Blog

Are US Farmers More or Less Productive Than They Once Were?

That's the question asked in this recently published paper by authors at the USDA Economic Research service appearing in the journal Applied Economics Perspectives and Policy.  They find: 

Our empirical results show that two types of structural change have occurred since WWII, and both have influenced the U.S. agricultural productivity. First, we identified a break in trend in 1974. Prior to 1974, productivity grew at an average annual rate of 1.71%, but this rate slowed to 1.56% per year after 1974. The break in trend coincided with the 1973 oil embargo, which resulted in a rapid and unexpected rise in energy prices.

and

A different type of structural change occurred in 1985 when we observed an upward intercept shift for the level of productivity. This may have been due to a number of factors including a U.S. economic recovery, and a liberalization of farm policy since the mid-1980s. The 1.56% annual trend rate of growth persisted after the 1985 breakpoint.

Farmers are getting more productive, just not as fast as they once were.