Abstract
The success of efforts to promote sustainability and growth of Beginning Farmers and Ranchers (BFRs) depends on a set of diverse factors whose individual impacts on the BFR survival in or exit from farming need further clarification. This paper evaluates how a variety of economic and demographic factors, together with weather variability, affect BFRs’ exit from farming using farm-level data from the US Census of Agriculture for the period 1992–2012. The analysis uses insights from the literature on firm exit, recent research on young and beginning farmers, and the literature on climate impacts on agriculture since weather remains a key input to farming and its variability is a major source of risk to less experienced BFRs. The main finding is that flow variables such as profitability and off-farm employment do not affect BFR exit, while reliance on government payments increases the exit probability. Consistent with previous work, the size of operations matters, as BFRs with larger asset ownership, higher sales, and those in livestock production have lower probability of exit. Price variability that affects exit is largely attributable to weather variability, a finding which is consistent with that of previous work. The weather impacts on BFR exit are mostly attributable to droughts, but temperature also has a non-linear and highly seasonal impact.
Highlights
Beginning Farmers and Ranchers (BFRs) are farmers and ranchers who have been operating a farm for 10 years or less
Our results indicate that price variability that affects exit is attributable to weather variability, which is consistent with previous work
The high level of correlation indicates that our choice of the climate variability measure is probably a good approximation since it is likely affecting the price variability captured by the standard deviation in the input-output price index
Summary
Beginning Farmers and Ranchers (BFRs) are farmers and ranchers who have been operating a farm for 10 years or less. Recent research shows that the actual number of new farm entrants may be as much as double the previous estimates [3] These contradictory findings point to the need to understand better what drives BFR success and identify the factors that contribute to their survival in order to ensure sustainability of US agriculture. The most recent Agricultural Act of 2014 contains provisions for crop insurance programs, Farm Service Agency loan programs, and the Conservation Reserve Program’s Transition Incentive Program [5] It is unclear if such programs are sufficient to ensure BFR ability to remain in farming, since the factors that affect BFRs success or exit need to be better identified
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