Tag Archives: farming

Too Many Farmers & Ranchers?

In these slow times made so by inclement weather (snow, cold, ice, wind, mud, rain), my energy level increases because i’m not working as physically hard.  These past couple years, too, i’ve begun going to our local YMCA at 5am to walk and lift weights for a couple hours.  All this contributes to a restless feeling that i’m not accomplishing all that i can.  My children, now grown, are good at reeling in my ambition and crazy ideas a bit, which is good because i have a natural tendency to get too many irons in the fire.

However, the perspective of age has tempered and honed those expansive ideas as either increasing work or increasing investment.  The latter is much more attractive to me now as my physical strength wanes.

All that shared to relate an irony of agriculture in the United States.  Although, some would cry ‘save the family farm’ few actually have a real look at what the family farm is.  Are we dooming the modern family farm by idolizing the farms of the past?  or those small holdings in distant lands?  The reality is that farming/ranching has never been financial lucrative in the sense of ‘getting rich.’  Margins are slim, startup is pretty much insurmountable now, and i never thought i’d say it out loud, but i fear there are too many farmers/ranchers in the United States.  That is to say, that despite the average age of farmers is 58 or 59, farming of the agrarian sort (actually farming/ranching – not some related field) is more competitive than ever!  Outside investors and to an even greater degree, neighbouring prudent and successful farmers with disposable income bid up land to amounts beyond production value which keeps new farmers from entering.  Oh, yes, i know that mantra is that you don’t have to own land to start in farming, that is absolutely true, but at least here in north Missouri, you’ll be hard pressed to find anything to rent – pasture or crop land.  And, to be honest, most of the land in our county is not crop land, yet it’s been under the plough for decades and much has washed down the creek.

How did this happen?  Technology, bigger and better equipment, government support programs, and the never ending pressure to produce food cheaply.  All these contribute to fewer farmers necessary to farm the massive number of acres to produce crops with slimmer and slimmer profit margins.  Often, the only profit is the check collected from the federal government (you, the taxpayer).  But don’t blame the producer!  It’s just our system.

For some time now, interest rates on saved income has been lower than the inflation rate, resulting in outside investors hoping to get some return on their money, whereas farmers buy land to spread out the equipment costs.  Consider that for a row cropper here, land to purchase (it’s a rarity to find) will cost upwards of $4000/acre. (a small parcel just sold in the county next to us for $8000/acre!)

Thank A Farmer Kitchen Farms wheat harvest in Missouri by Finney Aerial Photo

There are a few farms asking less than that, but most are worn out (soil loss, erosion, and fertility may take decades of proper farming/ranching to reverse or restore) and should never have been cropped in the first place (steep slope, poor production indicators, etc).  Yet, the asking price is out of reach for anyone wanting to raise livestock.  One such farm near me would take at least $400/acre up front cost to restore it to even marginal pasture.  Add that to the asking price, and already it’s over $3500/acre! (Racks & Tracks listing)

So, is land more expensive now than in the past?  Consider my property just across the road from the above listing and of similar topography.

1857 – $1.83/acre – Today’s dollars = $53.19/acre

1870 – $13.41/acre – Today’s dollars = $258.87 (this buyer lost the farm)

1872 – $3.90/acre – Today’s dollars = $80.84/acre  (appraised value was $64.67/acre)

1875 – $4.79/acre – Today’s dollars = $110.12/acre

then several surveys and set aside for Morris Chapel Church and cemetery – finally back together in 1945

1945 – $11.97/acre – today’s dollars = $168.17/acre

1949 – $26.95/acre – Today’s dollars = $286.36

1966 – $92.81/acre – today’s dollars = $724.39*

2018 – $3100/acre – today’s dollars = $3100/acre (asking price of farm across the road)

Working backwards – what would a $3000/acre farm bring in 1949?  $282.34

*1966 is when my grandparents purchased the farm, it shows, too, another reason land owners won’t sell property – basis.  Since this farm was gifted to me, the basis from 1966 remains in place.  In other words, if i sold the land for $2100/acre, capital gains tax would be paid on the difference between $92.81 and $2100.  This tax could be as much as 23.8%!  However, if i die and the land passes to my heirs, it can be appraised and establish a new basis.

Tenants compete for acres by bidding up rental fees because of their massive investment in machinery.  Absentee farmers and investors generally accept the highest rent bid (which is usually the one that will least take care of the soil) and hope the fertility and productivity outlives them, then the property will sell.

