Vegetable and melon production is among the more financially successful components of U.S. agriculture, according to a report from the U.S. Department of Agriculture's Economic Research Service.

While much of the study focuses on financial ratios and solvency, "Financial Characteristics of Vegetable and Melon Farms" also details how vegetable production has become increasingly concentrated.

Vegetable and melon farms that produced less than $40,000 worth of commodities (small farms) per year made up 67 percent of these farms yet accounted for just 1 percent of the total value of U.S. vegetable production. But, the report noted:

"Although relatively minor on a national scale, the output of these farms serves a niche of growing importance in local markets. These small operations, many of which are limited by climate to short growing seasons, help meet the demand of retailers, restaurants, and farmer's markets for locally produced vegetables and melons."

The report concludes that the outlook for specialized vegetable and melon farms remains favorable and may have improved with passage of the 2008 farm bill. Increased efficiency and rising market demand are expected within the sector.