How economic conditions changed the number of U.S. Farms, 1960–1988: A replication and extension of Gale (1990) to midsize farms in the United States and abroad

Abstract

AbstractWe replicate and extend the analysis of Gale (1990) to provide insight into the role of economic conditions on farm distributions in the United States and abroad. Our underlying hypothesis is that the effects of the economic factors on the change in farm numbers remain the same (direction wise) for different times, farm sizes, and countries/regions. We investigate the role of economic conditions on the disappearing middle farms. We extend the analysis to include the time period 1960–2020 and more economic factors, estimate the models by farm size categories, using seemingly unrelated regression, and apply it to international settings (Brazil and the Eurozone). We find no evidence to support the disappearing middle farm hypothesis, despite a declining trend in the number of US midsize farms. The role of economic factors changes according to farm size and country. Economic factors (e.g., population, financial stress, and infrastructure) are important to explain the increase in small and midsize farm numbers in Brazil, and the decreasing small farm numbers in the Eurozone, showing opposite trends in farm numbers globally.