UNIVERSITY OF ILLINOIS LIBRARY URBANA-CHAMPAIGN DCCXCTACXS _ 6/3 AGRICULTURE LIBRARY FARMS ARE GROWING LARGER <~ Some relationships to 9 Individual farm planning Community development * National farm policies By M. L. Mosher AGRICULTURE LIBRASff SEP 2 B 1930 Bulletin 613 UNIVERSITY OF ILLINOIS AGRICULTURAL EXPERIMENT STATION CONTENTS BASIS FOR THE STUDY 3 SIZE AND EFFICIENCY OF INDIVIDUAL FARMS 10 Illinois Farms Are Growing Larger 10 Forty Percent of Illinois Farmland Is in Farms Larger Than 260 Acres 11 Acres Worked per Man and Power and Machinery Investments Have Risen 12 Net Earnings per Acre and per $100 Invested Were Highest for Farms of 260-339 Acres 13 Earnings per Farm Rose With Size of Farm 15 Operator's Labor and Management Earnings Rose as Farms Increased in Size 17 Labor and Machinery Costs Declined With Larger Farms and With Less Feed Fed per Crop Acre 18 Smaller Farms Had More Manure and Soil-Building Legumes. .18 Farm and Family Earnings Were Related to Size of Farm and Level of Management 20 Landlord Earnings Were More Than Tenant Earnings for Farms Larger Than 260 Acres 22 COMPARISONS OF COUNTY-EQUIVALENT AREAS OF FARMS OF DIFFERENT SIZES 22 Distribution of Gross Farm Earnings 23 Production of Grain and Roughage 26 Operating Costs 27 Farm and Family Earnings per County Area 28 Numbers of Farm Families With Different Levels of Earnings. . .31 Number of Children Reaching 21 Years of Age 36 Farm and Nonfarm Populations 37 Hired Men and Operators 38 THE DESIRABLE SIZE OF CORN-BELT FARMS. . . .39 Urbana, Illinois July, 19S7 Publications in the Bulletin series report the results of investigations made or sponsored by the Experiment Station FARMS ARE GROWING LARGER By M. L. MOSHER, Professor of Farm Management, Emeritus IN ILLINOIS AND IN THE UNITED STATES as a whole, the average size of farm has been rising steadily. It is reasonable to assume that this trend will continue, though how long no one can, of course, say. It is hoped that the material presented in this bulletin will point out some implications of this change and stimulate the thinking of those responsible for farm and home planning, for community devel- opment, and for national policies on the subject. This study had two major objectives: to show how farms of differ- ent sizes differ in the efficiency with which they use land, labor, capital, and management; and to study the relation of size of farm to family, community, and national welfare now and in the future. The report is divided into three parts. In the first part, the relationship of size of farm to the efficiency of individual farms is discussed, largely in terms of 1954 data; in the second part eight hypothetical counties, each made up entirely of farms of one size, ranging from small farms to very large ones, are compared in various ways; in the third part, the author's opinions are given of some implications of the growth in size of farm. BASIS FOR THE STUDY Farm records. Records kept in 1954 by farmers living in the north- ern half of Illinois and cooperating with the Illinois Station were the major basis for the study. The results of the study of these records were compared with the results from similar studies in previous years. Four hundred records of Farm Bureau Farm Management Service farms for 1954 were used (Figure 1 and Table 1). In 1954 feed-cattle and feed-hog ratios were about normal. For farms of less than 100 acres, earnings were below normal because returns from dairy herds and poultry, which were common on small farms, were relatively low. Data from Illinois Farm Economics (January, 1956) show .that returns for $100 worth of feed fed to livestock for 1954 and for a longer period were as follows: 1954 22-year period (1933- 1954) Feeder cattle $126 $124 Hogs 154 148 Dairy-cow herds 141 171 Poultry 104 163 BULLETIN No. 613 [July, Si - 6O.6O. 6O. 6O. 60.bO.6O.6O P "i'* "J,Pi 1 * 10 *-_ wj_00 00 >0 -V O r-i t ~H Ov o cscsf~io~. ---. 60. 6O. 60.6O. 60. 60. 6O. 60. S - 0^000-000 ^.000^,0 .^OOOv-Ov- 0000*0 - 2 " Tf* ~-C1 00 tS N t^ IO ! H H >O (N CS1O 00( o ^5 2 6O 6O. ' s ' 00 * ** T* "^ " ^^ n5(^ r*^ OOfOr* ^ i ^-iv-<\O-r-^^-*OOfO tS 60. M- 6O. 6O 6O 6O. D So 10 < rt >-c o\ T< tf> oo o oo 10 10 TJI o * j-> r*> IOO>ONOO ^vo-J* OoOCSf*5*-'t^O'' Q !l! Js ^ c^^ ^o pi 2" 60.