By Dr. Jeffrey H. Dorfman, Dr. Hugh C. Kiger, and Dr. Alejandro Gutierrez-Li for N.C. State University

The 2022 Census of Agriculture was released this fall, providing insights into the status of North Carolina agriculture.

The big picture is that agriculture in has grown in value in the state since the previous census of 2017, mostly from expansion of livestock sales, while its footprint in terms of acres changed little.

Farmers in North Carolina had gross farm sales of $18.7 billion in 2022, up from $12.9 billion in 2017. They did this on 300,000 fewer acres (8.1 million in 2022 versus 8.4 million in 2017) and with the number of farms falling from 46,418 to 42,817. The increase in value of farm sales was partly due to higher commodity prices in 2022 and an increase in higher-valued animal production in hogs and poultry requiring comparatively little acreage

There is a continuing shift toward larger farms and concentration of production among a small number of very large farms. The number of farms selling over $1,000,000 in farm products increased from 3,442 in 2017 to 4,095 in 2022, representing 9.6% of the farms in North Carolina.

This top tenth of producers sold $16.8 billion, making up just over 90% of the state’s total gross farm income. The state averaged $4.1 million in gross ag sales per farm. The most common commodities produced are poultry, grains and oilseeds, hogs, beef cattle and vegetables.

A further sign of the increasing concentration in the largest, most efficient farms is that only 40% of North Carolina farms had positive net farm income in 2022, even though that was a profitable year.

Net farm income statewide totaled $6.3 billion, or about one-third of gross farm sales. The number of farms generating less than $25,000 in sales plus government payments fell from 34,290 in 2017 to 30,784 in 2022.

North Carolina agriculture is incredibly diverse. The 10 most common commodities produced in the state by number of farms producing them are beef, poultry, soybeans, corn, wheat, sheep and goats, hogs, horses and other equines. cotton and tobacco.

The largest acreage increases were in cotton, orchardsand berries. If all vegetable farms or all orchards were aggregated into single categories instead of being listed separately, each would have ranked among the top 10 for commonality.

Orchards, in particular, are a source of growing diversity in North Carolina agriculture, with a large percentage increases in apples (up 15% from 2017), grapes ( up 65%), peaches (up 35%) and pecans (up 30%).

Animal agriculture extended its dominance in North Carolina, accounting for 75% of gross farm sales (or $14.0 billion) compared to 25% of gross farm sales (or $4.7 billion) derived from crops.

N.C. farmers continue to use diversified approaches to generate revenue. Almost 1,500 North Carolina farms sold commodities directly to either consumers or retailers, with average sales per farm of about $125,000.

An impressive 1,167 farms sold value-added products with average sales of $65,585 per farm, up 122% from 2017. These value-added products tend to have much higher profit margins than basic commodities

In addition, 982 farms collected revenues from recreational services or agritourism, with an average of $30,956 in revenue per farm (up 29% from 2017).

Finally, 269 farms earned more than $50,000 in direct-to-consumer sales, with sales per farm for these successful marketers averaging over $250,000.

North Carolina farmers looking for extra revenue streams should explore less-traditional marketing channels such as direct to consumer, direct to retailer, or sales of value-added products.

North Carolina saw a decrease in organic farms, dropping from 404 to 343 between 2017 and 2022, while annual sales from those farms more than doubled from an average of $321,145 per farm in 2017 to $769,750 per farm in 2022. Organic farms are now often the same scale as conventional agricultural operations.

Many of the most important agricultural commodities produced in North Carolina are labor-intensive.

Growers of sweet potatoes, apples and blueberries, tobacco, Christmas trees, green industry products (like indoor and ornamental plants) and other specialty crops, as well as animal sector farms, all employ a significant number of workers of different skill sets.

Limited labor availability, retention issues and increasing costs remain challenges for many agricultural producers. Between 2022 and 2017, demand for H-2A agricultural workers increased each year, keeping North Carolina among the top-five states relying on this program.

In 2017, 12,492 operations reported hired labor expenses. In 2022, the number fell about 16% to 10,464 farms. This decrease is larger than the loss in the overall number of farms. Labor expenses increased from $810 million to $933 million.

