Monday, January 17, 2011

The Cost of Farming ...

I've been thinking a lot about the cost of farming lately. Today it was on the front of my mind because I placed another feed order and picked up some cracked corn while I was there ... a 50 lb bag of cracked corn is now up to $6.30. That is a considerable amount more than the $4.25 or so that I was paying the the middle of 2010. Of course that is only one part of the cost of farming. Besides feed there is water, electricity, mineral or other supplements, and on and on and on!

But, the costs don't stop with just the livestock care on the farm. It seems like everywhere I turn I am buying something. Part of that is because everything on my farm is here for the very first time ... that means that I have a lot of first time expenses. For example I just went and purchased a bunch of heat lamps. There will be times that I need to replace one or two at a time in the future, but I won't need to buy a bunch at once until I expand or add to the farm in some way. The reality of it is though that having a farm means having an inventory of certain things on the farm ... no matter how low input your farm is. You'll always need bolts, nuts, screws, nails, fence staples, tools, wire, twine, water tank plugs, hoses, extension cords, and of course the list is endless!

The one cost though that I've been thinking about the most though lately is the intangiable cost of my labor. Running a farm, beginning a farm, or just working on someone else's farm can be mentally and emotionally exhausting (as can about any other job). But, when I combine my farm work with 60 hours (or more usually) in town and special weekend youth events that pop up fairly regularly my time becomes more precious.

It's the intangiable's like time and when that time takes place (meaning I do a lot of work after 10:00 PM that really starts to add up. But, I'm committed to the farm. I'm committed to the idea that something special can happen on 40 acres ... I think that I can work out a system that produces great meat and restores the pastures and the soils ... I think that it will work. But, there is and will always be a lot of "costs" associated with farming.

If I ever wrote a book for beginning farmers I think some of the "costs" is something I would cover. What are some of the "costs" you experience that sometimes get overlooked?

22 comments:

Steve said...

Excellent thoughts. With all of those heat lamps comes the added electrical bill to run them. Diesel fuel is outrageous as well, plus maintenance to keep the equipment running. If you don't do your own maintenance/repairs, then the added cost at repair shops. The list goes on and on.

Anonymous said...

I don't usually comment but I see you have a wife and 3 kids. With all of your town hours, weekend events and evening work it sounds like you are quite busy. Your vision for farming is great and noble but make sure you are also commited to your family and that farming doesn't cost you your family too. I know from experience that the years the kids are home disappear faster than you realize and when they leave you realize you are married to a stranger.

colliefarm said...

I agree, I think that's why thought leaders like Joel Salatin emphasize how important it is that we have good business heads about us, because we could allow ourselves to be consumed by costs otherwise. I am constantly amazed by the expnenses, especially when I consider each one in the context of a $200 lamb. Just got my lambing supply order- $400. So, that's two lamb's worth. Winter feed costs can make next season's lambing income seem soooo far away!

For me, I can see why a lot of farmers "make do" with things- for instance, a free old bathtub rather than buying a new $85 plastic water trough (which may break!); or making a drag harrow out of an old bed spring rather than buying a newly manufactured one for $200. I don't like having a "junky" looking farm, but boy, it's expensive to have a romantic- and pastoral-looking one that only has nice-looking equipment! :-)
Michelle

Alan said...

Dear Ethan,

I will discuss the "Hidden Cost" of farming which are getting higher every day.

I am not now a Farmer, but I was a Farm Kid in Northeast Iowa for the first 21 years of my life.

As I observe my fellow citizens today I am aware that they are generally interested in getting the most food for the least amount of money expended.

Now you know why "Food Buffet Outlets" flourish. They do especially well in the 8th Congressional District of Georgia where I now reside. This District is know as the most obese and also the most uneducated Congressional District in the U. S. A.

Now, as a society we want plenty of food at the least cost; as I stated above.

Rather than maintain a healthy lifestyle the majority of our fellowpeople kind desire to simply eat, and eat some more.