^ *~**cNOO*f) i O oo csio*or^ fe 60. 60. b O fs O ^* *-i ro O oo O* oo -H r^. t^ Tf T}< o r^ vo r>i cs xo 10 ^^ O ^H Oiot^-cs Ov rs {jfl "<> ioioO>oo io. ^^ (N IO CS vO ^ ^H f<> f5 CS 00 *4< ^H CS t*5 ^ IO ^H OQ.6O. 6O. 6O. 6O.6O.6O.6O. (0 W w o^ SS?S"^So ig^l^oo .-^ o O O IO H^ N-IH o! bfl t> K c :::::::; MMMM iMiMM! MM B K B I : : ' : o '3 : - . . j ..... g j^ CD **.. *j O *~ O M in - ^f 00 ) H r- - 10 ^ O <*> 00 CS "< f5 r 00 00 rf *O 00 V CM 00 O 00 00 00 T oo ts Os CM ^ >n > 00 O> O> WJ 00 *J<~H IB S : : ings nanagement earnin d management'. . . investment (rate e . t> . . v . . . . g ! : : sifc jj.1 . : :g& aJ- o - ! ' oj a. to J|- ||g|8 S|fl!l|! illlS I pj -*- ~ *j c ** G C C C 4> Saee.sIS O. O O C 37 i 260-339 340-4(9 TOTAL ACRES PER FARM (FIGURE 15) 7957] FARMS ARE GROWING LARGER 27 largely responsible for the fact that this area produced the largest tonnage of grain. It also produced the most hogs per tillable acre. The smaller tonnage of grain in the small- farm area was due to the large proportion of the land in hay and pasture. The smaller tonnage in the two large-farm areas was due to lower crop yields. The largest tonnage of roughage was produced in the small-farm area, which had a larger proportion of land in hay and pasture. The lowest production of roughage was in the three areas of largest farms. In Figure 15 the total tonnage of grain includes an estimate of the grain in grain silage. A few miscellaneous cultivated crops, such as canning crops, were converted to grain equivalent by using the weight of corn that would have been produced on the same acreage. Roughage included the hay produced plus the hay-equivalent of grass silage and pasture. Grass silage was converted to hay-equivalent by allowing the same weight of hay-equivalent per acre as the yield of hay on the same farm (about three tons of grass silage grew on the same acreage as one ton of hay). Pasture was converted by allowing one ton of hay- equivalent for each 60 pasture-days. Operating Costs Total operating costs other than feed costs above crop sales ( Figure 16 and Table 6) were 5 to 7 million dollars more for the county made MILLIONS 130 25 20 OPERATING COSTS PER COUNTY- EQUIVALENT AREAS 26.7 ij HIRED LABOR MISCELLANEOUS SEEDS AND CROP EXPENSE TAXES FERTILITY BUILDINGS AND FENCES MACHINERY AND EQUIPMENT 50-99 180-259 260-339 340-419 TOTAL ACRES PER FARM 420-499 500-579 580 OR MORE (FIGURE 16) 28 BULLETIN No. 613 [July, up of the smallest farms than for the five areas of farms from 100 to 499 acres, and about 8 million dollars more than for the two largest- farm areas. Greater machinery, equipment, building, and fence costs accounted for most of the higher costs. The county area of farms of 180 to 259 acres provided about 2i/2 million dollars more business an- nually for suppliers of machinery, equipment, and building and fencing materials than did the county areas of 500 or more acres per farm. When purchases of feed are added to the other operating costs, an even greater difference is found in the amount of business originating in the different areas, since such purchases were greatest in the smallest areas. Such purchases for the eight areas, from the smallest- farm area to the largest, were 15.3, 9.4, 10.5, 8.5, 8.6, 8.2, 6.2, and 7.4 million dollars. Some of this feed, however, was grain and roughage purchased from neighboring farmers. Farm and Family Earnings per Counfy Area Farm and family earnings per county-equivalent area before income taxes were paid, including the value of farm products consumed on the farm, were about 1^ million dollars higher in the area of farms of 260 GROSS RETURNS, OPERATING COSTS, AND EARNINGS FROM COUNTY- EQUIVALENT AREAS OPERATING COSTS 50-99 100-179 180-259 260-339 34O-4I9 420-499 500-579 580 OR MORE TOTAL ACRES PER FARM (FIGURE 17) 1957] FARMS ARE GROWING LARGER 29 to 339 acres than in any other area (Figures 17, 18, and 19). They were about 6 million dollars more than in the small- farm area and 3 to 4 million dollars more than in the two large-farm areas. 