December 2015
Ag Insight

Ag Insight


Farmers’ use of contract labor on the rise

Agricultural technologies adopted over the last half-century, embodied in equipment, structures, seeds and chemicals, allow farmers to use less labor. As a result, even though total agricultural production more than doubled between 1960 and 2011 (the latest estimates available), the amount of self-employed labor in agriculture fell by 70 percent, and the amount of hired labor fell by 60 percent.

While most labor used on farms comes from the self-employed labor of farm families and hired labor (full and part-time employees), farmers also hire labor contractors to provide labor to farms, usually for specific tasks. Contract labor accounted for 1.2 percent of total costs in agriculture in 2011, compared to 13 percent for self-employed and hired labor.

While the use of contract labor declined by half between 1960 and the mid-1980s, tracking the decline in self-employed and hired labor, it has since grown as some farmers have shifted to contract labor in place of hired labor.


Productivity gains spur agricultural output

Worldwide agricultural output has been growing, but the factors causing that increase have changed.

The average annual rate of global agricultural output growth slowed in the 1970s and ’80s, then accelerated in the 1990s and 2000s. In the latest period estimated (2001-12), global output of total crop and livestock commodities was expanding at an average rate of 2.5 percent per year.

In the decades prior to 1990, most output growth came about from more input usage (i.e., more labor, capital and material inputs per acre of agricultural land). Bringing new land into agriculture production and extending irrigation to existing agricultural land were also important sources of growth.

This changed over the last two decades, as input growth slowed. In 2001-12, improvements in productivity - getting more output from existing resources - accounted for about two-thirds of the total growth in agricultural output worldwide, reflecting the use of new technology and changes in management practices by agricultural producers around the world.

U.S. livestock production led by poultry and eggs output

Total U.S. livestock output has grown more than130 percent since 1948, with the poultry and eggs subcategory growing much faster than meat animals (including cattle, hogs and lamb) and dairy products.

In 2011, the real value of total poultry and egg production was more than seven times its level in 1948, with an average annual growth rate exceeding 3 percent. The rapid growth of poultry production is due largely to changes in technology, advances in genetics, feed formulations, housing, and practices and increased consumer demand.

Retail prices of poultry fell in the late 1970s and ’80s, relative to beef and pork prices, leading to expanded poultry consumption in that period. Increased domestic consumption and exports were also driven by consumer response to an expanding range of new poultry products as the industry moved away from a reliance on whole birds and production shifted to cut-up parts and processed products such as boneless chicken, breaded nuggets/tenders and chicken sausages.

Brazil now an importer and exporter of ethanol


Brazil had historically been the world’s largest net exporter of ethanol, but rising sugar prices (sugar is Brazil’s primary ethanol feedstock) and growing demand for domestic ethanol consumption has led to lower ethanol exports.

In 2010, the Brazilian government lifted a tariff on ethanol imports through the end of ’15, leading to the country’s first imports of ethanol. Imports grew rapidly in ’11 and resulted in Brazil being a net ethanol importer by a small margin for the only time in its history. Ethanol exports recovered in ’12, but have declined each year since, imports remaining an important source of supply.

Since ’10, the United States, now the world’s largest ethanol exporter, has been the largest supplier of ethanol to Brazil, followed distantly by the European Union.

Farm to School Census data shows positive results

The U.S. Department of Agriculture has announced preliminary Farm to School Census data for school year 2013-2014 that indicates strong farm-to-school programs can increase the number of students purchasing school breakfast and lunch, improve consumption of healthier foods at school, and reduce plate waste.

Census data also indicates that schools purchased nearly $600 million worth of food locally in school year 2013-2014, a 55 percent increase over school year 2011-2012 when the first Farm to School Census was conducted, creating new marketing opportunities for farmers and ranchers in their communities.

The results are an outcome of efforts to target resources to help schools serve healthier meals to students following the passage of the bipartisan Healthy, Hunger-Free Kids Act of 2010. A recently released report shows the grants alone have helped 12,300 schools improve nutritious meal options made with local ingredients for 6.9 million students that have expanded market opportunities for family farmers and ranchers in their communities.

The Farm to School Census is a nationally representative survey of school districts. Nationwide, more than 42,000 schools have Farm to School programs, operating in conjunction with the National School Lunch Program and other school meal programs.

Census results can be accessed online at Final Farm to School Census results will be released in early 2016.

Most U.S. farmland is operator-owned

Because land is a critical input to farming and farm real estate represents such a large portion of the value of farm sector assets (around 80 percent), the ownership of agricultural land is a topic of interest to farmers, lenders, policymakers and others concerned with the farm sector.

A majority of U.S. land in farms (62 percent) is operator-owned, according to the 2012 Census of Agriculture. The balance of farmland is rented, and the portion of rented land in farms has ranged from 35 percent to 43 percent over the 1950-2012 time period. Some farmland is rented from other farm operations - nationally about 8 percent of all land in farms in 2012. The majority of rented land in farms is rented from non-operating landlords. In 2012, 30 percent of all land in farms was rented from someone other than a farm operator.

Food security lagging in some African nations

USDA’s annual International Food Needs Assessment, covering 76 low- and middle-income food-insecure countries, has indicated a long-term decline in the population that is food insecure, based on the nutritional target of 2,100 calories per person per day.

While the food-insecure population has declined substantially in Asia, Latin America and the Caribbean, it has remained high in Sub-Saharan Africa and is projected to rise.

Factors contributing to declines in the food-insecure population share include gains in domestic production of food staples, slowing population growth rates, and increased food imports due to higher export earnings and lower prices for imported food.

Although food security is projected to be stable or improve in most SSA countries through 2025, it is projected to deteriorate in a number of countries, particularly those coping with prolonged civil strife.

India is world’s largest beef exporter

Since 2009, India’s exports of beef - specifically water buffalo meat, also known as carabeef - have expanded, with India moving ahead of Brazil to become the world’s largest beef exporter in 2014.


India’s beef exports grew about 14 percent annually between 2000 and 2015, and are expected to lead major exporters with about 6 percent annual growth during 2015-2025. India’s exports of relatively low-cost beef (primarily to low- and middle-income markets in Southeast Asia and the Middle East) reached a 24 percent global market share in 2015, and that share is projected to increase to 32 percent by ’25.

The U.S. share of the global beef market has fluctuated, but averaged 12 percent during 2013-2015, and is projected to rise to 15 percent in ’25.