I'm a hobby farmer with small annual income. Because of depreciation, I see a small loss each year. Will this loss continue to accumulate year over year?

[JamesG1]

You are correct.  The depreciation will accumulate over the years.  However, the IRS requires that the depreciation be ‘recaptured’ upon disposal of the assets.  That is why TurboTax maintains a record of assets and depreciation.

Do you report income and expense on 1040 Schedule F?  Or somewhere else?

If you are reporting on 1040 Schedule F, the losses can offset ordinary income from wages and investments.

There is always the concern that the IRS could question the business purpose of the business.  See this TurboTax Help.