132,000 28000 - 24J300 - TOTAL RETURNS TO LAND, LABOR, CAPITAL. AND MANAGEMENT EARNINGS PER FARM 1954 FARM AND FAMILY EARNINGS TOTAL RETURNS TO LAND. LABOR. CAPITAL. AND MANAGEMENT EARNINGS PER COUNTY-EQUIVALENT AREA 80 160 240 320 400 480 560 640 700 30 BULLETIN No. 613 [July, In the two large- farm areas, farm and family earnings were low because of low gross returns, due to low crop yields and relatively small numbers of livestock, especially hogs. In the area of smallest farms, gross returns were much higher than in other areas, largely because of purchases of feed, but farm and family earnings were much lower because of high operating costs. While the larger numbers of farm families in the small-farm counties consumed more products raised on the farm, the proportion of gross production consumed on the small farms was small. After estimated income taxes are deducted, farm and family in- comes in the area of farms of 260 to 339 acres were about one-third higher (4.2 million dollars more) than in the area of largest farms (Figure 19). In the 50- to 99-acre area, total farm and family earn- ings before income-tax deductions were well below those in other areas, but after deducting estimated income taxes, incomes were about a million dollars higher in the small- farm area than in the two large- farm areas. FARM AND FAMILY EARNINGS PER COUNTY- EQUIVALENT AREAS ^ESTIMATED INCOME TAX PvlFARM PRODUCTS LJ CONSUMED ON FARMS FARM AND FAMILY INCOME LESS TAX MILLIONS 120 15.4 163 19.2 20.5 18.9 50-99 100-179 180-259 260-339 34O-4I9 420-499 5OO-579 580 OR MORE TOTAL ACRES PER FARM (FIGURE 19) 7957] FARMS ARE GROWING LARGER 31 Numbers of Farm Families With Different Levels of Earnings The percent of all farm families falling into each of the seven levels of farm and family earnings is shown in Figures 20a and 20b for each of the eight county-equivalent areas. In this chart the width of each column shows the percent of farms in each level-of -earnings class. The height of each column shows the average farm and family earnings for each class. Definite trends as size of farm increases are evident in Figure 20. The proportion of families of hired men increased from 5 percent of all farm families in the small- farm county to 63 percent in the large- farm county. Only 2 percent of the farm families in the small-farm county ( 1 farm in the sample of 50) had as much as the standard level of earnings required for a good living, while 31 percent of those in the large- farm area had luxury or wealthy earnings. The largest numbers of farm families having standard and well-to- do earnings are found in the county-equivalent areas of farms of 100 to 179 acres (982 families) and 180 to 259 acres (1,187 families). The largest percentages in these two level-of -earning classes are found in the areas of farms of 180 to 259 acres and of 260 to 339 46 and 37 percent respectively (Table 7 and Figures 20a and 20b). In the county of farms of 100 to 179 acres, 18 percent of all families had hired men's or below hired men's earnings and 2 percent had luxury earnings. Thus 80 percent of the families in that area were "between poverty and riches." In the county of largest farms, 63 per- cent were hired men's families and 31 percent had luxury or wealthy earnings. Only 6 percent were "between poverty and riches." When data for five different periods were calculated for county- equivalent areas, the same general trend appeared (Figures 21a and 21b and Table 8). In the charts four levels of earnings are considered: operators with below hired men's earnings and with substandard earn- ings in one group; operators with standard and well-to-do earnings; Table 7. Percent of Total Number of Farm Families in Each of Four Level-of-Earnings Classes, 1954 Study Size-groups of farms - total acres per farm Level-of-earnings class SO to 100 to 180 to 260 to 340 to 420 to 500 to 580 or 99 179 269 339 419 499 579 more Hired men.. 5 16 23 37 47 54 55 63 Substandard 93 54 22 5 6 3 2 Standard 2 28 46 37 14 12 8 6 Wealthy 2 9 21 33 31 35 31 32 BULLETIN No. 613 [July, DISTRIBUTION OF FARM- FAMILY EARNINGS IN COUNTY- EQUIVALENT AREAS CH BELOW HIRED MEN ^STANDARD E<| LUXURY E3 HIRED MEN E2 WELL-TO-DO WEALTHY irm SUBSTANDARD |40,000 35,000 - FARMS OF _ 50- 99 ACRES WEALTHY 3O.OOO 25,000 20,000 LUXURY I5.OOO WELL-TO-DO 10,000 STANDARD 5,000 _ j 4 OOO 1 BELOW STANDARD $750 $S *$-iI!l||||||||||| | ll'||||| |||1|] rnnnnnnj 36% 5% 57% 2% 40pOO 35,000 _ FARMS OF _ 100-179 ACRES WEALTHY 