There are 2.2 million commercial farms in the U.S., each producing crops or livestock valued at a minimum of $250,000.
However, farms with incomes of more than $1 million account for more than 60% of the total farm gate share today. Farms in that category total only about 57,000, the seating capacity of Dodger Stadium in Los Angeles, according to George Russell, executive partner of Currie Management Consultants, which specializes in working with machinery manufacturers and dealers.
Just three decades ago $1 million farms represented 23% of total farm sales. Russell told the Italian Farm Machinery Convention in Laguna Niguel, Calif., that this consolidation is being driven by growing global demand and competition for agricultural products.
This demand is reflected in the $300 billion growth in world agricultural exports from 2001 to 2006 — the latest statistics available.
This huge, growing global market is offering opportunities for U.S. farmers, but they must compete by increasing productivity or scale or both.
“Farmers who have been through past (economic) cycles are very good business people. For the most part they run family farms and understand how to invest in a business to make money,” he explained.
They are looking for new technology to remain in business and that is where small equipment manufacturers play an important role.
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