I used to eat a lot, but I finally learned that I am not now an Iowa Farm Boy working from sun up to sun set. In the last year I have gone from 215 pounds to 183. I feel better for it and I still enjoy good tasting food. I do not obtain groceries or any other items from the Big Box known as Wal-Mart.

I maintain a healthy lifestyle at age 70 and look forward to enjoying life for a long time in the future. Admittedly I do not know what our Creator has planned for me; but I will certainly do my best to be here as long as possible.

I still enjoy tasty food, but I do not have to eat as much.

What has this to do with the Cost of Farming you may ask?

It directly relates to the prices you get for your products.

If our Nation's Wholesalers and Retailers can get food items from overseas to meet the demands of the hungary U. S. A. Consumer at a cheaper cost they most certainly will. Thus, you and all the Farmers in the United States Suffer because the American Consumer demands cheap, but not necessarily healthy food or food that is good for them.

Just the other evening the News Media did an expose on "Catfish Farming in Georgia."

The bottom line was that fast food outlets could obtain their fish from overseas at a much cheaper cost so you can guess where they got their fish from. In the meantime, young and old Catfish Farmers in Georgia are going out of business.

Thus the hidden cost of being a Farmer.

Until realize that we need to support American Agriculture and not simply consume the cheapest food to expand our already expanded bellies at even higher health care cost in the future; you the Beginning Farmer and all other Farmers in the U. S. A. will slowly be put out of business.

All of this driven by the uninformed American Consumer who wants to eat a lot at a cheap price so that they can buy other stuff to cram into their homes so that they look like they are living the good life.

Now, I know that this is a rather long comment, but I certainly feel that someone needed to say it.

I wish you well and please be aware that their are many like me who appreciate your dedication to being a young farmer. I have plenty of kin in Northeast Iowa who are facing the same challenges that you face.

I wish them and you well in the future. Just maybe, hopefully there will be enough informed Americans in the near future to realize that we can not continue as we have in the past forty years.

Alan said...

The hidden cost of farming are caused by U. S. A. citizens who desire the most food at the least cost so our Wholesalers and Retailers obtain food items from overseas. All at the expense of our current farmers.

I wish you well. I also hope that in the very near future we as a Nation wake up and realize that cheap food will only continue to contribute to our Nation's obesity problems as well as stiffle our potential to feed our selves in the future.

John Schneider - Gold Forest Grains said...

I hear you. Right now, at this time of year the bills are coming in and nothing significant in terms of income. It gets depressing at times to see the costs of farming and the resistance to the proper payment rates for the produce we put to market.

girlonafarm said...

Books! There are so many great books out there on everything from managment intensive grazing to milking the family cow that it got expensive for us very quickly. The internet is a great resource, but there's just something about having your own reference library.

Valley View said...

$6.30 for a bag of cracked corn - that's crazy, I'd pay $26 here in Australia. You guy's really don't appreciate how lucky you are. But your country really needs to get a grip on the real value of production and stop relying on farm subsidies.

cheers

Martyn

Walter Jeffries said...

Wait a minute. I thought farming was so we would save on all those gym fees! :)

Donna OShaughnessy said...

The cost of experience. Our farm continues to evolve into new niches to better meet our customer needs. I wanted to add soap to our farm store. In addition to supplies I had to take the time to read, to view (youtube) to ask questions. Each batch takes less time as my knowledge increases. Yeah the cost of EXPERIENCE. !

Yeoman said...

"It's the intangiable's like time and when that time takes place (meaning I do a lot of work after 10:00 PM that really starts to add up. But, I'm committed to the farm. I'm committed to the idea that something special can happen on 40 acres ... I think that I can work out a system that produces great meat and restores the pastures and the soils ... I think that it will work. But, there is and will always be a lot of "costs" associated with farming."

On time, those analyzing farm economics often try to throw that in, and we're acceptive of it as we're so used to that concept. "Time is money", we hear.

I haven't looked into it but, except for a few trades, I don't know that this concept has always existed, or that it makes sense. "A lawyers time is his stock and trade" is an often quoted Lincoln statement, and it's part in true, but that's because we generate an intangible in some ways. That is, a lawyer's client is often paying for knowledge, and that's difficult to pour out and measure.