25,000 20,000 LUXURY $I5J500 Zmnnn WELL-TO-DO * IZ> P9 ^ oc STANDARD . BTsl^g i(J # /J ^\ 2 5,000 $z,oo^.. | X : ti......j||||[[|[|||||||||[[[|||[||||||||||||||| 2% 16% 52% 23% 5%2% !; 40,000 | 35,000 - FARMS OF _ 180-259 ACRES WEALTHY g 25,000 20,000 IK f)OO LUXURY $17,350 >.350 ^^ WELL-TO-DO i|i 10,000 STANDARD 45^00 ^^^^^^^W5S^ ^ '%%&$ 5,000 .BELOW ^0^^12,350 [JJ| | jj||j | j j ^ ^^^g 2% 23% 20% 32% 14% 9% 40,000 35,000 V) OflO - FARMS OF _ 260-339 ACRES WEALTHY 25,000 20,000 15 000 LUXURY $19.500 i 10,000 5,000 m$%m< ~ STANDARD K^^AV^ ' / /^ / // / ^/ / ^/ / / / / f . > $%$&&& -KLOW STANDARD 43.400 ffit^H^^^^^' 37% 5% 13% 24% 21% (FIGURE 20a) 1957} FARMS ARE GROWING LARGER 33 $ 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 40,000 35,000 30,000 25,000 20,000 \ 15,000 E 10,000 5 5,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5pOO DISTRIBUTION OF FARM-FAMILY EARNINGS IN COUNTY-EQUIVALENT AREAS O BELOW HIRED MEN ^ STANDARD ^ LUXURY E3 WELL- TO-DO E3 HIRED MEN Cm SUBSTANDARD I WEALTHY FARMS OF 340-419 ACRES WEALTHY LUXURY $20.400 WELL-TO-DO STANDARD BELOW STANDARD $2,550 47% 6% 6% 8% 33% FARMS OF 420-499 ACRES WEALTHY $34,650 LUXURY WELL-TO-DO STANDARD BELOW STANDARD _L 54% 3% 7% 5% 26% 9% FARMS OF 500-579 ACRES WEALTHY $31,500 LUXURY WELL-TO-DO STANDARD BELOW STANDARD $2.550 _L 55% 2%3%5% 31% 4% - FARMS OF _ 580 OR MORE ACRES WEALTHY LUXURY WELL-TO-DO STANDARD BELOW STANDARD $2.65O 63% 3%3% 18% 13% (FIGURE 20b) 34 BULLETIN No. 613 [July, HIRED MEN 6,000 5,000 4poo 3000 2POO 1,000 NUMBERS OF FARM FAMILIES IN DIFFERENT INCOME CLASSES IN COUNTY-EQUIVALENT AREAS I STANDARD AND C7J WEALTHY AND WELL-TO-DO Kg LUXURY SUBSTANDARD 5.669 NORTHERN ILLINOIS 1954 SO-99 OCM79 180-259 260-339 340-419 420-499 500-579 580 OR MORE 4,175 4.000 3pOO 2,000 I POO HIRED MEN II.TOO WEST- CENTRAL ILLINOIS 1946-1948 UNDER 180 180-259 260-339 340-419 420 OR MORE TOTAL ACRES PER FARM (FIGURE 21 a) 1957] FARMS ARE GROWING LARGER 35 NUMBER OF FARM FAMILIES IN DIFFERENT INCOME CLASSES IN COUNTY- EQUIVALENT AREAS ^SUBSTANDARD STANDARD AND BB3 WEALTHY AND ^SUBS>IANUAKU wELL-TO-DO saal LUXURY 3,000 2,000 1,000 3,374 HIRED MEN [:. : :]: : : _ $1,650- UNDER $5,000 _ $5,000- $10,000 EAST-CENTRAL ILLINOIS 1945-1947 UNDER 80 180-259 260-339 34O-4I9 420 OR MORE 4POO 3,000 2,000 I POO 4.062 HIRED MEN $900 UNDER $4,000- $4,000- $8,000 $8,000 OR MORE - NORTH-CENTRAL ILLINOIS 1936-1945 UNDER 180 180-259 260-339 340 OR MORE 3,000 2000 1,000 HIRED MEN $700 UNDER $2,500 NORTH-CENTRAL ILLINOIS 1929-1931 UNDER 180 180-259 260-339 340 OR MORE TOTAL ACRES PER FARM (FIGURE 21b) 36 BULLETIN No. 613 [July, those with luxury and wealthy earnings; and hired men. The money value assigned to each group is varied as necessary for the different periods. The largest number of farm families in the standard and well-to- do classes was found in the 180- to 259-acre area in the 1954 and 1929-1931 studies, and in the 100- to 179-acre area in the other three studies (Figures 21a and 21b). Table 8. Earnings of Four Classes of Farm Families During Five Periods Class of farm families 1954 1946-1948 1945-1947 1936-1945 1929-1931 Hired men 32,500 31,700 31,650 3900 3700 Operators with sub- standard earnings. . Under 37 ,000 Under 35 ,000 Under 35 ,000 Under 34,000 Under 32 ,500 Operators with standard earnings'. 37,000 to 35, 000 to 35, 000 to 34,000 to 32, 500 to 315,000 310,000 310,000 38,000 34,000 Operators with luxury earnings 315, 000 or 310,000 or 310,000 or 38,000 or 34,000 or more more more more more a Standard earnings during the two earlier periods were considered sufficient to enable the farm family with three children to live in a modern home of those times, give college educations to part of their children, and save enough for retirement. It is apparent that except in the depression years farm families tend to fall into two distinct level-of-earnings classes in the hypo- thetical county-equivalent areas of farms of 340 or more acres. One class consists of the hired men, who form 50 to 60 percent or more of the farm population; the other class consists of operators' families with incomes that provide comparative luxury and wealth. The so- called middle-class farm family tends to disappear in an area of corn- belt farms of more than 400 acres of