This is interesting, thank you for sharing. Is the main problem simply the reduced price of output (due to competition with large scale industrial agriculture), rather than other factors (such as potential increased costs of inputs, degraded soil quality, access to water).
> We've wrung all of the redundancy, both financial and biodiversity, out of the system.
I have similar concerns, not just about farming but other parts of a globalised economy. It is far more efficient to have everyone very specialised, with long-range dependencies. It is far less resilient to have one huge coupled economic system than a number of smaller, approximately independent systems. [+] Similarly, it's more efficient (in the short run, or the lucky case) to not leave any contingency or insurance against rare events.
> What happens if Chinese investors own half the farm land and we go to war with China?
I wouldn't worry about this one -- unless foreign investors have a means to enforce physical security of their ownership claims, there's always the option of the government with control over the physical assets to expropriate them, either by simply changing the law, or declaring special war time powers. For example, re: WW1
> the attack on enemy aliens and their property involved diverse institutions (governments, parliaments, the judiciary, armies and administrative bureaucracies) and actors (local businessmen and entrepreneurs, lobbies and interests groups but also ordinary people animated by patriotism or who saw in the attack on enemy property an opportunity to improve their own economic status).
edit: [+] to call myself out for claiming things based solely on intuition, it's not at all obvious that many smaller independent economies are necessarily always more resilient than a single arbitrarily structured large economy -- it might depend on the structure of dependencies, and how much choice there is for alternatives if subsystems fail, and how much slack is in the system, and dynamic factors. To argue in the other direction, smaller, isolated economies also tend to be at more risk of failure if any of their larger participants fails (see also: common wisdom about risk of buying real estate in small single company or single industry towns and so on...), so there's probably more robustness for those economies where the impact of failure of any single participant upon the overall system is roughly negligible. but i think there is usually a pretty strong conflict between efficiency redundancy.
“Is the main problem simply the reduced price of output (due to competition with large scale industrial agriculture), rather than other factors (such as potential increased costs of inputs, degraded soil quality, access to water).”
It's mostly the market price of outputs. As was stated in the OP, producing a gallon of milk costs $1.90 or thereabouts. The cost in the grocery store is $2.59 in my area this week. This price has to cover not just the farmr's costs, but the shipping, packaging, and grocery store overhead. The farmer is lucky to break even, and often doesn't. I've read elsewhere that to guarantee a dairy farmer a living wage, without government subsidies, a gallon of milk would have to go for closer to $5. If you want organic, non-feedlot milk, that cost is even higher.
In my sister's case, our 300 acre farm can support around 75 breed cows, which means you could expect about 65 heifers and steers born every spring and sold every fall. These will be around 1200 pounds, at a “dressing percent” of 63% which means you get a 750 pound carcass. 490 pounds of this will be meat - let's call it 500 as a round figure. So she could produce 32,500 pounds of beef a year. The vast majority of this, over 75%, is going to be ground beef. A small fraction of it will be filet mignon.
If you figure that her business expenses are going to be in the neighborhood of $150,000, which is going to include equipment upkeep, fuel, fertilizer, seed, feed milling costs, farm maintenance costs, vet fees, medication per animal, and so on. She is going to need $50,000 in income to support her family, so that means her price per pound of beef would have to be about $6.15. Not including the cost of butchering, transport, auction fees, and all of the upstream costs (packaging, grocery store overhead and profits, etc). Now if you walk into your grocery store you will find ground beef commonly going for $5 a pound or less.
The 4-H says it costs about $7 a pound to produce beef, so that's a pretty good estimate.
And note that this does not include buying new equipment. A new tractor of a size that would let her bale hay starts at $50,000. Paying to have the farm re-fenced would be somewhere between $50,000 and $100,000 depending on specifics. It also does not count all of the horrible things that can and do go wrong farming. If she cuts hay and it gets rained on before it dries, she loses that crop. You get three hay cuttings a year. That's a third of your hay crop gone, which means you have to buy hay. If there's a drought, you might have to buy water by the ton and have it trucked. If you get an outbreak of hoof rot, you lose a significant number of your animals and a significant amount of your pasture has to lay fallow for years until the pathogen dies. The number of horrible things that can go wrong that are beyond your control means that the above prices don't provide enough financial cushion to make it through a bad year or two.
Farmers can make a very good living at much less than $5 per gallon of milk. Here in Canada with our supply management quota system that Trump rails against, milk retails for $4.29 CAD for four litres; $3.06 USD per US gallon. And it's so insanely profitable that farmers are willing to pay $20000 to $50000 for a single cow quota.
> I wouldn't worry about this one -- unless foreign investors have a means to enforce physical security of their ownership claims, there's always the option of the government with control over the physical assets to expropriate them
That isn't a good scenario. Foreign? There were no white men in america, no black men either, so everyone is a foreigner, and the natives should expropriate them all? Dangerous ideas. That's how a war turns into a nightmare.
> We've wrung all of the redundancy, both financial and biodiversity, out of the system.
I have similar concerns, not just about farming but other parts of a globalised economy. It is far more efficient to have everyone very specialised, with long-range dependencies. It is far less resilient to have one huge coupled economic system than a number of smaller, approximately independent systems. [+] Similarly, it's more efficient (in the short run, or the lucky case) to not leave any contingency or insurance against rare events.
> What happens if Chinese investors own half the farm land and we go to war with China?
I wouldn't worry about this one -- unless foreign investors have a means to enforce physical security of their ownership claims, there's always the option of the government with control over the physical assets to expropriate them, either by simply changing the law, or declaring special war time powers. For example, re: WW1
> the attack on enemy aliens and their property involved diverse institutions (governments, parliaments, the judiciary, armies and administrative bureaucracies) and actors (local businessmen and entrepreneurs, lobbies and interests groups but also ordinary people animated by patriotism or who saw in the attack on enemy property an opportunity to improve their own economic status).
https://encyclopedia.1914-1918-online.net/article/property_r...
edit: [+] to call myself out for claiming things based solely on intuition, it's not at all obvious that many smaller independent economies are necessarily always more resilient than a single arbitrarily structured large economy -- it might depend on the structure of dependencies, and how much choice there is for alternatives if subsystems fail, and how much slack is in the system, and dynamic factors. To argue in the other direction, smaller, isolated economies also tend to be at more risk of failure if any of their larger participants fails (see also: common wisdom about risk of buying real estate in small single company or single industry towns and so on...), so there's probably more robustness for those economies where the impact of failure of any single participant upon the overall system is roughly negligible. but i think there is usually a pretty strong conflict between efficiency redundancy.