Change comes one funeral at a time.

Rather than me stumbling about putting together numbers, here’s a great article written in 2017 with sample startup costs for someone wanting to start and make a living farming.

Cheers!

tauna

HOW MUCH $ DOES IT TAKE TO BECOME A FARMER?

THIS IS WHAT IT TAKES TO GO FROM ZERO MONEY TO A FARMER.
I was talking with a couple of farmers recently, discussing the barriers to entry for new farmers. Some numbers were thrown out as to how much capital it would take for a young man or woman to get started into farming.“$1 million, $2 million, more” were amounts bandied about. This made me curious, so I decided to drill down on the actual capital requirement.

First of all, we need to decide what kind of farmer we are talking about here. For this article, I’m assuming someone with no family farm who wants to become a full-time grain farmer in Iowa, Illinois, or Indiana.

The first thing a budding farmer might do is get a degree in agriculture, since he/she would not have learned farming on the family farm. This will cost somewhere between $20,000 and $120,000, depending on where he/she goes and what scholarships are available. The average of those two numbers is $70,000, which will require student loan debt for most young people. Of course, a degree is not required, but it might come in handy for convincing banks to loan money or landlords to lease cropland.

The equipment requirement could be an extensive discussion; however, I’ll try to keep it as short as possible. One could buy all new machines, but to get started, let’s assume the acquisition of decent used equipment – about 5 to 10 years old.

The basic list would include: a combine with corn head and grain platform for $175,000; a big tractor for plowing and planting at 125K; a grain truck for 60K; a planter that runs about 75K; a grain drill for 40K; a disk at around 30K; a chisel-plow for 30K; a field cultivator at 25K; a pull-type sprayer costs 35K; a grain dryer is 30K; a utility tractor for brush-hogging/ditching/grading at 35K; a grain cart for 15K; a trailer at around 15K; an ATV for 10K; and a full complement of tools costs 15K.

The building requirement probably includes a couple of metal buildings ($200,000) and at least a few grain storage bins to hold 75,000 bushels, about $75,000. There is no hard-and-fast land requirement. However, the farmers I spoke with said that someone would need at least 500 owned acres and 1,000 leased acres to make a living.

The quality of the land certainly affects those numbers. For this article, let’s assume 150-plus corn bushel-per-acre land for about $7,500 an acre. If you bought 500 acres as a base of operations, the total land cost would be $3,750,000.

Add it all up, and we arrive at $5,157,500. Wow! That’s a big number, and it’s out of reach for most young entrepreneurs.

Because of the cost of land and equipment today, some farmers are concerned about who will be able to follow them into the industry. How will they fund the enterprise, even with family land and equipment?

Because of greater access to capital, more corporate farms are likely.

The problem is not just start-up capital but also surviving drought years and low commodity prices until they turn around. Unfortunately, even though you are already a biologist, engineer, equipment operator, accountant, carpenter, and mechanic, you have to become an expert financier, as well, to get into farming and stay there.

Written by Shawn Williamson, Certified Public Accountant (CPA) MBA in Missouri and Illinois. This article is designed to be a commentary on the amount of capital required for a row-crop farm in the Midwest. It is not meant to be a guide on how to get started in farming. 

 

Consider the Future by Kit Pharo

This goes for any business, but is specifically written by a rancher to ranchers/farmers.  It is sad how few ranching businesses stay as such from one generation to the next.  Kit explains again one reason for this.

 

PCC Update

November 7, 2018

Cowboy Logic: “The future ain’t what it used to be.”

Consider the Future –

By Kit Pharo

Have you noticed that the most successful and happy people throughout history have been those who made decisions that were based on the future?   It’s true!   Successful people know that nothing stays the same.   The present is different from the past – and the future will be different from the present.   Those who make decisions that are based on the future will always have a HUGE competitive advantage over those who continue to make decisions based on the past and/or the present.

Unfortunately, nearly all people from all walks of life are afraid to make decisions that are based on anything but the past or the present.   It has always been this way, and it will probably always be this way.   Even though they can see things transforming before their very eyes, they are reluctant to make any changes in what they are doing.   It’s as though they would rather fail doing what they have always done than succeed if success requires change.   That is a shame – but it gives you the opportunity to move your family and your family’s business to a very sought-after position.

