A publication of the Indiana Business Research Center at IU's Kelley School of Business
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The Importance of Indiana Agriculture

Agriculture has a rich heritage in Indiana and Lt. Governor Becky Skillman has noted that agriculture contributes an estimated $25 billion a year to the state’s economy. The agriculture industry involves more than production agriculture, which includes the raising of livestock or crops. It also includes manufacturing, wholesale, storage, support services, tourism, and retail operations. Agriculture is entwined in every aspect of our lives, regardless of where we live through the basic essentials of food, clothing, and shelter. Therefore, it is important to revisit and realize the importance of agriculture in Indiana as its impact is far reaching. Utilizing the U.S. Department of Agriculture (USDA) data, this article discusses agricultural trends and their impacts on Indiana. 

Indiana Farmer Demographics

Over the past 60 years, the production agriculture industry has seen the average age of farm operators increase, an increase in off-farm occupations by farm operators, a decline in the amount of available farmland, and a growing spread in farming operation size. Data showing these trends over time can be seen in Table 1. Since the 1987 Census of Agriculture, the average age of farm operators has been greater than 50 with Indiana’s average age at 55. A reason for this advanced age structure of farm operators is the farm’s status as the family home. More than 20 percent of farm operators report that they are retired and have simplified their farming practices, yet they are still counted in the Agriculture Census. The decline in operators under the age of 25 may be attributed to the fact that more farmers are pursuing a college education. Almost one-quarter of farmers today have graduated from college with a four-year degree or more, compared to only 4 percent of farmers in 1964. One reason why farm operators are pursuing higher education is to enhance their ability to adapt to the rapidly changing agricultural marketplace, adopt new farming techniques, and obtain nonfarm jobs.

Table 1 : Indiana Farm Operator and Farm Characteristics Over Time

2007 2002 1997 1992 1987 1950 Change since 1987*
Age of Farm Operator
Under 25 Years 396 537 928 1,321 1,669 3,760 -76.3%
25 to 34 Years 4,136 4,001 4,940 7,231 9,923 23,321 -58.3%
35 to 44 Years 9,217 11,729 12,312 13,496 14,449 34,067 -36.2%
45 to 54 Years 16,832 16,260 13,908 13,923 15,607 35,766 7.8%
55 to 59 Years 7,999 7,424 6,688 6,720 7,810 34,473 2.4%
60 to 64 Years 7,004 6,667 6,014 6,523 7,824 -10.5%
65 to 69 Years 5,820 5,268 4,776 5,398 5,742 26,086 1.4%
70 Years and Over 9,534 8,410 8,350 8,166 7,482 27.4%
Average Age 55.0 53.7 52.8 51.6 50.5 49.6 8.9%
Primary Occupation
Farming 25,510 33,612 26,993 31,547 36,654 89,709 -30.4%
Other 35,428 26,684 30,923 31,231 33,852 70,356 4.7%
Number of Farms and Farm Size
Number of Farms 60,938 60,296 57,916 62,778 70,506 166,627 -13.6%
Small Farms
1 to 9 Acres 9,720 5,436 4,183 5,141 5,444 14,755 78.5%
10 to 49 Acres 19,533 18,595 13,987 14,234 15,010 37,132 30.1%
Mid-size Farms
50 to 179 Acres 15,993 18,691 19,913 21,268 24,892 80,319 -35.8%
180 to 499 Acres 8,012 9,263 11,099 12,928 15,902 32,375 -49.6%
500 to 999 Acres 3,774 4,494 5,268 6,000 6,670 1,835 -43.4%
Large Farms
1,000 to 1,999 Acres 2,621 2,827 2,753 3,207 2,588 211 1.3%
2,000 Acres or More 1,285 990 713 N/A N/A N/A 80.2%

*Percent change from 1987 to 2007
Note: Farm operator characteristics only represent the principal farm operator (1 per farm). Shaded cells indicate a declining trend.
Source: IBRC, using data from the Census of Agriculture reports

Contrary to prior declines in the number of Indiana farms, the number of farms has increased since 1997. This increase is due to a rapid 40 percent growth in farming operations between one and 50 acres. Table 1 also shows the changes in farm size over time, with mid-size farms showing a steady decline while small and large farms have experienced growth in the past 20 years. Now the concern is focused on the mid-size operations (50 to 1,000 acres) as they have declined by a total of 36 percent over the past 20 years.

