Who is Right?

Here is another article that you can chalk up to the "it depends on how you look at things" card. From the Global Development and Environment Institute at Tufts University we find the article, "Boom for Whom? Family Farmers Saw Lower On-Farm Income Despite High Prices". This report seems to run contrary to the findings from the USDA about the 2008 crop year and how the high commodity prices effected farmers. As you can guess from the late post today I don't have a lot of time, but I encourage you to check out the report.

Here are a few quotes I pulled out. I would love to hear your thoughts.

"In 2008, the U.S. Department of Agriculture estimated net farm income of $89.3 billion, up slightly from the previous year’s record and 50% above the average for the preceding 10 years."

"2007 was a banner year for major crops, with prices significantly higher than they were in 2003, when we last examined this data. Between the two years, corn prices increased 87%, soybean prices rose 47%, and wheat prices jumped 91% in nominal terms. So how much better off were the higher-sales family farms? Quite a bit, as it turns out, but not from farming. Total household income was up 23%, from $59,623 to $73,260, but the entire increase came from off-farm income, which jumped from $30,375 to $47,245 and accounted for 64% of household income. Still, with total household income reaching $73,260 (in nominal terms), 108% of the U.S. average (well below the 128% that USDA farm sector averages suggest), one would have a hard time characterizing these farmers as well-off."

"Who did well, then? The largest commercial farmers were the only family farm subgroup in the USDA survey to show a net increase in income from higher prices in 2007. Very large commercial farms (family-owned operations making more than $500,000 in gross sales) saw a 46% jump in net income from farm sales, from $130,263 to nearly $189,547, easily compensating for their $12,196 drop in government payments between the two years. With off-farm income dropping only slightly between the two years, the 21% increase in total household income, from $220,971 to $267,130, came entirely from on-farm income, thanks to high prices."

There is a bit more in the article, but those are some interesting numbers that they are throwing around. Like I said, I'm sure it just depends on how you look at things ... but, who is right?

Is Anyone Ruining Farming?

Here is a continuation of yesterdays blog post... Later on in the e-mailer wrote this, "So many comments on the blog are geared to how "we" are ruining farming. Where do you think the line is between "lifestyle" and "profession"? What makes one better or worse?" I have to admit that this one is a tough one, but it is also a question that I have thought about quite a bit from time to time. It is also a question that can be very divisive, so I'll just throw out a couple of thoughts.

There are probably a few comments from me and others on this blog about how the larger farmers are ruining farming and I will stand by that to a point. I do think that a 20,000 acre grain farm can have a negative impact on farming ... just as I believe that Wal-Mart can have a negative impact on shopping and consumerism. I honestly believe the bigger is better mentality is ruining our culture.

I see it in all of the teenagers that I work with, whether it is on the soccer field ... at church ... or in youth group. There is a trend even among the Middle School students that goes something like this, "I need to have this to fit in ... I can't live without a cell phone ... I don't have 15 minutes a day to just sit and be quiet." And it just goes on and on from there.

I have a feeling the bigger is better in agriculture comes from the same through process that the teenagers I work with have ... I got to have it because it just seems like I need to have it or just because I can have it. Just because you can have it doesn't mean you need it! The same goes for 20,000 acre farms I believe.

But, I think the biggest thing is brought up from the Top Producer columnist himself. Remember what he said: "Phipps said in his spring column in Top Producer that there has been little discussion about the long-term impact of an ever-increasing productivity in an industry with a fixed land base."

I don't think it is a question of where you draw the line, I think it is a question of why are we doing this and how is it going to turn out... Again, what are your thoughts?

A High Failure Rate

A slightly late post today. We were at my Uncle's last night and my wife convinced me (not that difficult really) that since we were at the farm everyday now with the pigs and the building we should have some chickens. Sooo..... I spent extra time at the farm this morning fixing up our chicken pen and getting them sort of settled. I'll have to do a little more work to get everything in tip-top shape again (since we haven't used it for a while), but we should have eggs pretty soon. Also, we still have five chickens at my Dad's ... we will bring them back up once we are out there during the day and evening so we can let them roam during the day.

Now, back to the Allan Nation column that I began writing about on Monday...

"The start-from-scratch career path now has a failure rate similar to professional sports. Farming's problem with kids today is we don't tell them the truth."

That is what Mr. Nation reports John W. Phipps (of Top Producer Magazine) has to say about today's state of farming in the United States. But, Mr. Phipps doesn't believe that it is totally hopeless for the young farmers of today. He believes there is a place for them in "agrarian agriculture". That is the term he used, and I'm not too sure I like it ... but, oh well ...

Anyways, this agrarian agriculture that he is talking about is exactly what this blog and so many that read this blog are all about. Mr. Phipps defines agrarian agriculture as, "Producing for a market that values how a commodity is created (organic, local, free-range, etc.), is labor intensive and sensitive to public perception." Of course that is something that many who read this blog already know, but it is always great to hear this type of thinking from a "top producer".

