May 27, 2014 by dairycarrie
There seems to be a lot of talk these days about large farms squeezing out the small farms. I see small farmers complaining about big farmers gobbling up land. I see people in the city lamenting the passing of the picturesque red barn farms. I see a lot of talk about big ag and small local and very few people seem to really understand what’s going on. So let’s talk about why small farms are being replaced by larger farms.
Hubs and I farm in a partnership with his parents. We milk around 100 cows and grow crops on around 300 acres. In Wisconsin, where we live, the average dairy farm is 100 cows. So we are your average sized farm for our area. We have a couple of part time employees that milk a few milkings a week, we have a full time employee that helps us get everything done. Hubs and both of his parents derive their income solely from the farm. I work on the farm as well as off the farm and do not take pay from the farm. Right now the amount of income that our cows produce can sustain the farm and the people who draw a paycheck from it. However, we are far from living a lavish lifestyle. There isn’t piles of money lying around that I have found. Most people would classify us as a “small farm”.
As a small farmer I don’t understand when other farmers complain about “big” farms pushing them out. I don’t see it. I hear people say that they could have bought some land but some “big farmer” came in and paid more than they could offer. This seems a lot like someone saying that they didn’t buy a car because someone else offered more than they were willing to pay, and blaming that person for it.
5 Reasons why farms are getting bigger.
- Farms have to get bigger to generate enough income to support more family members when kids decide to join the family business. If a farm only generates enough profit for 1 household you can’t expect it to suddenly make enough profit for 2 households without some major changes. Despite what you may have seen in headlines around the internet, around 98% of all US farms are family owned.
- Do you like spending time with your friends? How about having weekends off? What about sleeping in or going on vacation? On a small farm you don’t get those things easily if at all. You are tied to the farm, even more so when you have livestock. Cows, chickens and pigs aren’t like a house cat, you can’t just fill up their food bowl and tell them you’ll see them tomorrow. Without employees to care for the animals, your free time is very limited. In order to afford employees, you have to generate enough profit to pay them.
- Farms are getting bigger because there are fewer people willing to do the work. The average age of farmers in the US is 55 years old. I know many more farmers whose children live in the city and don’t have any plans to return to the farm than farmers who are handing off their farms to the next generation. Farming is hard work and you don’t make much money. It’s not surprising that many people choose to leave the farm. Fewer people willing to do the work means that those who do want to do the work get bigger.
- Farming is expensive. In our area good cropland sells for $8-10,000 an acre. Tractors and equipment can cost BIG money. Want to have livestock? Then you have buildings, they cost money too. Oh, and cows and pigs don’t grow on trees, you have to buy them as well. It is not easy for someone to get into farming. This keeps a lot of people from coming into farming and that keeps small farms from starting or staying in business. As you grow your farm, the bank is more likely to loan you money to improve your facilities for your animals or equipment. They won’t give you a million dollar loan to build a barn for 22 cows because 22 cows would never be able to generate enough income to pay the bank back. Want a shop to work on your tractor? You better be able to show the bank that you can make the loan payments.
- Profit margins in farming aren’t awesome. Like any business we have to pay close attention to the dollars coming in and going out. As farms grow they buy larger amounts of needed items like seed, vaccinations, feed ingredients, fuel, etc. As anybody with a Costco or Sam’s membership knows buying in bulk can save you loads of money. I doubt that any farmer is doubling the size of their farm to save $.10 on a gallon of motor oil but knowing that there are ways to improve your profit margin as your farm grows is an incentive to do so.
Hubs and I hope to keep our farm about the same size it is now. We both agree that we would rather manage our cows and not manage people. We know that we are hands on people and we want to be the ones to do the hands on work with our crops and cows. That being said, we also know that we are going to need to figure out ways to make out farm more profitable so that we can stay the size we are. For us that means looking at ways to get more money for our milk, like marketing cheese made with milk from our cows. We are also looking at ways to cut our labor costs, like installing milking robots when our current parlor needs to be replaced, saving us money on hiring part time employees. We know we have to get creative to stay the size that we are in the future and we don’t hold anything against those who decide to grow. Small or large, it’s going to take all of us to feed the world.