Agriculture-Related Occupations

As the saying goes in the agriculture industry, “agriculture is more than just cows, sows, and plows.” In 2008, slightly more than 129,000 Hoosier workers were involved in an agricultural-related occupation, a decline of 3,000 workers from 2007.1 Additionally, the 2007 Census of Agriculture showed Indiana had 91,590 farm operators on 60,938 farms, with 36,343 of these operators indicating that farming was their primary occupation (see Table 1). The Census of Agriculture only determines primary occupation for three operators per farm, so this number may be understated. Thus, it is assumed that roughly 168,650 Hoosiers were involved in an agricultural occupation in 2007.2 Therefore, agricultural occupations consisted of 4.5 percent of all Indiana employment in 2007 (see Table 2).

Table 2 : The Agriculture Industry and Indiana's Workforce, 2005 to 2007

  2005 2006 2007
State Employment (BEA) 3,684,823 3,705,903 3,727,784
Agricultural-Related Occupations (IDWD)+ 133,095 133,205 132,310
Farm Operators (USDA) 34,977* 34,977* 36,343**
Agriculture as Percentage of Workforce 4.6% 4.5% 4.5%

*The Census of Agriculture is only taken in years that end with "2" or "7;" therefore the number of farm operators was averaged between years 2002 and 2007. The 2002 data may be underrepresented because it only reflects the number of principal operators (1 per farm) who consider farming as their primary occupation.
**2007 data includes up to three operators per farm who consider farming as their primary occupation. Therefore, the 2007 data may be underrepresented, but better stated than 2002 data.
+Data for hunting and trapping, farm product warehousing and storage, tobacco manufacturing, seafood product preparation and packaging, animal aquaculture, and sheep and goat farming were either suppressed or had less than 50 employees. To include these industries, 25 employees was arbitrarily selected to serve as proxy for employment; therefore, the total agricultural-related employment may be slightly under or over-represented.
Source: IBRC, using data from the Bureau of Economic Analysis (BEA), Indiana Department of Workforce Development (IDWD), and USDA Census of Agriculture

The top 10 agricultural-related occupations include a diverse array of employment ranging from production agriculture to value added manufacturing of raw agricultural products. Due to the dominance of manufacturing in Indiana, it is not surprising to see five of the 10 occupations in this sector (see Table 3).  

Table 3: Top 10 Indiana Agricultural Occupations by Employment, 2008

Rank Occupation Employment
1 Farming as a Primary Occupation 36,343*
2 Grocery and Related Product Merchant Wholesalers 13,332
3 Other Wood Product Manufacturing** 10,428
4 Animal Slaughtering and Processing 8,939
5  Wood Kitchen Cabinet and Countertop Manufacturing 8,602
6 Bakeries and Tortilla Manufacturing 8,027
7 Veterinary Services 6,571
8 Wood Office Furniture Manufacturing 4,559
9 Other Food Manufacturing*** 4,462
10 Farm Supplies Merchant Wholesalers 4,441

*This number represents up to three operators per farm that consider farming as their primary occupation and may be understated. Farming as a primary occupation is derived from the 2007 Census of Agriculture and may be more or less than the declared number for 2008.
** Other wood product manufacturing includes manufacturing of wood window and doors; cut stock, resawing lumber and planing; other millwork (including flooring); wood container and pallets; manufactured homes; and prefabricated wood building materials.
*** Other food manufacturing includes manufacturing of roasted nuts and peanut butter; other snack foods; coffee and tea; flavoring syrup and concentrate; mayonnaise, dressing and other prepared sauces; spices and extracts; and perishable prepared foods.
Source: IBRC, using data from the Indiana Department of Workforce Development (IDWD) and the 2007 Census of Agriculture

Of all the agricultural occupations, the top five highest paying were pesticide and other agriculture chemical manufacturing ($106,322), research and development in the physical engineering and life sciences ($82,171), commodity contracts brokerage ($69,246), food product machinery manufacturing ($64,387), and agricultural implement manufacturing ($60,487).

Agriculture Productivity and Output

Over time, the amount of land in Indiana devoted to agricultural production has declined, ranging from nearly 19.7 million acres devoted to farms in 1950 to the latest estimate of 14.8 million acres, a decline of 25 percent (see Figure 1). Although the quantity of land availability has declined, the size of farming operations has risen, in part due to the number of retiring farm operators. Purchasing farmland is expensive; ranging from $3,351 to $4,994 per acre in Indiana, depending on the land quality.3 Therefore established farmers with available capital have a greater chance of purchasing the land than smaller, beginning operators. This increases average farm size over time.