Maybe the tide is turning? What are your thoughts?

Young Farmers Need Not Apply

This little snippet from Allan Nation's latest editorial (the one I referenced yesterday) really got my mind churning,

"The net result, he said [the 'he' in this case is John W. Phipps], will always be an ever-smaller need for replacement farmers. This huge implication for young people who would like to farm but aren't in line to inherit a large farm.

'Put bluntly, agriculture's problem with young people is we don't need them,' he said."

Here is what I think ... that statement is true ... that statement is scary ... that statement reiterates how difficult I think this farming thing can be ... and to top it all off it makes really feel for the students that I work with that have a desire to farm. Just a couple weekends ago I was chatting with a recently graduated high school student from my church who has a HUGE desire to come back and work on the family farm, but with only a few hundred acres does he even have much of a fighting chance (if he continues with what he knows).

Mr. Nation also relates this statement from Mr. Phipps,

"He said throughout his whole farming career he had heard that X percentage of farmers were 65 years old and would soon need replacing. And yet, due to the constant increase in scale there has never been a shortage of farmers."

Now, don't get me wrong I'm not advocating keeping farms small just because they are pretty and romantic. Or that we need to make sure there is a farm for everyone that wants to farm. As with all things I think there needs to be a high level of quality, but I believe there is something dangerous behind these "titan farms". As Mr. Phipps said, there is a problem when you have "ever-increasing productivity in an industry with a fixed land base."

So, do you think we can turn back the clock on this trend on a large scale? I think that those looking to grab a niche (maybe more on that tomorrow) can find a place, but will we just continue to have farms that are ever increasing in size or will the bubble burst? I would love to hear your thoughts!

Titan Farmers

As I read "Allan's Observations", the editorial column by Allan Nation in The Stockman Grassfarmer I was introduced to a term that I had never heard before, "Titan Farmer". The entire column was actually great and full of tons of little nuggets, but I think I'll tackle them one at a time over the next few days ... for now I just want to discuss this interesting term, "Titan Farmer".

So, what is a "Titan Farmer"? Well a "Titan Farmer" is a farmer who farms between 20,000 and 40,000 acres of land, and are even planning on getting bigger. Mr. Nation writes, "...thanks to super-sized machinery and resulting low labor costs per acre these farmers can afford to bid cash-lease land away from farmers in the thousand acre category..." And to tell you how serious these guys are there is even mention of a cash-lease on 2,700 acres right here in my home state of Iowa that went for $400 an acre ... UP FRONT!

There is the future of farming. One of these "Titan Farmers" even told Top Producer Magazine that he has two full-time marketing people that have the sole purpose of finding land to rent and keeping the land owners happy. They use these two marketers to find full-time farmers that are farming farms in the 1,000 acre range or so and then buy them out and hire them to work for the Ultra-Mega-Super-Duper Farm (maybe I just coined a new farming term).

With all of that in mind I believe one of the most interesting quotes from Mr. Nation's column, and subsequently from a column by 1,700 acre farmer John W. Phipps, is this:

"Phipps said in his spring column in Top Producer that there has been little discussion about the long-term impact of an ever-increasing productivity in an industry with a fixed land base."

There is a lot to think about there, and to tell you the truth there is a lot there that causes me to pause... As I said this months column was full of little nuggets, so the story does not stop here.

"Get Big or Get Out"

Yesterdays post on the current/impending crisis in the pork industry and how we got to this place made me want to read a little more about Earl Butz. (As an aside, according to a post on Allan Nation's blog pork prices could hit $10 cwt.) Since Americans don't spend a lot of time discussing Agriculture Secretaries in their high school history classes I didn't know much about Mr. Butz until I watched the "King Corn" documentary. In the movie the two guys went and visited him and talked about some of his policies that helped keep food costs low for the consumers. Even though the movie is about the over abundance of corn in our food, and Mr. Butz helped that along, they seemed to soften up as they talked with him because they could see what his intent was ... to a point.

Anyways, since I didn't know to much about Mr. Butz I did what any self-respecting twenty-something raised on computers would do ... I looked him up on Wikipedia! He served as the Secretary of Agriculture from 1971 - 1976 under Presidents Nixon and Ford and according to Wikipedia had a sometimes bumpy ride. It seems like he liked to run his mouth a little bit and that eventually caught up with him (he resigned a week after making some comments).

There are plenty of people out there that believe the ideas of Mr. Butz, "Get big or get out", "From fencerow to fencerow" farming, and his never ending encouragement for farmers to produce more and more have led to the obesity of America and more. I may not go so far as saying that today ... I'm no scientist ... but, he did make some radical changes in farm policy that are still with us and effecting us today.

