Understanding small farmers and ranchers

Many small-farm and -ranch owners underestimate their risks, thinking standard homeowners insurance policies are sufficient for their operations. Independent insurance agents have a critical role in bridging this gap by offering tailored solutions.

Who are small farmers and ranchers?

Small farmers and ranchers, mostly family-operated, account for 89% of U.S. farms, contributing 17% of the nation’s agricultural production and managing 41% of agricultural land. These farms are typically less than 180 acres, with an average farmer age of 58.1 years. Many small farmers juggle part-time farming with other jobs to supplement their income, and women, while comprising only 36% of producers, play a key role in decision-making.¹

Small farms often rely on direct-to-consumer sales, and although their adoption of digital tools and precision agriculture lags behind larger farms, their use of these technologies is steadily growing. Despite their importance, small farmers face significant challenges, including unpredictable weather, volatile markets and limited resources. Specialized protection is essential to securing their livelihoods, helping these dedicated producers remain resilient and continue their essential work: feeding the nation.

Challenges

All farms face challenges, but certain challenges impact small farms more severely. Small farmers and ranchers face a myriad of challenges in an increasingly competitive landscape.

• Limited financial resources: Many small farms struggle to secure the funding necessary to invest in modern equipment, adopt sustainable practices or weather unexpected financial shocks. This financial fragility hampers their ability to grow and compete in the market.
• Market consolidation: The number of small farms in the U.S. is steadily declining as larger operations dominate more land and resources. According to recent data, the largest 2% of farms control 42% of all farmland, creating barriers for small farmers who often struggle to compete with these larger, resource-rich entities.¹
• Market access: Small farmers, despite their reliance on direct-to-consumer sales, often lack efficient storage, transportation and processing infrastructure. This limitation increases their vulnerability to post-harvest losses and volatile market conditions, particularly for perishable goods.
• Weather vulnerability: Severe weather disproportionately impacts small farmers, who are typically the first to experience its effects. These farmers, often living in rural areas with minimal infrastructure, face heightened exposure to droughts, floods and extreme weather events. Despite their pivotal role in global food production, they frequently lack the tools and resources to adapt effectively to these challenges.

Your role

Many small farmers mistakenly believe that a standard homeowners policy will provide sufficient coverage for their farm property and liability. This misunderstanding leaves them at risk of significant financial losses when unexpected events — such as severe weather or equipment failures — occur. With the increasing frequency of extreme weather and other challenges, the need for specialized insurance coverage has never been more critical.

Independent insurance agents play a vital role in supporting small farmers and ranchers by understanding their unique risks and providing tailored insurance solutions that safeguard their operations and livelihoods. You can add value by engaging in proactive discussions with your clients, uncovering hidden risks, addressing future goals and crafting policies that meet their needs. By fostering trust and building lasting partnerships, you can help empower farmers to better prepare for the unexpected, ensuring their long-term financial stability and success.