The decline in hired workers was entirely driven by smaller operations (those with less than $50,000 reported expenses). In particular, very small farms with expenditures of no more than $1,000 experienced a reduction of 44% in hired labor. Farms with expenses greater than $100,000 saw their payments to hired labor increase between 18% and 29%

The reduction in hired labor could have been caused by many factors. Smaller scale operations could have started to rely more on family members, given the rising costs of hired labor.

Alternatively, some smaller farms could have grown to medium-size operations, and were no longer considered in this group. An increase in automation and mechanization by larger operations may have allowed them to reduce their need for laborers.

The trend may also reflect the tight, post-COVID labor market in which workers had opportunities to find more attractive, higher-paying jobs.

Many farmers rely on farm labor contractors (FLC) to get workers. FLCs are third-party entities that facilitate hiring processes. For a fee, they match workers to employers and can help manage human resource issues.

The number of operations with contract labor expenses went down. Between 2017 and 2022 the number of farms using contract labor declined from 6,582 to 4,874 operations (26% reduction) and the total expenses in contract labor declined sharply from $303 million to $238 million.

Looking deeper into these aggregate trends, the data show that operations of all sizes (as measured by expenses) relied less on contract labor in 2022. Most notably, medium-sized agricultural operations (those with expenses between $50,000-$99,999) reduced their use of contract labor by 56%.

An increase in FLC fees, as well as the ability of the growing number of larger operations, who are themselves capable of affording in-house legal, recruiting, and immigration teams, are likely behind this pattern.

In 2022, more farms hired workers for less than 150 days (five months). This pattern could be due to more operations being only able to access workers for shorter periods of time associated with harvest seasons, as opposed to having permanent laborers on their payroll.

This could also be due to an intentional managerial decision to rely more on part-time workers. Farm workers found on a farm for less than 150 days usually migrate across states following different crop seasons to stay employed most of the year. Small and medium-sized farms (from 1 to 179 acres) hired most of their workers for up to 150 days.

Larger operations relied more on permanent workers. This pattern suggests that larger operations have the profit margins and diversified commodities to keep the same workers employed in multiple tasks year-round.

Larger farms can afford to recruit higher-wage domestic workers without visa restrictions that can remain permanently in the U.S. Farms’ reliance on labor varies based on their size as measured by acreage. On average, each farm hired 4-5 workers.

One concern nationally is that the number of agricultural producers might be slowly dwindling as the average age of famers in America has increased. In North Carolina, the total number of agricultural producers decreased by 2.14% in five years, from 74,062 in 2017 to 72,479 in 2022.

Around two thirds of farmers in 2022 were men, but there was a modest jump in the number of female producers. The state also experienced an increase, of 13%, in the number of hired farmers, in part compensating for the 2.62% reduction in the number of producers working primarily in farming.

The average age of North Carolina producers remained the same, 58 years, but this number masks important changes across different groups. The number of younger agricultural producers under 25 years of age increased by 20% between 2017 and 2022.

Increases of 9.57% were found among 25-34 year olds and 11.52% for 35-to-44-year-old farmers, suggesting there is a small yet growing pipeline of new producers. Individuals that have been involved in agriculture for many years seem to have remained in the sector even after age 75.

Among this group, the number of producers grew by almost 18%. There was a decline in the number of growers between 45 and 74 years old — and particularly among individuals between 45-54.

The Census doesn’g elaborate on the reasons behind such pattern, but it could be that individuals in these age groups could be transitioning out of agriculture either partially (finding another main source of income) or completely (switching industries). North Carolina resembles the rest of the country in race and ethnicity of farmers.

In both 2017 and 2022, White farmers represented around 95% of all producers. Between 2017 and 2022, North Carolina saw strong gains (in percentage) from a small base in Hispanic and American Indian farmers, while at the same losing Black and Asian farmers.

If U.S. and North Carolina agriculture can continue productivity gains, the sector will likely remain a strong and vibrant industry. Challenges related to continued labor shortages, pests, and more frequent extreme weather events (like droughts, heat waves and fires) continue to pose risks.

Investments in new markets, automation, and precision agriculture could help deal with such issues and offer a path forward.

The preceding article originally appeared on January 13, 2025 at the Wilkes Journal-Patriot’s website and is made available here for educational purposes only. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 106A-117 of the U.S. Copyright Law.