Large farms significantly more efficient with labor, study finds

A new study shows how much the size of a farming operation affects labor needs. 

For crop farms, the number of labor hours per acre drops significantly the bigger the operation is, according to the Purdue University study, using the FINBIN farm management database. 

Farms with fewer than 500 acres average six hours per acre, according to the study, which used data from 2007 to 2024. Farms of more than 2,000 acres average 1.7 hours per acre. For farms of 500 to 1,000 acres, the average labor requirement is 3.3 hours per acre; for 1,000 to 2,000 acres the average drops to 2.3 hours.

The study also measured “labor efficiency” by dividing total labor costs by gross farm income, and the results were similar between large and small farms. 

“The labor hours per acre and labor efficiency results … suggest that there are economies of scale with the use of labor on crop farms,” says a study summary.