Based on what you think about the future, what kind of management decisions should you be making in your cow-calf operation?   I’m not going to tell you what I think.   I want you to do your own thinking.   You may come up with something different and/or better than what I have.   The decisions you come up with, however, need to be based on what you think the future holds.   Be bold in your actions.   Those who are slow to take the appropriate actions may lose all they have – forcing their kids and grandkids to get jobs in town.

Quote Worth Re-Quoting –

“The past cannot be changed.   The future is yet in your power.”   ~ Unknown

PHARO CATTLE CO.

Phone: 800-311-0995

www.PharoCattle.com

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Parity? Not a chance in Farming

It’s not hard to understand why most young people have no interest in farming as a career.  Low wages, working conditions can be brutal at times (weather related or dangerous), and very low return on investment coupled with high financial risk.  Not a good combination.  The average age of principle operators continues to rise and is now over 58 years old – a time when many in other sectors are planning retirement.  However, the young people who are starting up do seem to work smarter and not harder with the result being a more balanced family/work lifestyle.  Also, mechanisation and better ranching principles continue to make the work more pleasant and give farmers/ranchers the opportunity to expand without working harder or longer hours.  There is hope that agriculture will continue in the US, just with fewer operators and sadly, still supported with off farm income.  There is a joke amongst farmers and ranchers that when asked what they’d do if they won a million dollars, the answer is ‘farm until it’s gone.’

1966

Land cost per acre:  $93/acre  (my Bowyer Place)

Cow Prices:  $20/cwt  (20 cents per pound)

Fed Steer Price:  $25/cwt  (25 cents per pound)

Wages per hour:  $1.25 (minimum wage)

Fuel:  .32/gallon

2018

Land cost per acre:  $2800/acre (similar land sales in Linn County, MO)

Cow Prices:  $63/cwt  (63 cents per pound)

Fed Steer Price:  $115/cwt  ($1.15 per pound)

Wages per hour:  $7.25 (minimum wage)

Fuel: $2.45/gallon

CPI Inflation Calculator to compare:

Land – $93 in 1966 is the same as $725 in 2018 dollars

Cow Prices:  $0.20/lb  in 1966 is the same as $1.56/lb in 2018 dollars

Fed Steers:  $0.25/lb in 1966 is the same as $1.95/lb in 2018 dollars

Wages per hour:  $1.25/hr in 1966 is the same as $9.74/hr in 2018 dollars

Fuel: $0.32/gallon in 1966 is the same as $2.49/gallon in 2018

Permanent Ley Scheme

Horribly dry here and no chance of rain in the forecast!  However, it’s perfect for disk ploughing and rotatilling sod pastures so that they have ample opportunity for the grass that is turned up to die.  On the four paddocks i’ve selected this is mostly toxic endophyte infected fescue and other weeds.  Except for the 18 acres that i had tilled this spring and were involved in the annuals scheme, the remaining 32 acres is established pasture – pasture that has been grazed for at least 55 years.  Tilling it up created quite a clatter on my rotatiller.  Rocks, rocks, and more rocks.  There basically is no topsoil on my pastures except in the low spots along ditches.  Sad – very sad.

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Rainfall on 21 August 2017 – very nice and quickly absorbed by thirsty soil, but hot, dry, and often windy even until now 17 September 2017.

 

 

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Settings we used for a mixed sized seed batch on our John Deere 1590
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John Deere 7220 and John Deere 1590 planting permanent pasture mix.  I hope to never have to work the ground this much.  I’m no farmer!
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Seed ordered and mixed by Welter Seed & Honey.
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Note the difference sized seeds which makes how to set the no-till drill tricky.  At least for us; we are just learning.
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Dallas loading the no-till drill while Allen and Andy discuss what settings to use.

 

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Using the 7220 John Deere tractor which has front wheel assist to pull the JD 1590 no till drill.
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Here is the mix i ordered from Welter Seed & Honey, Onslow, IA.  Really appreciate their personal and quick discussion and advice.  Mixed and shipped very quickly.