Figure 1: Land Devoted to Farms and Average Farm Size

Figure 1: Land Devoted to Farms and Average Farm Size

Source: IBRC, using data from the Census of Agriculture reports for 1950 through 2007 and Indiana National Agricultural Statistics Service data for 2008

Despite the conversion of farmland to residential and commercial use, productivity levels have dramatically increased from 1960 to 2004 (the latest available data). Indiana’s agricultural productivity increased 2.3 percent to 1.42, placing the state seventh in the nation in productivity, much better than Indiana’s rank of 27th in 1960. This surge likely came from the adoption of technology amongst Indiana farm operators as they lagged far behind the technology leaders in 1960.4

The advancement of agricultural productivity has helped Indiana’s farm operators be more efficient and increase their production levels. Indiana is currently ranked in the top 10 in sales value of several commodities (see Table 4). The state dominates in the production of corn, soybeans, poultry, hogs, and milk and other dairy products from cows (particularly ice cream).

Table 4: Indiana’s Output of Agricultural Products, 2007

Item Farms Sales ($1,000) U.S. Rank in Sales
Layers (Chickens that Produce Eggs) 3,583 11,731,996 3
Corn for Grain 24,597 4,306,502 5
Soybeans for Beans 22,569 2,247,468 4
Poultry and Eggs 3,798 887,196 15
Hogs and Pigs 3,420 783,507 5
Milk and Other Dairy Products from Cows 2,071 583,212 14
Cattle and Calves 18,483 275,196 27
Turkeys 498 269,606 7
Nursery, Greenhouse, Floriculture and Sod 888 126,241 27
Wheat for Grain 5,033 107,744 19
Vegetables, Melons, Potatoes, and Sweet Potatoes 1,380 78,719 25
Other Crops and Hay 8,493 64,391 36
Other Animals and Other Animal Products 1,057 25,457 15
Fruits, Treenuts, and Berries 749 19,193 28
Horses, Ponies, Mules, Burros, and Donkeys 2,749 15,472 24
Sheep, Goats, and Their Products 3,000 7,422 23
Tobacco 267 6,598 11
Cut Christmas Trees and Short Rotation Woody Crops 202 2,662 21
Aquaculture 31 2,567 44
Pullets for Laying Flock Replacement 519 N/A 5
Broilers and Other Meat-Type Chickens 399 N/A 23

Source: IBRC, using data from the 2007 Census of Agriculture and Indiana National Agricultural Statistics Service

Agricultural Exports

The state not only produces a large amount of agricultural products, but also ranked as the ninth largest exporter of agricultural commodities in the United States in 2008 at nearly $3.8 billion. Since 2004, the value of agricultural exports has nearly doubled (94.5 percent). Top exported products and their U.S. rankings include soybeans and its products (fourth), seeds (fifth), feed grains and products (sixth), poultry and products (seventh), and live animals and meat (10th).5 Exports increased in nearly every commodity except tobacco and dairy between 1999 and 2008 (see Figure 2).

Figure 2: Indiana Agricultural Export Trends, 1999 to 2008

Figure 2: Indiana Agricultural Export Trends, 1999 to 2008

Source: IBRC, using data from the USDA Economic Research Service

The majority of the agricultural commodities mentioned and shown in Figure 2 are non-value added products, meaning raw products. Table 5 shows the agricultural output along with the remainder of the state’s exports.6 Of all the goods exported from Indiana, the greatest shares belong to transportation equipment manufacturing (22.7 percent), chemical manufacturing (17.8 percent), machinery manufacturing (13.7 percent), and crop and animal production (12.6 percent). Agricultural products are involved in three of the top four exporting industries and its relative share is shown in the chemical and machinery manufacturing sections below. Overall, the agricultural industry sectors contributed roughly 17.6 percent of the state’s exports for a value of $5.3 billion in 2008.

