Crop And Livestock Farms Show Similar Long Term Financial Performance
Michael Langemeier, economist with Purdue University's Center for Commercial Agriculture, examined farm financial data from 2007 to 2025 and found that both crop and livestock farms maintained strong rates of return through changing market conditions.
Researchers examined commodity price trends and financial records from beef, dairy, diversified, and crop farms between 2007 and 2025. The study found that average rates of return ranged from 8.1% to 9.3% across all farm types.
Since 2007, crop and livestock prices have not always moved in the same direction. Livestock prices lagged crop prices from 2008 to 2010 but later outperformed them during several periods. The difference became especially noticeable in recent years, with livestock prices significantly higher than crop prices in 2024, 2025, and the first half of 2026.
Despite these price swings, overall farm profitability remained relatively consistent across farm sectors.
The study looked at changes in farm net worth, including retained earnings, capital contributions, and market valuation changes. Retained earnings represented the largest contributor to growth in net worth, accounting for more than 60% of the increase across all farm types.
Results also showed differences in efficiency. Diversified and crop farms generally reported stronger net farm income ratios, indicating higher financial efficiency. Dairy farms retained the smallest share of their income, while beef farms retained the largest share.
Another important finding involved risk. Diversified and beef farms experienced less variation in annual returns than dairy and crop farms. Greater diversification often helps reduce financial risk and improve stability during fluctuating market conditions.
The research concluded that both crop and livestock farms benefited from the long term agricultural market environment. Although commodity prices experienced periods of divergence, no farm sector appeared to be significantly disadvantaged over the nearly two decade period.
Overall, the findings highlight the resilience of U.S. agriculture and show that strong financial performance has been achievable across a variety of farming operations.
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