good corn land. Number of Children Reaching 21 Years of Age More children in middle-class families (that is, families with stand- ard and well-to-do earnings) reach the age of 21 annually in the county- equivalent area of farms of 180 to 259 acres than in any other area (Figure 22). Next in number of children from middle-class families was the area of farms of 100 to 179 acres, and close behind was the area of farms of 260 to 339 acres. On farms of more than 340 acres, children fell into two distinct classes: those raised in homes with sub- standard earnings and those raised in homes where earnings were high enough to enable them to live in luxury and wealth, if the earnings were not diverted to the accumulation of more wealth. 1957] 600 FARMS ARE GROWING LARGER 37 500 400 300 200 100 NUMBER OF CHILDREN REACHING 21 YEARS OF AGE ANNUALLY IN COUNTY- EQUIVALENT AREAS HOMES WITH SUBSTANDARD EARNINGS HOMES WITH STANDARD EARNINGS I HOMES WITH LUXURY EARNINGS 50-99 100-179 180-259 260-339 340-419 TOTAL ACRES PER FARM 420-499 500-579 580 OR MORE (FIGURE 22) The smallest numbers of children in middle-class families were in the area of smallest farms and the two areas of largest farms. Farm and Nonfarm Populations The typical 20-township county in the northern half of Illinois, without a large city like Peoria or Rock ford, would have a total popu- lation of about 50,000 people. Assuming that the total population would remain the same regardless of the division between farm and nonfarm population, the division for the different county-equivalent areas would be as shown in Figure 23. The division would vary from 62 percent farm and 38 percent nonfarm in the area of smallest farms to 14 percent farm and 86 percent nonfarm in the area of largest farms. 38 BULLETIN No. 613 [July, KX) 90 | 80 ! 60 8 50 g 40 & H30 ui u g20 K> RURAL AND URBAN POPULATIONS IN COUNTY- EQUIVALENT AREAS E22 URBAN 3 FARM HIRED MEN AND FAMILIES FARM OPERATORS AND FAMILIES 50-99 100-179 180-259 260-339 340-4)9 TOTAL ACRES PER FARM 420-499 500-579 580 OR MORE (FIGURE 23) For the county-equivalent areas of small farms, the assumption that the population would remain the same may not be realistic because industry would come in to use the surplus labor on the small farms. This would not be as likely to happen in areas of farms of 180 or more acres, which could be organized to use all family labor profitably. Hired Men and Operators In the county-equivalent areas of farms of 420 or more acres, more than half of the farm families are hired men's families. In the areas of farms of less than 260 acres, less than one- fourth of the farm families are hired men's families. The percentage of farm families who are operator families varies from 95 in the county of smallest farms, to 63 percent in the area of farms of 260 to 339 acres, to 37 percent in the area of largest farms. 1957] FARMS ARE GROWING LARGER 39 THE DESIRABLE SIZE OF CORN-BELT FARMS 1 If northern Illinois farms continue to grow larger at the accelerated rate of the past thirty years, commercial farms of less than 100 acres on which there is no outside income will be absorbed into larger farms with the passing of this generation of farmers. With the passing of a second or third generation, farms of less than 260 acres will all but disappear. The number of part-time and residential farms is now increasing rapidly. According to the 1954 Census, 35 percent of all farms in the United States were part-time, residential, or subsistence farms. They contained, however, only 10 percent of the farm land, and only 2 per- cent of all market sales came from such farms. It is the author's opinion that such farms will continue to increase in number, will become smaller, and will continue to have little effect on total market sales. 