Agri-Access at 20 Years: Agriculture Continues its Ascent in Productivity
A 20th anniversary is an opportune time to look back and take in what’s transpired and progressed. Since 2003, when we first entered the field of agricultural secondary lending, the landscape has transformed for producers and lenders in some very striking ways.
After digging up sets of data from the USDA, comparing the early 2000s to the start of the 2020s, the trendlines are clear. Agriculture has become an even bigger, higher stakes business for individual producers. They’re ramping up capacity in our core commodities. At the same time, international trade, particularly with China and North American nations, is making a bigger impact on the ag economy.
A snapshot of agriculture, then and now
Historians say the United States was founded upon an agrarian economy. As the U.S. becomes more urbanized, land dedicated for agriculture shrinks along with the number of farming operations.
Yet, the defining factor of 20th century agriculture is not in the reduction of farming operations and farmers, but the impressive spike in productivity. Advances in labor-saving machinery, chemical inputs and genetic improvements for animals and plants have all fueled this increased output of agriculture.
Now that we’re over one fifth of the way into the 21st century, it is clear this trend continues.
Since the start of this century, there are now 10 million fewer acres used for crops (a decrease of 3 percentage points), with 132,000 fewer farming operations, an overall decrease of 7%.
Total crop land used for crops
- 2002: 340 million acres
- 2022: 330 million acres1
Number of farming operations
- 2002: 2,158,090
- 2022: 2,002,7002
The rise of corn production
Corn is big business. Its significance to the food economy cannot be overstated. Back in the late 1930s, corn yields started rising from their average 26 bushels and by 1955, we established what is still the average increase of 1.9 bushels a year. The past two decades have been no exception. Back in 2002, bushels of corn per acre were 129.3, compared to 172.5 in 2022.
Over the two decades, farmers dedicated 11.5 million more acres to corn production: from 69.3 million in 2002 to 80.8 million in 2022.
Not only is each acre more productive, but there are also more acres dedicated to corn. That corn production is up, way up: from 8.9 million bushels in 2002 to 13.9 million bushels in 2022.3
Soybean production is also on the rise, with 38 bushels per acre in 2002 vs 50.1 bushels per acre in 2022.
The consolidation of dairy
The consolidation of livestock is another key trend in agriculture over the past 20 years. Across the board, figures show farmers are maintaining higher populations of broilers, beef cows, turkeys, hogs, and egg layers. But the changes in the dairy business are particularly striking: Fewer dairy operations with larger herds.
Back in 1997, the average U.S. dairy operation had 140 milk cows, which 20 years later skyrocketed to 1,300.4
Meanwhile the U.S. has been shedding around 2,300 licensed dairy herds a year over the past two decades.
- 2002: 70,375
- 2022: 27,9325
Yet, 9.4 million head of dairy cows are reaching new heights in production:
- 2001: 165.336 billion pounds (18,139 pounds per cow)
- 2021: 226 billion pounds (23,948 pounds per cow)6
Trade
U.S. agricultural exports have seen a meteoric rise these past 25 years — with valuations at $196 billion in 2022 compared to $62.8 billion in 1997. With 25% of U.S. farm products shipped beyond our borders, exports have a profound impact on farmers and the rural economy.
The driver of higher exports is a greater demand for high-value, consumer-oriented products, especially dairy, meat and produce, from $27 billion in 2002 to $120 billion in 2022. This reflects both rising populations and rising incomes.
The two largest recipients of this surge of exports are East Asia and North America:
East Asia:
- 1997: $21 billion
- 2022: $68 billion
North America:
- 1997: $12 billion
- 2022: $57 billion7
20 years of innovative solutions serving rural America
Agri-Access was established in 2003 in the heart of corn country. Since then, we’ve expanded our services to every ag-producing state in the U.S., offering participation lending solutions for ag lenders.
This snapshot of agriculture spanning from the start of the century, when we had our start, to this point in the current decade reveals how the average operation has reached new heights in terms of scale along with unprecedented levels of productivity.
To thrive in today’s agricultural climate, producers require swift and scalable solutions from their lending source.
That’s where Agri-Access comes in. Our participation loans and quick-turn Scorecard option enhance your lending capabilities, empowering growth for ag producers. For 20 years, our mission has focused on enriching agriculture and rural communities through innovative lending solutions for banks and non-banks. Our shared investment will be critical for future growth.
Learn about our participation loan offerings, and reach out to a relationship manager any time to get started.
Sources
- USDA Economic Research Services | Major Land Uses (Summary Table 3)
- USDA | Farms and Land in Farms 2003 and 2023
- USDA Economic Research Service | Feed Grains Sector at a Glance
- USDA Economic Research Service | Consolidation in U.S. Agriculture Continues
- Farm Progress | S. dairy herd numbers fall to 27,932
- USDA | Milk production 2002 and 2022
- USDA Economic Research Service | S. Agricultural Trade at a Glance
