If you factor in all the costs, without some sort of specialization the small farmer just does not have the economy of scale to stay profitable. Much like the small mom and pop stores of a generation or two ago. However, I can see the small land owners that rent out their ground, or farm for their own recreation, continuing for generations into the future.
One thing that hurts the small farmer is intense competition with other small farmers. It seems whenever a commodity or a livestock becomes truly profitable, small farmers try to jump into a good thing too late and bid up their input prices back up to break-even levels, pricing out any chance of making a profit.
Some legislation intended to help small farmers can kill rural communities, especially the property tax relief. As property tax costs are shifted to rural homeowners and businesses, many move away, schools consolidate into the larger towns, more local stores close, and too many rural communities are becoming "counties in distress" or "rural ghettos".
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Today's Featured Article - Fordson Model N: Field Service Operations and Lubrication - by Anthony West. The daily or weekly servicing of any vehicle is of the utmost importance, and in days gone by when our favorite tractors were doing an important and Commercially vital job on the farm, these service operations would make a major difference to the running costs and economy of the farm. This being so, it surprises me to see how many enthusiasts attending rallies, shows etc, seem to be unaware of the importance of this constant attention. Possibly the modern machine with its 6,000 mile or even once
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