Anyhow, I'd bet for most occupations "dollars per hour", ie., time, wasn't used as a measure of work until very recently. It almost must be a product of the assembly line culture, as it's an assembly line means of paying a person. The quality and even the quantity of work isn't measured by a "time is money" analysis, the mere time working is. But, if you employ a bunch of folks, that's the easiest way to do it.

Before that, I'd guess most laborers were paid by piece work. Most artisans by their product, including farming artisans, and many others (including often lawyers) by set amounts. Indeed, even today, I charge the same amount for some legal products irrespective of time.

My point, I think in some things, like farming, time isn't money really. Your time is still your life, of course, but perhaps it isn't money.

Steven Romero said...

"I'm a great believer in luck and I find the harder I work, the more I have of it."

-Thomas Jefferson

"Keep truckin'."

-Steven Romero

John said...

The cost of farming is not going down - but Home Grown Cow could help farmers keep some of the retail value of their meat. Please check us out - we're trying to help independent farmers be successful in an increasingly difficult industry: http://www.homegrowncow.com/?src=tbf It's totally free to sign up - let us know what you think!

Thanks,

John

carpenterwilson said...

Ethan,

Like you we had a lot of start up costs. Last year at this time, our farm was 18 acres of corn stubble, surrounded by more grain fields. Now, we have a good farm fence and 18 acres of pasture that produced a fairly good crop of hay this past summer. We also struggle with the winter feed costs. They never seem to end.

Emmett said...

Oh man... how about just the cost of not being able to sleep because you're thinking about all the things you need to do the next day, or wondering whether you turned off the irrigation in that one field, or worrying that the fox/skunk/raccoon/coyote might be prowling around the livestock outside.
Farming takes over your whole life in the sense that it's in your body and mind 24 hours a day. This can be a joy, but it can also sometimes be a burden.
Thanks for the thought-provoking post.

wisdomoftheradish said...

I completely agree! Animals, for us, have been the most expensive part of the farm when starting up... First you have the cost of the shelter (even DIY & using whatever wood you can salvage, hardware and lumber costs add up quickly), and fencing... then the breeding stock (good breeding stock = expensive), the feed, and finally, the protection. We have two livestock guard dogs in training and I don't even want to say how much they cost! (We tried Great Pyr rescue but around here rescue organizations don't like their dogs to go to working homes. Sigh.) And of course, they have to eat, too. Our Homer eats about 40 pounds/month.
-Lynda

Frank van der Hulst said...

Hi, just wanted to let you know that I enjoy your Blog. We are more or less in the same situation (new farm, 40 Acres, 5 young kids) and I do recognize many of the themes and situations you're dealing with. Keep on going! Regards, Frank van der Hulst

Walter Jeffries said...

I think it is the factor that you're ending up doing so much of your work after 10 PM that is the real killer. Working in the dark makes things slower, more dangerous, harder and depressing. The sunlight time feels good to be outside and is one of those joys of farming. Hopefully you can move your schedule to outdoors more in the future. I feel for you. You gotta do what you gotta do to get from here to that point. Keep on keeping.

Stephanie said...

We were really excited to undertake a huge soil adventure in importing various mixtures of vermiculite, peat moss, and five different forms of compost to make the perfect soil. We realize on such a small scale for us and our urban gardening projects how much more it cost than we had projected. I can only imagine the costs of livestock on such a larger scale. Love reading about your adventures!!

Zev said...

I wholeheartedly agree with your comments about how hours worked after 10pm seem to add up. I think the biggest cost for me in getting more animals (and right now I have just a few chickens) is the loss of mobility. It's harder to just take off for the weekend -- who will put up the hens at night when the fox comes out, and feed them in the morning?

David N said...

