We hear a lot of consumer and media referenced about "family farms." The general consensus is that they are a lot breed. While there's no question that agriculture has and will continue to change dramatically, the reality is that most U.S. farms are still "family farms.

According to a new USDA Economic Research Service report, 98 percent of farms in the United States are “family farms.”

For clarification sake, family farms are defined as proprietorships, partnerships or family operations that do not have hired managers. So admittedly, there is a wide range of possibilities there.

The report found that 61 percent of all farms did not participate in any federal farm program in 2003 (the most recent data), showing that only a minority of farmers receive agriculture subsidies.

Total agriculture production under contract grew at a slow rate of 5 percentage points from 1994/1995 to 2003, according to the report. Evidence suggests that the average operating profit margins and average rates of return on assets and equity were negative for “small farms” but positive for “large, very large and non-family farms.”

The report also found that “small farm” households typically receive substantial off-farm income. However, “large” and “very large” farms relied on off-farm income-- on average, the off-farm income contributed $30,000 annually to their livelihood.

The report also found that after combining farm and off-farm income, the median farm household income of $47,600 in 2003 was 10 percent greater than the median income of $43,300 for all American households. Only operators of limited-resource and retirement farms had a median income below the national median.

To view the entire report, go to http://www.ers.usda.gov/publications/EIB12/EIB12.pdf.