The impacts of economic, demographic, and weather factors on the exit of beginning farmers in the United States

Abstract

The success of efforts to promote sustainability and growth of Beginning Farmers and Ranchers (BFRs) depends on a set of diverse factors whose individual impacts on the BFR survival in or exit from farming need further clarification. This paper evaluates how a variety of economic and demographic factors, together with weather variability, affect BFRs' exit from farming using farm-level data from the US Census of Agriculture for the period 1992-2012. The analysis uses insights from the literature on firm exit, recent research on young and beginning farmers, and the literature on climate impacts on agriculture since weather remains a key input to farming and its variability is a major source of risk to less experienced BFRs. The main finding is that flow variables such as profitability and off-farm employment do not affect BFR exit, while reliance on government payments increases the exit probability. Consistent with previous work, the size of operations matters, as BFRs with larger asset ownership, higher sales, and those in livestock production have lower probability of exit. Price variability that affects exit is largely attributable to weather variability, a finding which is consistent with that of previous work. The weather impacts on BFR exit are mostly attributable to droughts, but temperature also has a non-linear and highly seasonal impact.