 

So how in the world did i come up with this mix?  After reading Robert Elliot’s book The Clifton Park System of Farming and Laying Down Land to Grass, i’ve been interested in his trials and observations.  I used a permanent mix found from Cotswold Seeds and interestingly it is even labeled Clifton Park mix!  How weird is that?!  The link here describes it in depth;

‘LAMINS’ Drought Resistant Four Year Grazing Ley Dry, Light Land

Pulled into the first sod bound pasture land (Paddock 15) with the John Deere 4250 and the Howard Rotavator on 29 August 2017.  Granted, i know most recommendations are to have this seeding done and in no later than the 20th of August, but this year just wasn’t going to allow it.  And thankfully, i didn’t get in earlier; had i put these seeds in slightly moist soil, they may have germinated, sprouted, then dried up in this heat and dry weather.  As it is, the seeds are just resting in that super dry soil waiting for just the right conditions to grow and thrive.  The concern at planting late is that there won’t be good growth before freezing weather and a long winter.

 

(On the 1st of September, i mustered my bulls and hauled them (Allen and Dallas helped a lot), i spent too much time outside and became overcome with ragweed allergies.  This kept me sleeping and recovering in the house for two days.  Andy was able to take over for me so we kept on schedule.)

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16 September – RAIN!  Slow and gentle, but with damaging winds.  Total amount received two inches – perfect!  Yah is gracious.

 

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So to wrap it up with costs:

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Figures from 2016 Custom Rates for Farm Services in Missouri

That’s a lot of money!  and doesn’t even include the $60/acre spent earlier this year in lime spread.  Hope it all pays off – i don’t want to ever have to do it again and with managed grazing, it should last many lifetimes.

Shalom!

tauna

 

Spraying Done for this Year

One of the main projects i had planned for this year was to spray brush.  Truly had hoped to cover the entire farm, but there is just so much that between regular work and windy or rainy days – well, i did get quite a lot done actually and i’m pleased.  My focus did switch to completely covering (spot spraying) the west 160 and that was accomplished by July 1.  It is important to keep track of that date because three years from then, the farm can be used to grow certified organic crops.  Weed and brush management from now on will have to be by brush hogging and intensive grazing.  One of the ironies of ‘certified’ organic is that i can’t chemically treat individual plants even once for three years, but i could burn all the fossil fuel i want mowing them down.  But rules are rules.

So to finish the project also means to clean up and put away the tools used.  My 30 gallon spray tank and pump were purchased new at Orscheln’s this year and i hope to get several more years’ use out of it.  Their brand name is Country Tuff and it has worked flawlessly all season.  I did switch out the coiled hose for a straight one we already had – i just didn’t like the coiled one.

For the chemical, the easiest and most effective in my opinion is Crossbow.  i buy it by the case (4 gallons) at a cost of $200.46 at Butterfield & Associates Grain in Meadville, MO.  Mix half gallon to 30 gallons of water and you are ready to go.  This spring and summer, I sprayed about 1200 gallons of mixed spray.  That’s about 45 hours worth of spot spraying.

Cleaning up:

  1. drain and rinse out the tank with clean water
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This photo shows that i place a 2×4 between the tank and the edge of my Gator bed which keeps the tank from rubbing on the side and also keeps the clips that hold the sprayer wand from breaking off.
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i used a couple tarp straps around the tank to secure the tank in place.  The 3×3 inch board in front keeps other items from bumping against the tank and the motor.  (My Gator is usually full of other stuff)
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Under the motor, the draw pipe is located.  Shown here, i’ve undone the pipe from the tank and showing the screen is partially plugged.  The sprayer will operate with this little bit of stuff clogging it, but you will definitely notice a lack of spray distance.  It’s important to use clean water and keep stuff out of the tank which can clog the orifice and screen.
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I’ve cleaned the screen and replaced it.  (Yeah, i know, i need a manicure badly!)
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This tube actually had a small part of a leaf in it when i set out to clean the tank for storage.  I knew i had a lack of power and had cleaned the screen before.  I just thought maybe i had run the motor so much it was worn out.  However, i have no doubt now it was because of the leaf blocking this tube.  I’ll remember to check that next year.
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Inside the tank is the draw tube.  This is where that leaf had gotten trapped.  i’ve cleaned it out now.
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The electrical plug and wire goes from the motor and up through my Gator back window and down under the passenger seat to the battery.
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Horrible photo, but black to negative and red to positive for battery connections.
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Cleaned, drained, ready for winter storage
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Properly labeled as to what was used in this tank and when.

 

Shabbat Shalom!

tauna

Ultimate Test of Sustainability?

