louisiana agriculture are compared with agriculture in the Delta and the rest of the United States. This analysis may aid policy makers in evaluating and designing policies that will enhance the wellbeing of farm households; extension agents in targeting gaps in their educational programs that can be addressed; and farm operators as they look to the future.

Louisiana is home to about 30,000 farms. These farms average around 370 acres in size. Farms grossing more than $250,000 annually constitute less than four percent of the total. Of the 2 million farms in the contiguous United States, and specifically the 90,000 farms in the Delta, however, the share of farms grossing over $250,000 is significantly higher, with 12 percent in the Delta, and 11 percent nationwide. In addition, the majority (58 percent) of Louisiana farm land is operated by owners of the land. The tenancy of farms in Louisiana is three times that of the Delta region and almost double the national average. This speaks to the greater prevalence of rural culture in the state. It may also indicate that farm operations in Louisiana are at a smaller scale; therefore, the acreage may not be managed as expertly or exploited as completely as those operations grossing more than $250,000 annually.

Farm operators in Louisiana are some of the poorest in the nation on average. The average net worth of farms in Louisiana comes in at around $520,000, which is 40 percent lower than the national average of nearly $900,000. The Delta region does not do much better, though it still ranks higher than Louisiana with an average net worth of about $604,000. Even more telling, however, is a comparison of average farm income. Louisiana farms make about $12,500 per year on average, whereas farms in the Delta bring in more than $22,000, and farms across the United States average more than $34,000, which is nearly triple the income of the average Louisiana farmer. The Midwest is likely the driver behind this wide discrepancy with its high volume of valuable commodities like corn and soybeans.

Louisiana receives more government payments per farm operator than the Delta region or the rest of the nation. This is due in large part to the higher percentage of rice farms, cotton operations, and farmland eligible for Conservation Reserve Program payments. Louisiana farm operators on average receive just under $5,000 per year, while those in the Delta receive about $4,800, and farmers nationwide average a payment of only $4,200.
Farm Household Attributes

Educational attainment of farm operators tends to be a telling factor in the prediction of professional and financial success. In Louisiana, this appears to hold true. A substantially greater number of farm operators in the state have only a high school diploma, as compared with the rest of the United States and the Delta region. Out of all farm operators in Louisiana, 85 percent do not hold a college degree. In the Delta and the rest of the United States, around a quarter of farmer operators have graduated from a four-year university, and an equal number have attained some level of college education.

Spouses of farm operators in the Delta are by far the best educated, compared to Louisiana and the rest of the nation, with more than 50 percent having some college or a college degree. This is the only area in this analysis in which the Delta region outperformed both Louisiana and the United States overall.

In addition to having less formal education, Louisiana farm operators are older on average than those in the rest of the nation. Almost 40 percent are 65 years old or older. The Delta region has an older demographic of farm operators as well, with its highest share being between 55 and 64 years old. Nationwide, however, fewer than 30 percent of all farm operators fall into that age bracket and even fewer (about 27 percent) are 65 or older.

Time Allocation
Nationwide, approximately 40 percent of farm operators work off the farm in some measure. A similar share of their spouses work off-farm as well (38 percent). In Louisiana, the percentages are not too far off the national average, with 42 percent of operators and 34 percent of their spouses reporting off-farm labor. The Delta region has a higher share of off-farm labor overall and equal levels for spouse and operator (43 percent for each). This may be due to several factors, including educational attainment by farm operators and spouses and lack of off-farm job opportunities. Of the farm operators also employed elsewhere, the vast majority work full-time (over 35 hours): 74 percent in the United States as a whole, 83 percent in Louisiana, and 85 percent in the Delta region.

The spousal off-farm labor follows a somewhat different distribution, how ever, with 69 percent nationwide working more than 35 hours, 74 percent in Louisiana, and 72 percent in the rest of the Delta region. With more smaller farms operating in Louisiana than in the rest of the nation, nonfarm income is an important resource to farm households. See Table 1.

Type of Farming Operation
Diversity in farming enterprises can help in reducing income variability. Louisiana farmers grow corn, soybeans, wheat, cotton, grain sorghum, sugarcane, fruits and vegetables. They raise beef cattle, poultry and dairy cattle. In the United States, the greatest share of farms (34 percent) raises cattle for beef. In Louisiana and the Delta, the share of cattle operations is even higher at 55 percent and 52 percent, respectively. Dairy operations vie for last place in both Louisiana and the Delta, holding under 2 percent of the total.

The agricultural sector in Louisiana is a vital component of the state economy, contributing nearly $26 billion. This analysis demonstrates that Louisiana is lagging behind the national average and the rest of the Delta region in some categories such as income, farm size and household education. In addition, Louisiana farm households seem to place a greater importance on farming operations as residences and supplemental income, with more farm operators and spouses working full time off the farm than anywhere else in the United States. Given the additional observation that farm operators and spouses are the oldest in the nation, educators interested in supporting agriculture in Louisiana may take into advisement the need to prepare the next generation of farmers on how to better leverage farming assets (land, machinery and equipment), increase farm size to exploit economies of scale, and increase income earned through the farming business.

Ashok K. Mishra, Professor, and Aditya Khanal, Graduate Research Assistant, Department of Agricultural Economics and Agribusiness, LSU AgCenter, Baton Rouge, La.

(This article was published in the summer 2012 issue of Louisiana Agriculture magazine.)

9/12/2012 8:54:54 PM
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