Table 5: Indiana Exports by NAICS Code, 2008

NAICS Code NAICS Code Description Value ($000) Percent of Exports
n/a Total 30,103,689 100.00%
336 Transportation Equipment Manufacturing 6,843,996 22.42%
325 Chemical Manufacturing 5,345,639 17.51%
333 Machinery Manufacturing 4,107,926 13.46%
111- 112 Crop and Animal Production 3,788,200 12.41%
334 Computer and Electronic Product Manufacturing 1,912,883 6.27%
331 Primary Metal Manufacturing 1,833,372 6.01%
339 Miscellaneous Manufacturing 1,428,536 4.68%
335 Electronic Equipment, Appliances, and Component Manufacturing 1,078,941 3.53%
332 Fabricated Metal Product Manufacturing 719,702 2.36%
326 Plastics and Rubber Products Manufacturing 676,849 2.22%
311 Food Manufacturing 511,321 1.67%
990 Special Classification Provisions 342,882 1.12%
325320 Pesticide and Other Agricultural Chemical Manufacturing 308,373 1.01%
323 Printing and Related Support Activities 297,223 0.97%
33311 Agricultural Implement Manufacturing 282,526 0.94%
333210 Sawmill and Woodworking Machinery Manufacturing
333294 Food Product Machinery Manufacturing
910 Waste and Scrap 240,078 0.79%
321 Wood Product Manufacturing 211,379 0.69%
327 Nonmetallic Mineral Product Manufacturing 170,370 0.56%
322 Paper Manufacturing 150,441 0.49%
337 Furniture and Related Product Manufacturing 130,167 0.43%
324 Petroleum and Coal Products Manufacturing 68,004 0.22%
314 Textile Product Mills 59,393 0.19%
312 Beverage and Tobacco Product Manufacturing 40,475 0.13%
313 Textile Mills 35,385 0.12%
212 Mining (except Oil and Gas) 29,454 0.10%
113 Forestry and Logging 26,385 0.09%
920 Used Merchandise 18,225 0.06%
316 Leather and Allied Product Manufacturing 13,901 0.05%
315 Apparel Manufacturing 11,778 0.04%
980 Goods Returned to Canada 9,360 0.03%
511 Publishing Industries (except Internet) 1,242 0.00%
211 Oil and Gas Extraction 128 0.00%
114 Fishing, Hunting, and Trapping 54 0.00%

Note: Shaded rows indicate an agricultural industry sector. See endnote number 6.  
Source: IBRC, using data from the Office of Trade and Economic Analysis (OTEA) and USDA Economic Research Service


Concerns may still linger about Indiana agriculture’s trends, but the data show that agriculture is indeed an important (and growing) sector in our state economy. Although it employs a small share of the workforce, its output is quite impressive and has a strong impact on the state’s export values. Our agriculture industry is diverse and dynamic, thus we expect to see the industry’s output to continue its growth in the future whether it be through specialty or mainstream agriculture paths. Through consumer support, Indiana agriculture can continue to flourish and enhance our state’s economy.


  1. Data on Indiana agricultural occupations came from the Indiana Department of Workforce Development (IDWD) for years 2005 through 2008. These data do not include sole proprietors, which would include a large percentage of farmers, and it does not include retail agricultural occupations.
  2. This assumption is determined by adding 36,343 (the number of farm operators from the Census of Agriculture) and 132,485 (the number of agricultural workers in 2007, according to the Indiana Department of Workforce Development).
  3. C. Dobbins and K. Cook, Indiana Farmland Values and Cash Rents: Relative Calm in a Turbulent Economy, Purdue Agricultural Economics Report, 2009, www.agecon.purdue.edu/extension/pubs/paer/2009/august/dobbins.asp.
  4. E. Ball, Agricultural Productivity in the United States: Data Documentation and Methods, Economic Research Service, USDA, 2010, www.ers.usda.gov/data/agproductivity/methods.htm.
  5. U.S. agricultural exports, by leading states: estimated value by commodity group, FY 2008. Compiled by the Economic Research Service using data from USDA’s National Agricultural Statistics Service and U.S. Department of Commerce, Census Bureau.
  6. Data for this graph come from the Office of Trade and Economic Analysis (OTEA) and the USDA. These two agencies have different methodologies on gathering agricultural export data, with the USDA’s data showing a more robust picture of Indiana’s exports. Therefore, NAICS 111 and 112 utilize USDA’s data while the remainder of the data come from the OTEA. There may be a slight overlap in data in NAICS 111 and 112 with 311 and 312, but it was assumed to be minimal due to the low value of exports for dairy and tobacco products.
Tanya J. Hall
Economic Research Analyst, Indiana Business Research Center, Indiana University Kelley School of Business