Farm Bureau Finds Profits Worry Young Farmers

March 21, 2001

For the third straight year, young farmers and ranchers say the biggest challenge facing them is profitability, and for the fourth consecutive year they say they believe the best way to address that challenge is to boost export sales of U.S. farm products. Despite a high level of off-farm employment and supplemental income, young farmers and ranchers are feeling the same economic pressures as their more established counterparts.

Those were key findings of a survey of 295 young farmers and ranchers from 41 states, ages 18-35, conducted by the American Farm Bureau Federation (AFBF). The ninth annual survey of participants in AFBF's Young Farmer & Rancher Program revealed the traditional optimism of younger producers continues to be tempered by economic challenges, but they continue to invest in new technology and business practices to sharpen their competitive edge and protect the environment.

Nearly a third (32%) said overall profitability was their top concern – down slightly from last year's 36% and 1999's 32.4% but considerably higher than 1998's 18.6%. The young farmers indicated the limited availability of land and other resources was their second highest challenge, selected by 20% of respondents. That number was up sharply from last year's 11.7% when land and resources ranked third.

Third on this year's list of challenges was the cost of government regulations (13.5%, 13.6% last year). Over the survey's nine-year history, profitability has topped the list of concerns six times and regulations three times.

Like last year, this year's fourth largest challenge was urban encroachment on farmland, selected by 7.1% of the respondents. Fifth on the list (6%) were challenges associated with parental control of farm decisions, followed closely by tax burdens (5.3%) and healthcare availability (5%). Labor availability and related regulations was eighth (4.3%). This year's other top challenges, in descending order, were the availability of financing and competition from larger or more established farms.

For the fourth straight year, the young farmers view international trade as the key to profitability. Respondents said boosting U.S. agricultural exports was the most important step the U.S. government could take to help them and their farms. At 36.3%, that response was a slight decrease from last year's 38.4%.

In second place was "reduce and reform federal taxes" (17.8%). Strengthening protection for property owners was third at 11.%. This year's top three choices were identical in order to last year's.

Young farmers were evenly split on a question dealing with the future source of farm income. Just more than half (50.63%) said that once the current farm program expires farm income should come totally from the marketplace, while 49.37% said farm income should continue to be supplemented to some degree by the federal farm program. Last year, more young farmers expressed the need for future income-support payments (65.48%), but even this year's lower number (49.37%) for government income support is 37% higher than just five years ago, when only 12% thought farm policy should include income support.

The use of technology by young farmers and ranchers continues to be high, but the sharp upward trend appears to be leveling off. Internet access among young farmers rose only slightly this year to 79.7%, up from 77.1% last year. Just five years ago, only 10.5% reported having Internet access. Young farmers and ranchers who use the Internet do so for many reasons. While entertainment was the highest reported use (85%), many are using the Internet for family education (75.9%) and business. Business uses include: record keeping assistance, 62.4%; purchasing equipment, supplies and farm inputs, 57%; commodity marketing and trading, 40.3%; and to collect information before making local purchases, 40%.

In addition, more than a fourth of respondents expressed an interest in taking online courses on the topics of: farm financial management, 47.1%; commodity marketing, 32.2%; hedging with futures and options, 26.1%; and animal health, 25.4%.

Overall, computer use is steady compared to last year at 89.2%. The use of e-mail showed the largest increase, shooting up to 79.7%, a 14-percentage-point increase from last year. Only 3.4% of the young farmers reported having personal or business Internet home pages.

Mirroring past surveys, this year's respondents reported a strong commitment to conservation and the use of environmentally beneficial farming practices. More than six out of every ten (62.7%) said they employ conservation tillage on their farms. More than half (51.9%) said they practice crop rotation with three or more crops, and nearly half (47.12%) said they regularly test soil or crop tissue prior to the application of nutrients. Nearly a quarter of respondents (23.4%) said they use integrated pest management techniques such as field scouting to reduce crop protectant use.

More than half of the young farmers (54.3%) reported they would plant biotech crop varieties this year. Last year's survey question on biotechnology was a bit broader and, therefore, not comparable, as 59.3% said they would plant biotech crops within the next two years.