Farm Classification System
The USDA Economic Research Service (USDA-ERS) has developed a farm classification system to divide U.S. farms into eight mutually exclusive and more homogeneous groups. The farm typology focuses on “family farms,” or farms organized as proprietorships, partnerships, and family corporations that are not operated by a hired manager. To be complete, however, it also includes nonfamily farms. A collapsed farm typology combines the eight groups into three categories.
Small Family Farms (gross sales less than $250,000)
Rural-residence family farms:
- Retirement farms. Small farms whose operators report they are retired.
- Residential/lifestyle farms. Small farms whose operators report a major occupation other than farming.
Intermediate family farms:
Farming-occupation farms. Family farms whose operators report farming as their major occupation.
- Low-sales farms. Gross sales less than $100,000.
- High-sales farms. Gross sales between $100,000 and $249,999.
Commercial Family Farms: (gross sales more than $250,000)
- Large family farms. Gross sales between $250,000 and $499,999.
- Very large family farms. Gross sales of $500,000 or more.
- Any farm not classified as a family farm, that is, any farm for which the majority of the farm business is not owned by individuals related by blood, marriage, or adoption.
The National Commission on Small Farms selected $250,000 in gross sales as the cutoff between small and large-scale farms.
Collapsed Farm Typology
The collapsed farm typology combines the seven farm typology groups into three categories:
- Rural residence farms. Includes limited-resource, retirement, and residential lifestyle farms.
- Intermediate farms. Includes farming occupation/lower-sales and farming occupation/higher-sales farms.
- Commercial farms. Includes large, very large, and nonfamily farms.