I do agree with people who say that the policies of Mr. Butz did lead to the agri-corporations we have today, but for the sake of fairness and to present both sides of the story I will post this quote from an article by Sara Wyant of the "High Plains/Midwest Ag Journal":

For a lot of today's "Baby Boomers," President John F. Kennedy symbolized the hopes and dreams for those lucky enough to live in America in the early 1960s. A few years later, Earl Butz became a cabinet member and delivered a similar sense of promise and optimism for those wanting to make a living off of the land.

During his five years as agriculture secretary, net farm income more than doubled over the previous 10 years and farm exports tripled. He engineered a massive grain sale to the Soviets in 1972 and the Soviets essentially bought up the U.S. grain reserve.

Do any of you have any thoughts on Mr. Butz or his policies?

Not Looking Good for Pork in 2008

Lately my father-in-law has been saving his issues of the "Iowa Farm Bureau Spokesman" for me. He keeps up with my blog pretty regularly (probably will read this) and thought that some of the articles would be interesting and make good fodder for my blogging. Well, he was right! I enjoy thumbing through them and seeing what is going on in the industrial, conventional, local, worldwide, and even small scale farming worlds. The latest issue that he dropped off had an article about the 2008 outlook for pork farmers that really drew my interest.

The title of the article is, "Pork farmers facing difficult 2008 due to high feed costs; soft market". I think the title says it all... Recently the Iowa Pork Congress was held in Des Moines and much of the time was spent tying to work out some solutions to the possible coming crisis. This quote from the article wouldn't give me much hope though: "But based on current analyst forecasts and predictions for 2008, there may not be any good short-term solutions." And, one analyst, Dr. Steve Meyer, said, "It could actually get worse".

For many pork farmers the best solution may be just to break even or even have just a small loss. How in the world can we keep propping up a system thats best solutions ever 10-20 years is to, "break even or have a small loss"! The article continues with no real recommendations other than to do your best and feed any stored grain you have. And then just to make everyone feel even better they throw out the possibility of a drought coming to the Midwest this summer. Yep, just a real good time to have hogs.

But, is it all bad news? The prices that they conventional farmers are being paid are heading down and the grain prices are heading up ... but, the prices at the store are staying relatively even. There is the good news. For farmers who are not tied to the commodity market they may find a bit of insulation from these drastic ups and downs. Not that the direct marketer will feel the pinch from the growing grain prices, but they have more room to move and hopefully more dedicated customers.

It is amazing reading through these articles. The margins are so razor thin in the commodity and conventional markets that if there is even slight movement one way or another it can literally make or break the year. On the other had a diversified farmer who takes the time to connect and market directly with the consumer can weather some of the storms ... it doesn't mean it is easy, but it does make it more bearable.

So, after reading this article I'm still ready to have some hogs. Now we just need to figure out what works best for us...

A Break From Your Regularly Scheduled Blogging

I would like to take this time to take a break from my regularly scheduled blogging. Most of the time I post about recent articles, books, or periodicals that I am reading dealing with pastoral farming (grassfed animals, sustainable agriculture, etc.). From time to time I also post happenings from our beginning farm ... things like trips to work with the cattle, the happenings of our backyard chickens, or contemplations on alternative farming in general. But, today I would like to take a break from all of that and talk about good 'ol commodity farming!

Yesterday my family (wife, son, and daughter) and I were all invited to join a friend from church for a few rounds in his diesel guzzling, corn acres eating, commodity crop combine. It was a John Deere if you are scoring at home. We made three rounds through his field averaging about 160 bushels or so per acre with most of the corn coming in around 16% moisture (I know that because of the little computer screen). My little boy (3 1/2 years old) absolutely loved every minute of it ... especially when he got the opportunity to drive.

And, I have to admit that I loved it also. I know that on one level it is a flawed system. I know that I desire to become a full-time farmer and there would be no way for me to play the rules of the commodity farming game unless a bunch of money dropped in my lap. But, there is just something completely rural Iowan about riding in a combine on a crisp fall day with you son and watching the rows of tall corn disappear before you. There is just something comforting to my soul watching the grain pour out of the combine auger and dump into the wagon only to make it's way to an auger and up into a brand new shiny bin. I love the sound of the tractor, the smell of the crop being harvested, the enjoyment of watching a farmer bring in his harvest at the end of a season, and the crisp beauty in the air. There is just something about it...

But, even though I love all of that I couldn't help but think how this farmers life would be different if he didn't live the commodity farming lifestyle. Sure he has some great new equipment. Farms about 400 acres of row crop land. Bales large round bales and runs a 100 head cow/calf herd. But, he as to do that in between shifts at the police department where he is a full-time officer. What if he was grazing all of those acres and cutting hay and silage instead? What if he was using a management intensive grazing program for his cattle? What if he only had those two old Oliver 1655 tractors instead of the new green machines (or maybe just the new 4wd John Deere with the loader)? Would he have to be holding down a town job just so he could farm?

Thanks for indulging me for a day. I promise that tomorrow I will jump off the commodity farming wagon and post cows eating grass or pigs rooting up small trees in a pasture or sheep following after cows ... you know, something unconventional!