2 The author does not prophesy that the change in size of farms will follow exactly this pattern. He believes, however, that if the present attitudes toward land tenure, taxation, zoning laws, and national plan- ning continue and if individuals are more interested in accumulating land and other wealth than in developing a better community life, the trend will be somewhat as stated. Is this trend desirable from the standpoint of the national welfare and the welfare of the people who live on the land, including hired workers? In the author's opinion, it is not all desirable. The most desirable size of corn-belt farms might be described as the size that will accomplish the following: (1) provide for the optimum use of land, labor, and capital; (2) permit continuity of family ownership and operation of farms from generation to generation; (3) allow for the largest number of middle-class families to live on and receive their income from the land; (4) provide the largest community base of income expendable for family living and community development; and 1 The author accepts responsibility for the statements and implications in this section. He bases his opinions not only on the study reported here and similar studies but on experiences and observations during fifty years of agricultural extension and research work in Illinois and Iowa and on observations made as he traveled in every state of the Union, noting and photographing the living conditions of farm people. * See "Family Farms in a Changing Economy," U. S. Dept. Agr. Inf. Bui. 171. 1957. 40 BULLETIN No. 613 [July, (5) permit local political decisions to be made by the farm owners and operators who pay most of the taxes. Owner-operated farms of 160 to 240 acres and tenant-operated farms of 240 to 320 acres of good-cornland grain and livestock farms meet all these requirements. Well-operated poultry, fruit, and vege- table farms of 80 acres or even less of good land may qualify. On less- productive land, larger farms are, of course, required. The optimum use of land, labor, and capital was found on farms of 260 to 339 acres in the northern Illinois studies for 1954 (page 13). The net earnings per acre, per $100 invested, and per man were smaller for farms under 260 acres and were no larger for farms of 340 or more acres. The optimum size has increased by about 60 acres since 1916, when farm records were first available in the area. There will probably be further increase in the size of farms that will provide for the optimum use of land, labor, and capital. The two-man size of farm business is desirable, since it provides for the continuity of family ownership of farms or for continuity of operation of rented farms. Such continuity of ownership and operation within the family is much more likely to follow on farms large enough to occupy the time and managerial abilities of two men than on smaller farms. Children who grow up on farms too small to occupy the time and energies of two men and to support two families will ordinarily leave the farm and become established elsewhere ten to twenty years before their parents are ready to retire. If the farm business is large enough, however, to utilize the efforts of two men, some type of father-son agreement may be developed which will enable both father and son to be occupied. (The "son" in a father-son combination may be a son, son-in-law, nephew, young brother, or some other young man in whom the owner is interested.) This concept of the continuity of ownership and operation of a two-man farm by use of the father-son agreement helps solve one of the most perplexing problems of present-day agriculture: the high cost of land and large operating capital needed, which makes it almost impossible for many worthy young people to get started in farming. Working under such an agreement, a young couple can gradually take over ownership of operating capital and land as their earnings increase and the parents' labor earnings decrease. They in turn can pass the farm and business on to their children. The size in acres of two-man farms varies greatly with the type of 1957] FARMS ARE GROWING LARGER 41 farming, quality of land, and managerial abilities of the operators. The fifty Illinois farms of 260 to 339 acres used in this study, which size provided for the optimum use of land, labor, and capital, were essen- tially two-man farms. They used an average of 20.5 months of labor per year. They were hog-grain-beef-cattle farms with 49 percent of returns from hogs, 26 percent from grain, 16 percent from cattle, and only 9 percent from dairy, poultry, sheep, and miscellaneous income. The author defines a two-man farm as one that requires from 18 to 30 months of labor when used with average efficiency. On