Young Farmers Hang on to Profitability as Priority

March 15, 2002

Overall profitability continues to be the top concern of America's young farm and ranch families, but after reaching a low point in 2000, their optimism is clearly on the rebound. In addition, a growing number say they are better off financially than they were five years ago.

Those are a few of the key findings of an informal survey of 296 young farmers and ranchers, ages 18-35, from across the United States, conducted by the American Farm Bureau Federation (AFBF).

The 10th annual survey of participants in AFBF's Young Farmer & Rancher (YF&R) Program, conducted in February during the 2002 YF&R conference, shows that despite economic challenges, today's young farmers and ranchers are continuing to invest in new technology and business practices to sharpen their competitive edge, while providing for their families and protecting the environment.

For the second straight year, a growing number of young farmers (59.27%) said they were more optimistic about farming than they were five years ago. That number is up from 2001's 57.8% and up considerably from the survey's historic low point of just 52.9% in 2000. The highest level of optimism was 80.75% in 1997.

When asked if they felt better off financially than they were five years ago, 83.1% said "yes," up from last year's 80.1% and up sharply from the survey's low of 69.7% in 2000. The highest level of stated financial security was 89% in 1998.

For the fourth straight year, young farmers said overall profitability was their top concern (27.5%). While that finding reflects agriculture's continued economic challenges, the victory margin for profitability concerns is becoming slimmer. Last year, 32% selected profitability as their top challenge and 36% tabbed it in 2000. Profitability has been the top concern in seven out of the survey's 10 years.

Like last year, the young farmers indicated the limited availability of land and other resources was their second biggest challenge, selected by 23.7%. That's up from 20% in 2001 and up sharply from 11.7% in 2000. During the survey's first year, this challenge ranked fifth.

Also like last year, complying with government regulations (16.8%) was the third biggest challenge, up from 13.5% last year. Over the survey's 10-year history, this challenge topped the list three times, in 1998, 1997 and 1994.

For the fifth 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 26.2%, however, that response was a sizeable decline from last year's 36.3%. Over the survey's 10 years, boosting exports has been the top choice six times.

The use of technology by young farmers and ranchers continues to be high, but a sharp upward trend appears to be leveling off. One notable exception to that leveling off is the use of handheld computers and "palmtop" devices, which shot up to 13.2% of respondents (8.1% in 2001).

Overall, computer use is steady to down slightly from last year at 86.8% of respondents. The use of e-mail also dipped slightly to 75.7%. The use of cellular phones rose by nearly five percentage points to 84.5%, while pager use fell by about six percentage points to 12.84%.

Young farmers and ranchers who use the Internet do so for many reasons. The most common use was to gather general and agricultural news, 62.5%, followed by entertainment, 55.1%; family education, 41.9%, record keeping, 37.5%, political communication and activity, 28%; collecting information for purchases, 26.7%; actual online purchases, 26%; and commodity marketing or trading, 19.6%. In addition, 4.4% of the young farmers reported that they have established 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 10 (64.5%) said they employ conservation tillage on their farms.

This year's survey also reveals that young farmers continue to employ a number of special management and marketing practices and services to gain a competitive edge. The most common was accounting services, used by 47.6% of respondents. Second was the use of professional crop advisers, 35.1%.

Other management and marketing practices included: contract production, 29.4%; hedging with futures and options, 29%; marketing information services, such as Farm Bureau ACRES, 27.7%; and marketing, management and financial planning consultants, 18.6%. To supplement farm income, 71.7% of the young farmers surveyed said that they, their spouse or both work off the farm.