Friday, March 27, 2009

I Overheard a Converstaion

Last Friday I stopped at the tail end of an auction just to see what a few things were bringing and because I was in the area. I wish I had been there the whole time because some of the stuff selling would have come in really handy, but really it is probably for the best because then I didn't spend any more money. There was one very interesting thing though that happened at this particular auction. As I was standing next to a small 12 foot tandem Case disc I overheard a conversation between two farmers ... I found the conversation very sad. Here is what I heard:
Farmer #1: "This is a nice old disc, it reminds me of the old days of farming"
Farmer #2: "Yep, this probably came to the farm the same time as that (John Deere) 530 along with that three bottom plow and two-row picker."
Farmer #1: "Those were the good days when a guy could get started in farming with this smaller equipment."
Farmer #2: "It would probably be better if it was still like that, especially for the younger guys. The young guys can't even get into farming now because it costs so much."
What are your thoughts on that conversation? Whenever I hear things like that I am always amazed at that there are so many farmers out there that realize our system isn't the best, but it is like we are so deep into it now that there is no hope of digging out. I for one do think a guy could do it with a small line of machinery if only they had the land base paid for ... but, therein lies the problem.


Jilann said...

I've e-mailed you a couple of times re: the book I won but don't know if you've received them. I know you're very busy so I'm in no way nagging/rushing. Just making sure you know where to send it when/if you get the time. Thanks

Rich said...

"...The young guys can't even get into farming now because it costs so much..."

If somebody bought the equipment at this auction, I would think that they could use it to farm the same way that it was used in the past. (unless a bunch of collectors were present)

It would be interesting to know what the entire package (disc, plow, picker, planter, etc.) sold for, so that some calculations could be done to determine how long it would take to pay off the initial investment in equipment.

It seems kind of ironic that the discussion would turn to how hard it is for young farmers to afford larger equipment while they are in the midst of the sale of some smaller equipment (of course, I assume that the equipment was somewhat 'field ready')

Anonymous said...

It would be interesting to see some charts of historical data re: equipment costs, land costs, maintenance costs, avg. yields, crop prices, tax liabilities, govt. subsidies, and avg. debt held. Then try to determine what one would require in order in terms of capital (now and then) to Net 30K per year inflation adjusted and what type of farming or mix of farming (livestock, cash crops, organic) would most likely produce that income.

My grandfather and uncle both farmed 100 acres in Upstate NY but in both cases their wives had to work in order to make ends meet and that is as far back as I can remember (late 70's). Seems reasonable to me that if could not make a living 20+ years ago (a modern sense of living anyway, not that I think it is a good way to live) on 100 acres I would guess it is just as hard today.


Anonymous said...

Farmer #1: "Those were the good days when a guy could get started in farming with this smaller equipment."
Farmer #2: "It would probably be better if it was still like that, especially for the younger guys. The young guys can't even get into farming now because it costs so much."

Its so hard these days for younger farmers' to get into the business, much less have a chance at making it a full-time job/dream.

Pick up a Fastline catalog sometime, and flip through the price of equipment these days. 180k combines, 75k tractors, planters that will plant 100 acres an hour, etc, etc.

As our economy of scale has gone up for the big guys', its gotten harder and harder for anybody to join the ranks of farmers these days due to the sheer capital investment needed. The sad part of this is this phenomenon has only occurred in the last 50 years.

Less than 1% of people in the US claim the occupation of Farmer these days, and less than 3% of that number is under the age of 45.

The economies of scale, combined with the market prices - pretty much won't allow you to make a living farming without having 1000+ acres (unless you diversify, direct sell, or find a niche market, but that's another story altogether).

Nobody would want to run our farm with a 75K tractor, or 200K combine - when we're only 65 acres. But my 1952 Model 45 John Deere Combine may be ancient, but its perfect size for our farm, as well as renting the neighbor's fields. Plus I can pick up another one for spare parts for around 3-4k these days.

Some days I feel like I'm farming in 1952 with all the ancient equipment I have, and while I can't make it a full-time job due to the economy of scale, its done with love of the land that's been farmed in my family since my Great-grandpa in the Depression with horse-drawn equipment.

Some things are done for more than just money. I wouldn't give this up for anything.

Ethan Book said...

Rich and Anonymous - I think the key here isn't that the equipment isn't available, but rather that land becomes the limiting factor. I do you think you could make it work with a small line of equipment and a diversified farm that includes feeding your crops to livestock on your farm, but if you were starting from scratch getting the equipment wouldn't be the problem. The problem would be getting the land. Like you said Anonymous, 100 acres didn't cut it for your family members and I agree that it wouldn't be enough today (unless you did diary maybe?).

To me $5,000 - $8,000 per acre land is the limiting factor, then people feel like the need more to make money and when they have more they need bigger equipment ... it is a vicious cycle.

Anonymous said...

Interesting post @ Front Porch Republic.

I was blessed to work along side my uncle and grandfather almost every summer growing up. I honestly wouldn't trade a million dollars for those experiences.


Jena said...

My husband and I are the only young people I know starting out in crop farming without inheriting any property or working alongside relatives. We purchased 74 acres and farm with a JD 70, a JD 4010, some older hay equipment, and several smaller "raking tractors". What makes it possible for us is great neighbors that allow my husband to help them in the field in trade for us using their harvesting equipment. Plus, we both hold full-time off farm jobs.

We are already being faced with the decision of whether or not to buy more land. Going rate would probably be between $3500-$5000/acre. We will also have to decide whether to buy out our neighbor within the next 15 years when he retires. That would be a huge investment to include his equipment and lease his ground.

For someone who hates debt (like me) this is a very discouraging venture. I do see some potential but I'm skeptical.

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