A new report echoes an old trend: North Dakota farms have gotten bigger.
It also shows that in the past few years, especially, profitability has kept pace, or better, with the long-term consolidation of the state's farms.
"The bigger crop farms are doing especially well," said Andrew Swenson, the report's author and a farm and family resource management specialist at the North Dakota State University Extension Service in Fargo.
Swenson's report is the latest in a singular research project he's tracked for years: the financial records of more than 500 farms enrolled in the North Dakota Farm Business Management Program from 2000 to '09.
His study tracks the larger statistics: The number of North Dakota farms, for example, that sold more than $500,000 of farm products nearly quadrupled in the past decade, to 3,900, or a full 12 percent of the total 32,000 farms, according to the U.S. Department of Agriculture.
Since about 1950, the number of farms in the state has halved, with about the same number of acres -- 40 million -- farmed or ranched.
Meaning, of course, the average size of farms and ranches has about doubled.
The overall trend obscures the reality: the largest farms are increasing in numbers and size, and the smallest size "hobby" farms are increasing, while the mid-sized farms are decreasing.
About two-thirds of the state's farms sell less than $100,000 in products each year.
The past few years have been very good for North Dakota farmers, in general, with good crops and good prices the rule more than not.
Swenson said his study results were heavily influenced by generally strong crop yields, prices and profits in 2007 and 2008. The same conditions applied in 2010, so the trends identified in the report most likely have continued after it was written, Swenson said.
Among the report's findings:
While both assets and debt rose, assets rose faster. Debt as a percentage of assets fell from 53.9 percent in 2000 to 51.2 percent in 2009.
Farms with low annual sales typically are less solvent (or have a lower debt-to-asset ratio) than bigger ones.
Farms that produce crops have been more profitable than ones that raise livestock. In 2004 to '08, annual median net farm income was $97,618 for farm farms and $24,518 for livestock farms. Median means that half the farms had higher net farm income and half had lower. Beef prices have improved recently, which should boost the profitability of livestock operations, Swenson noted.
Farms with more than 2,000 acres have, of course, greater assets, liabilities and sales, but also more profitability than smaller ones.
Swenson said that's largely because bigger farms can spread a farm family's living expenses over more acres, thus increasing per-acre profitability.
Bigger farms also can benefit by buying inputs in large quantity at a slightly lower price, he says.
Smaller farms still have a place, at least if their operators "own a sizable amount of the land being farmed," Swenson said.
Smaller operators renting most of the land they farm could be a disadvantage against bigger farmers looking to rent the land, he said.
Farmers who have a higher rate of owned vs. rented land tend to be more solvent, which may reflect that older, more established farmers own more of their land, the report says.
The trend toward bigger farms has been a concern of some in North Dakota since the 1930s, a trend and concern tracked by Swenson's predecessors.
A 1948 paper written by Baldur H. Kristjanson and LeRoy W. Schaffner of the North Dakota Agricultural College (now NDSU) found that state's farms "are considerably larger than they were 15 years ago."
That worried many because "there appears to them to be a continued drift toward rural depopulation and the elimination of the small-scale proprietorship of agricultural holdings," according to the paper, delivered at the annual meeting of the American Farm Economic Association that year.
In 1948, the change in the previous decade came largely from farmers moving from horses to tractors: in 1939, half of the small grains crop was seeded using horses, but only 8 percent in 1946.
Swenson has said that increased profitability for the state's farmers in recent years comes from a combination including: research leading to better seed varieties and farming practices pushing average yields to new heights; growing world demand for food pushing crop prices higher; and bigger and better equipment that allows farmers to better handle the vagaries of weather and climate.
This article is a version of one by Jonathan Knutson in Agweek magazine.