Will Your Operation Succeed to the Next Generation?

It’s been said that a farm or ranch is not truly sustainable unless it employs at least two generations. I believe it’s imperative that as producers we recognize that even if we become both ecologically and economically sustainable, but fail to pass our mission and work on to the next generation then we’ve failed the ultimate test of sustainability.

According to the most recent census of agriculture: from 2007 to 2012 there was a decline of over 95,000 farms in America. A quick look at the current trends tell us that most of today’s family farms and ranches will not succeed to the next generation.

I believe there is hope for a bright future.

This hope is not based on wishful thinking but rather a ground swelling of innovative farmers that are indeed beating the odds and are building thriving operations. A few names you may recognize are operations like Joel Salatin’s Polyface Farms in Virginia, Gabe & Paul Brown of Nourished By Nature in North Dakota, as well as Will Harris’s White Oak Pastures in Southern Georgia. These are just a few of the many operations that are shining a bright beacon of hope to the greater agricultural community.

If you visit any of these operations there is a very obvious, but all too often overlooked, common thread of success. Each of these operations spring forth with a multigenerational team of people that bring intellectual diversity to each acre of their land.

Most of us in agriculture are at a road block because we’re too narrowly focused on a production mindset and we’ve lost sight of people and relationships. We must make the critical distinction that people create profits – profits don’t create people.

Those of us pursuing regenerative agriculture understand the value that biological diversity brings to our land, but we often forget about the value that human creativity and diverse intellectual capital can bring to our land.

At Seven Sons Farms we’ve stacked multiple enterprises on only 550 acres. By creating synergistic relations between our land, livestock and people, we are able to employee over 10 full time people as well as several part-time positions. We refer to our team as our intellectual human polyculture:

Human Pollyculture

Any successful leader knows that their organization’s most valuable asset is having the right people in the right place.

Zig Ziglar offered this belief: “You don’t build a business – you build people – and then people build your business.”

If the above statement is true then it begs the question – how is agriculture as a whole doing at building people? The graph below shows a plummeting decline in the number of human minds in agriculture.

The erosion of human capital:

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SOURCES: Agriculture in the Classroom, 2014; BLS, 2014; NASS, 2014a,b; U.S. Census Bureau, 2014a,b; USDA, 2012

Over the course of time we have eroded much of our land’s precious resources in the form of minerals and soil organic matter. But no greater erosion has taken place than the depletion of human minds from each acre of our land. In the early 1970s we reached a critical point – for the first time in the history of American agriculture the number of human minds per acre involved in agriculture fell to a negative ratio.

Interestingly, it was around this same time period that the farmer’s share of the food dollar began to plummet as well.

The erosion of the food dollar:

There are many factors at play but it only stands to reason that if we want to capture a wider diversity of the food dollar, it requires wider diversity of intellectual talents. This is exactly why at Seven Sons Farms we have sought to foster synergistic relationships with people that enable us to capture a greater diversity of the food dollar.

To sum up the past half century of agriculture, one could say that in pursuit of production, we’ve attempted to trade people for profit. In the end we’ve yielded neither profit nor people.

At Seven Sons we believe that the people connected to the land represent the most valuable asset a farm could ever possess. To illustrate this point, imagine for just a moment if you were to remove Joel Salatin, Gabe Brown, or Will Harris from their respective farms. These farms would look nothing like what they do today without the creativity and vision that each of these leaders bring to the land that they are called to steward. The same holds true for your farm as well. The beliefs you operate from, the vision you put forth and the people you inspire to join you – these are the game changers that will empower your operation to beat the odds and succeed to the next generation.

There are unprecedented opportunities ahead of us…

I believe we have unprecedented opportunities ahead of us when you consider many of the recent breakthroughs in regenerative agriculture as well as the rapid shifts we’re seeing in our food culture.

So if you’re looking to exchange new ideas and be challenged to think outside old paradigms then I encourage you to join myself and hundreds of likeminded people at this year’s Grassfed Exchange in Albany New York.

The very mission of the Grassfed Exchange is to catalyze the exchange of practical knowledge, ideas, and strategies that you can take home and begin applying on your operation. Bring a family member, friend or budding young agripreneur who is looking for their way forward in agriculture.

What The Grassfed Exchange Is About:
Click here to register for the 2017 Grassfed Exchange

Reprinted from Grassfed Exchange