that basis two-man farms in this study varied from an 85-acre dairy and poultry farm to a 670-acre grain farm that produced a few hogs. The average size of two-man Woodford county farms (Figure 4, page 12) increased from about 200 acres to about 320 from 1916 to 1955. They will un- doubtedly become larger as further efficiencies in crop and livestock production come into general use. More families having earnings of $7,000 to $15,000 in 1954 were found in the county-equivalent area of farms of 180 to 259 acres than in any other size-of-farm area (Figure 22, page 37). Roger Bab- son, one of America's leading economists, wrote in a January, 1956, magazine article: The future progress and security of this country depend on the children of the middle class. I often wish that parents would spend more time and money training their children and less on trying to accumulate more of an inheritance for them. Children do not need to inherit money so much as to have the attention of their parents while they are young. Judged on this basis alone, farms of 180 to 259 acres were the most desirable of the eight sizes of farms studied. However, these farms have proved to use land, labor, and capital less efficiently than larger farms and as now organized do not provide enough work for two men and for continuity of ownership from generation to generation. Only 15.6 months of labor were used annually on the average of such farms. The efficiency of modern machines, however, is now being realized by the cooperative ownership and use of large and expensive machines by the operators of two or more such medium-sized farms. Those who object to the loss of independence by such cooperation may be putting the desire for their own independence ahead of the welfare of their families. Farms of 100 to 179 acres measured up very well with those of 180 to 259 acres in regard to the number of middle-class families in the county-equivalent area of such farms; there were, however, nearly three substandard-income families to one middle-class family in the 42 BULLETIN No. 613 [July, area. They, too, could be made to fit into the desired two-man size of business by developing intensive livestock businesses. However, it is doubtful whether they could be operated as efficiently as the larger farms, even with cooperative ownership and use of large and expensive machines. There were nearly as many middle-class families in the 260-339- acre area as in the 180-259-acre area, and less than half as many families, including hired men, with substandard earnings. Twenty-one percent of the farm families in the 260-339-acre area had luxury earn- ings. None had wealthy earnings. There were relatively few middle-class families in all four hypo- thetical county areas of farms of 340 or more acres. Most families were either hired men's families with incomes of $2,500 to $3,000 or oper- ators' families with earnings, before income taxes, of $15,000 to $60,000. Many families on farms with luxury earnings, however, live no better than those on farms of lower earnings because the earnings are used to buy more land. If the trend in size of farms of the past thirty years continues, the great-grandchildren of the present generation will find themselves in a rural environment where a majority of the children grow up in hired men's homes and a minority in homes of luxury or wealth. This will tend to lead to definite class distinctions in the school, church, and social life of the community. Such a class cleavage was found in a California study of two nearby similar areas, one of small family farms and one of large commercial farms. 1 A county area of farms of 260 to 339 acres would have about a third more expendable income, after income taxes, for family living and community development than a county area of farms of 580 or more acres (Figure 19, page 30). In 1954 this would have been about $4,000,000 more for the year. Even in a depression year, such as from 1929 to 1931, there would have been about $1,000,000 more expendable income in an area of medium-sized farms than in an area of large farms. It is the author's opinion, based on observation and reports of research in other areas, that considerably more of the income of large- farm families than of the medium-farm families is spent outside the county in which the farms are located. In the county area of farms of 260 to 339 acres, much more money would be available each year for home improvement, family develop- 1 See "Small Business and the Community," by W. R. Goldschmidt. U. S. Printing Office, Washington. 