Thanks for the post Ethan. I would be curious, just to be optimistic as to what are some of the benefits of farming for you. There is always a certain amount of "risk" involved in business, whether it be time, money, or intangible things. When determining the risk of an operation, new livestock, or new business, what are some of the reasons you take those risks? Although my farm is much smaller, I have had to house chickens and rabbits in my house because of lack of time and money, but the risk had a great reward in my mind, fresh eggs and a start to our pastured rabbit business. The crazy thing about farming is the length of time until we see return on our risk.

I am curious, how does your family fit into all of this, what is your vision for your family along with your farm. I know for me I want a place for my children to grow up and learn to work and enjoy a close knit family full of love and Godly desires for life. I highly recommend watching some of the Franklin Springs Media (http://www.franklinsprings.com/) movies about moving back to the land and the blessing it can be. (especially this one for fathers, http://franklinsprings.com/allfilms/a-journey-home.html).

Please dont think I am trying to tell you what to do, just trying to be encouraging since I believe in what you are doing, and am just curious as to more detail of why. God bless you and remember that his mercy's are new everyday!

Running Creek Farm said...

Lots of great comments! Our family runs a vegetable farm in upstate New York. Yes, we have lots of farms in NY...over 7 million acres of farms I am told. I married into this business of farming..coming from a "comfortable" family lifestyle in Long Island. I rode and showed horses and wanted a horse farm. My husband's family has been farming since 1908. We've been married for 23 years and have a wonderful daughter who is a farm gal through and through. While farming requires many long hours, it has afforded us the opportunity to be home with our family. Our daughter is very mature for her age and well disciplined with a great work ethic. I feel that many farm kids are like this as they are taught to share in the work for a common goal and that we all depend upon each other. The fact that she is with us most of the time and we always know where she is, is another huge benefit of farming life.
There seems to me to be an overwhelming amount of expenses for which I am in shock of regularly. We rarely see a rise in returns on product. The fact that we have such a short growing season as well limits our cash flow. We are now growing greens in hoop houses to extend our season.
Brokers (not all but there are many) have no problem telling farmers their produce was dumped, only to have really sold it out the back door. It is normal practice with the larger wholesale markets to accept produce from a farm on an open invoice since ag prices change daily. We could deliver 100 gorgeous bushels of green beans and receive a return slip back for 50 sold at one price, 25 sold at another price and 25 dumped, resulting in payment for only 75 bushels. In addition there are commissions, handling fees and dump fees taken out of our check. That does not account for the cost of seed, fertilizer, irrigation, labor and shipping costs. I'm amazed also that we are "lucky" to get $1/head for cauliflower, yet it is sold in the grocery store for $3 to $4 a head. While each enterprise has it's own costs, it is the farmer that burdens the largest cost and risk. We are at the mercy of the weather. Equipment costs are huge. We do all our own mechanical work and there is always an inventory of parts and hardware kept, since new parts are either hard to come by for certain models or the cost is prohibitive.
My husband told me that tractors that cost hundreds of thousands of dollars in the U.S. are sold for next to nothing in other less developed countries. So yes, it costs less to raise ag products in other countries than it does here.
Cheap food from overseas. Hidden costs. How about all the regulations on pesticides and the like that exist here but not in other countries and then the produce is imported back to the U.S. It's scary to see the amount of produce in the local stores that come from other countries. Years ago, we ate what was in season. Nowadays, consumers are used to having instant gratification with the availability of all types of produce year round.
Land taxes are another issue, especially here in NY. While we have an "Ag Assessment" to offset the taxes, we are still appraised at full market value; taxes are very high.

There are so many issues tied into one that we could go on and on. Please don't think I am dis-satisfied with our life. I love our farm, no matter how difficult it has been over the years. And yes, there have been many times where I've nagged my husband to take some time off, but the crops won't wait and don't grow on our schedule. We have to "make hay while the sun shines," so the story goes. I love the local food movement going on now and I believe we farmers all need to work together to educate our communities and provide the best food possible in order to sustain our lifestyle and hold onto the farms we have.

Best of luck to you and your family Ethan. Keep doing what you are doing. It's tough at times, but a wonderful life.

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