What is the best farm economy?

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Logan52

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I grew up believing the "free market" was the ideal goal for the farm economy, that over time growing demand for farm products would bring prosperity to the farm. Under this scheme, free trade would allow us to feed and clothe the world.

Now, after nearly a lifetime of watching higher yields and more production destroy prices and not increase profit for the farmer, I am wondering if maybe I have been wrong all along. Our region has changed from one of prosperous small farms to a kind of rural housing project for low income druggies.

Maybe farming needs something like the old tobacco program that regulated both prices and production. Times were certainly better back then for the average farmer.
 
they all seem to be doing pretty good around here with there 300k+ tracked tractors pulling 100k+ tracked grain carts
 
The production of food is of vital importance to our country (and the world). It is of such importance, that it may not necessarily lend itself completely to the free market model.


Imagine, if people got in and out farming based on when there was and was not a profit in it. We may find ourselves with periods of time without a steady supply. Chaos would follow. The kind of chaos we don't need.
 
HDRider":2vpo7und said:
Logan, are you suggesting it is a free market now, or was a free market then?

As long as there are welfare programs for farmers, the free market will never properly exist. BTO's use the programs to subsidize their overproduction which depresses the price for everyone. They can farm 160 aces and take a loss on the resulting crop if it means the extra production and size of the operation looks better on the asset balance sheet for the banker.

You must realize that 90% of BTO's are one nervous bank manager away from bankruptcy.
 
The little man is gone in the US of A. Alan Jackson wrote a great song about the process. I hate to say this but If you don't want to play the game your going to get left behind in the agricultural industry.
 
In this day and age a farmer produces a ''product'' that is priced on a world wide economy. When a poultry producer in the SE will buy wheat from Europe because the freight rate makes it more cost efficient,it tells that money is what makes things happen.
 
There is no "farm economy" the trade is propped up with government support, and run by a couple of companies. These big controlling companies need to be broken up. The small farmer is more efficient, produces more food per area than a "BTO". 70% of the worlds food is still produced by small farmers on farms that are less than 50ha in size.
 
1wlimo":2w5t9yc6 said:
There is no "farm economy" the trade is propped up with government support, and run by a couple of companies. These big controlling companies need to be broken up. The small farmer is more efficient, produces more food per area than a "BTO". 70% of the worlds food is still produced by small farmers on farms that are less than 50ha in size.

Your point about efficiency is something I never considered, but is obviously true. Good post.
 
Are we talking "Farming" or "Ranching"? Allot of folks still do both because they enjoy it and just keep on doing the same thing regardless if it is profitable or makes sense. Both are hard businesses to thrive in but like any other business there's always winners and losers. Efficiency is key now days. I figure the subsidies are there to keep food prices low but who really knows the reason.
 
I think there is some confusion here because most farmers who grow food do not receive any subsidies and do work on the free market however most all farmers who grow commodity crops receive subsidies and price supports in some form.

What makes one crop a commodity and another a "specialty crop" seems to depend on the amount of government control. To me, it seems a crop is more prone to be considered a commodity if further processing is required which results in increased employment due to its further processing and manufacturing. Milk, like cotton, is considered a commodity but just try and sell milk in the free market and see what the government will do to you. But if you want to grow a hundred acres of okra the world is yours and the government won't say a word. Or try and sell some packs of hamburger from the calf you butchered at your barn.

I don't know the answer but it seems to me that with commodities the government is concerned about providing the larger employers with a cheap raw materials to work with and this was probably a good thing when our country had cotton mills that employed thousands of people who produced cloth and clothing for sale here and for export but now that we send the bulk of these commodities overseas to be processed and shipped back to us as a finished product it doesn't make as much sense. But like it or not, when you feed a commodity such as corn or meal to your cattle your bill is being subsidized.

I don't know the answer but its just something to think about.
 
I believe that small businesses are done. Here in SC KY tobacco is gone. Most every small farm grew tobacco. Hogs, no market except direct to consumer. Who asks for organic,non gmo, but wants it cheap.chicken,same. Small dairies, gone. Small beef farms are dwindling down as older farmers die or quit. Every small community had country stores. Only ones left sell beer. Our Neighbors grow organic veggies for CSA 100+ miles away. They are doing tourism( visit to the farm school groups) to make it work.
 
Logan52":40on62lz said:
I grew up believing the "free market" was the ideal goal for the farm economy, that over time growing demand for farm products would bring prosperity to the farm. Under this scheme, free trade would allow us to feed and clothe the world. Now, after nearly a lifetime of watching higher yields and more production destroy prices and not increase profit for the farmer, I am wondering if maybe I have been wrong all along.

Yes, you are wrong. Free trade is a theory. Feed the World is a scam. The chemical companies and traders get a lot of the profits.

1) Recently production has gone up faster than demand for most commodities. Thus lower prices... There are some dooms day forecasts out there where resistant weeds devour the developed world but I am not worried, yet.
2) Even with a commodity that is break even on average, there are some producers making a decent profit. You don't here about them very often but they are out there. Benchmark them.
3) There are always some regulated or niche products that are high margin. The last one I heard of was growing pot on Indian reservations outside of the state regulations. :cowboy:
4) I have been working some manure + public seed based scenarios. Looks like a workable rotation for moderate productivy land and livestock operations that can not expect to produce record yields on large acreages.
5) I think the best farm economy is where people will pay for quality local food. Not "organic" veggies from China, cheap yellow corn from the I states, and taco "filling" from a factory.
 
kickinbull":2phfkt52 said:
I believe that small businesses are done.

What's the old saying if you want to stop something you need to regulate it. Forgot who said that but its the truth.

I like the idea of farm to table and think this would do wonders for small businesses. I crunched numbers and found for me the best farm economy would be farm to table meats. Returns were very enticing. I have one buyer willing to purchase 75lbs of burger a day but regulation throws a monkey wrench in the whole idea. Playing by the rules sucks the profit out of the idea but barring the regulations I could make a nice living just off this one thing not to mention that I might even create a few jobs.
 

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