1946. 1957} FARMS ARE GROWING LARGER 43 ment, schools, churches, rural roads, and other community enterprises than in an area of smaller or larger farms. This is a major considera- tion for all who are interested in family development, community wel- fare, and national planning. Some local decisions would be made by hired men, rural resi- dents, and part-time farmers if northern Illinois commercial farms were 420 acres or more in size. This will happen if the present trend continues. In 1954, 54 to 63 percent of the farm people in the three hypothetical counties of 420 or more acres were hired men and their families (Table 7, page 31). Henry C. Wallace's prophecy. On the Iowa State College campus is a monument to Henry C. Wallace, who was on the staff of the College for a time, was editor of Wallace's Farmer for about twenty- five years, and then was Secretary of Agriculture from 1921 until his death in 1924. The plaque reads: As editor he worked for a richer and happier rural life ; as Secretary of Agriculture, he provided an economic service for American farmers ; as statesman, he led the vanguard in the battle for equality for Agricul- ture; as prophet, he saw in the fertile lands of the cornbelt the basis of a rural civilization finer than any the world has known: He died labor- ing to bring nearer the day of its coming. If Wallace's vision of a "rural civilization finer than any the world has known" is to become a reality for our great-grandchildren, it is time that we give continued serious study to the size of farm that will be most desirable one hundred years from now. The decision made one hundred years ago to sell the public lands of the great midwest in 160-acre tracts has had profound influences on today's economic, social, and political life. Legislative and executive decisions of the next few years may have even more influence on conditions that will be found one hundred years from now. Considering the five measures of desirability of size of farm economy of operation, continuity of ownership from generation to generation, number of children reared in middle-class homes, com- munity development, and political control of local agricultural matters it appears from these studies that the two-man family farm is the most desirable. Three roads appear. One road leads to the public subsidizing, in one way or another, the small or inefficiently operated farm. This would lead to farm populations of relatively poor people constantly clamoring for more help. 44 BULLETIN No. 613 A second road leads to concentration of ownership or operation of farm land in the hands of a few people. The commendable desire of the American people to encourage individual initiative of those having superior managerial abilities, the fact that increasing efficiencies require more concentration of capital, and the bargaining power that such owners and operators would have, all make this road very attractive to many agricultural leaders and some political leaders who are them- selves men of that ability and opportunity. Although slow, there is a definite movement in this direction, especially in specialty crop areas, which may lead to an undesirable situation one or two centuries from now. The third road, leading to the division of farm lands into family- size units large enough to insure a good level of living to all but the least efficient and not so large as to cause wide class distinctions, is a difficult one to follow. It is a splendid challenge to the agricultural and political leaders of this generation. It is the author's belief that Henry C. Wallace's prophecy can best become a reality if this middle road is followed. It is not the purpose of this publication to suggest how this can be done. The purpose is as stated in the beginning to "stimulate the thinking of those responsible for farm and home planning, for community development, and for national policies on the subject." 10M 7-57 62771 UNIVERSITY OF ILLINOIS-URBANA