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Tuesday, January 22, 2013

Consolidation in Farming

I freely admit to being a bottom feeder.
I admit to an unhealthy level of cynicism.
I also admit that once in college we stole a whole bunch of road signs and attempted to route traffic from 99W through the driveway of the college president. (The plan would have been more effective if we could have found more road signs and it was not 3 a.m.)
With these disclaimers I direct you to an article in The Farm Urinal, "Grain Farms Consolidate," and I offer several comments.
Consolidation is aways bad in the long term. Consolidation means less competition, less profit, less choice, and fewer skilled jobs.
The writer of the article notes the savings of time, money, and energy. He uses an an example, how much less water it takes to grow a pig on a modern factory pig farm as opposed to the old style small pig operation.
American farmers have this idea ingrained into their very psyche, into the core of their being, that they as an individual, are the exception to the rules. They believe that with hard work and being just a little clever they will be the 6,000 acre farmer and with that basis of belief they can natter on about capitalism and free markets and competition and never figure out that it may not actually be capitalism or free markets and that competition is great when you are on the winning side.
I am watching a cycle in the straw business.
There is a lot of grass seed raised in my area. At one time the left over straw was a waste product. Some clever folks figured out you could export that straw to Japan where they have a surplus of protein and a shortage of roughage.
Various economic forces have conspired to push the price of straw to unheard of prices, and the consolidation is in full swing. People like myself with one or two balers have discovered that the price of friendship is whether you will lie about $10 per ton.
The wheeler dealer straw balers who put us out of business are in turn being put out of business by the farmer who is buying his own big baler.
The farmer with the baler thinks he will make a lot of money, but he in turn is up against those who make their business from dealing in commodities.
The price most likely will crash but the farmer with the baler will continue to bale for less money because he can afford to do it. So, the straw price will go back to a previous lower level and the farmer will be making the same amount, or less, from his straw as he did back when someone was baling it for him. The difference is that he now has more work to do and I am out of the straw business.
I can tell you from experience that 20 small baler operators bought a lot more baler twine, baler parts, oil, and nuts and bolts locally and they hired local kids. AND when they sold their tractors and balers it meant bottom feeders like myself could have a great time at auctions and used equipment lots, looking at what they had traded in.
I could continue on this line but I have to go haul some buckwheat. I would make a joke about alfalfa but I suppose that one has been pretty much worn out.
Have a nice day...

10 comments:

  1. I will never understand why someone would want to farm 6,000 acres, anyway. I want to farm, not drive around and supervise employees. I read that same consolidation article and wanted to punch the smug looking guy that wrote it.

    ReplyDelete
    Replies
    1. Ben, I also belong to the class of farmers who like to farm. I want to see the seed grow, have a few cows, work moderately hard, split a little firewood, the basic old farmer lifestyle without brutally slaughtering pigs or cutting the heads of chickens with an ax. If I wanted to manage employees or trade commodity futures I would have got a real job.
      I really wish I could focus on farming at home rather than doing custom work all over the county to survive. But that is the farm economy that leads to farms over 1,000 acres in size.

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  2. This is all so familiar except that here it is the 6000 acre farmers that are worried about being swallowed up by the big corporations. Actually maybe not since the recent skyrocketing farm land prices are making selling out and retirement a pretty attractive option for some. Its coming. Little old thousand acre farmers like myself will soon be history and the land will be owned by investment corporations and grain companies. Worked by employees (former farmers in some cases) who have not a care about rain, hail or frost, or the next mechanical breakdown. Just when the next pay cheque comes in.

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    Replies
    1. Ralph, you pretty much hit the nail on the head. I would say that skyrocketing land prices will encourage farmers to sell out and the land will be bought by outside farm interests. People or corporations with deep pockets and it will never go back to individual farmers. Sort of a lord/serf relationship. You already see that in the poultry and pork business.
      Also, I should point out that your 1000 acres might translate to 500 acres in one area or 2000 acres in another. Land types have an effect on farm size that is outside of what I was talking about.

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  3. . In the 1960s the chicken and broiler industry went through a period of consolidation, [Factory genetically engineered chickens that can't stand up} followed by the cattle feeding industry in the 1970s, {nothing quite like a feed lot with cattle standing and dying knee deep in shit} the swine industry in the 1980s and 1990s {crated sows} and the dairy industry in the 2000s. {The smell downwind, nuff said}
    I think people are wising up and starting to buy healthy and local from small farmers again. This guy is nuts. I'll be 2nd in line for a punch!

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    Replies
    1. MuddyValley, I think you are wrong if you look at the big picture. The huge farms eliminate a lot of individual jobs and small businesses and so really kill off small towns. The market for ethnic foods and health and local will only exist around population centers. I think it will be the death of the midwestern small town.

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  4. Really I like your blog.... it's an excellent blog post found here... your blog contains very unique and very interesting information, Thanks very much for the share. Teenager auto insurance

    ReplyDelete
    Replies
    1. Maylene, I am happy you enjoy my blog but I suspect that there are very few of my readers who need auto insurance for their teen drivers. Especially as my readership seems to be mostly made up of grumpy farmers who drive international pickups and would probably frighten teenagers with threat of actual physical labor.

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  5. I'd like to find the December 1999 copy of that rag. Feature article was a social and economic comparison between then and fifty years earlier in a particular midwest farm community. Made 1949 look pretty good.

    Speaking of journalism, there used to be an irregular periodical out of Orygun that occasionally awarded, or at least offered to award, the prize of 'a punch in the nose buster'. A Punchinthenosebuster should be up there with Pulitzer, Peabody, and Ig Nobel.

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    Replies
    1. Collieguy, funny how the towns just fade away. But I suppose that is progress. That irregular publication in oregon has been consolidated, into the bottom of the bird cage. RIP I suppose.

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