Heterogeneity in US Farms: A New Clustering by Production Potentials

This paper uses agglomerative hierarchical cluster analysis to group 2778 farming-defined counties into six clusters, revealing farm patterns across the contiguous 48 states of the United States. To understand the differences in economic performance and improve farm households’ well-being, economists have endeavored to identify patterns in US farming. The US is a leading global producer and exporter of many agricultural and food products. Our primary objective is to construct a policy-relevant farm clustering to characterize agricultural homogeneity in US farms’ production potential. We identify six clusters that are relatively homogeneous in five dimensions: farm size, farm assets, farm labor, farm output, degree of mechanization, and government programs. Minimizing diversity within a cluster allows for analysis of public policy changes on specific clusters and comparison of differential effects of the change across clusters.