The number is high, but farming in generally is a high risk bet.
I often say to people, I need to spend (i.e risk) $100,000 for the chance to make $20,000-$30,000 if everything goes correctly. One major event and you just lost 100K. Scale up or down depending on the size of the farm.
Sustainable farming is a terrible business as long as giant unsustainable factory farms are a thing. If you want to make money farming, you need to either go the vertical integration or agro-tourism route.
Not trying to refute what you are saying because I honestly don't know, but this seems to contradict the original article. Of course sustainable/organic farming is going to struggle to compete in the normal international commodities market, but in the article it mentioned that organic grain could be sold directly for 2-3x the base commodity price. Seems like that kind of progressive price scale might make it not such a "terrible business".
The problem there is that farmers must do a lot of marketing to achieve that 2-3x multiple of commodity prices, so even if you're nominally more profitable, the additional time investment isn't really worth it, compared with taking your crops to a co-packager to get a 10-20x mark up.
I've got several friends and there are a host of others who disagree and whose works completely disprove your point. A search should easily turn up plenty of results so I'm not taking time to look up sources on this one.
Yes it is. I don't mean to ignore that. Not everyone gets it and its not 100% coverage (usually 50-85% in my experience).
I would argue the pendulum has swung too far with crop insurance. There are acres that have no business being in production and rely on federally subsidized crop insurance programs. Needs to be re-thought IMO
Yes, farmers have banded together and make large purchases and grain sales. These are known as 'co-ops' in the US. The idea of them is great.
There is a WIDE variance on the quality of co-ops. Some are great and well-run and provide the intended benefits to farmers. Others would make the mafia looks less corrupt (seriously, the CEOs of some co-ops make 500k+ salaries).
It seems that banding together on grain sales cuts both ways. I gather that selling to (or is it through?) the co-op gets you access to the commodity markets, which generally makes selling your goods easy. However, when you are buying seed for the next year's crop, you have no guarantee that the market price when you sell it will cover your costs. At least that's part of what I get from:
> Between cash and cover crops, Wicks and Givens are planting about 4,500 acres this year. Some of that land is leased from Wicks’ mother, who retired in 2019, and the rest they lease from neighbors. They’ve contracted most of the barley to Anheuser-Busch, though they’ll sell some to nearby Hutterite colonies for chicken feed. They’re also growing lentils, chickpeas, Kamut and Einkorn for smaller mills including Timeless Seeds and Montana Flour and Grain, both based in Montana.
> Their yields are smaller than their conventional ones were, but Wicks said it’s worth it. Previously, they were at the mercy of international commodity markets, as well as ever-increasing seed, chemical and fertilizer prices. Organic producers often have more leverage, because they usually grow a diverse range of crops and sell directly to processors. Plus, many Montana organic grain and pulse growers forward-contract their crops, meaning they lock in a per bushel price before even planting. Wicks and Givens often sell their organic crops for two to three times the price of conventionally grown ones.
A similar, likely smaller scale, tale is told in TasteMakers[1]. In this episode I think it was the beef supplier that said that he couldn't count on the commodity price of beef, but by contracting with the local artisan butcher prices were set for the year. Who knows what percent of his herd goes to that butcher.
Yes, this is the path for many small players. We had a craft beer revolution, and there is a 'craft beef' revolution slowly happening.
How well can this model scale remains to be seen. Also, do not underestimate the meat cartels. They have deep pockets (and the cutthroat executives) and can go to the mattress far longer than small-time players.
Presumably these expenses have benefits, otherwise companies wouldn't be using them? It's like saying a company saved $200k by dumping their computers... so they can do everything on paper.
Most agricultural chemical products are profitable in the way a loan is profitable. You get higher yields now, but you're disrupting the environment and making it more vulnerable to pests, drought and erosion in the long run. As these problems start to become apparent, your only solution to maintain yields is to use more and more products, until the land is so marginal it collapses.
Probably referring to dust bowl era land like Oklahoma. I don't like the word collapse, but I'm guessing there are implying that the ground is x% less productive for crop production or grazing).
The risk of land collapsing is probably greatest West of the Missouri river where historic rainfall is less and historic topsoil is less (Dakotas, Nebraska, Colorado, Kansas, etc).
Overuse of fertilizers can cause chemical burn which damages the soil ecology. In combination with tilling it will gradually destroy the soil quality.
Pesticides destroy insect diversity, including predatory insects that keep pests in check. This is particularly problematic because pest populations tend to recover more quickly than predator populations, so if you stop spraying the problem comes back worse. Pesticides can also harm bird and amphibian populations, which play a role in pest control.
Maybe not what they are referring too, but you can absolutely 'brick' land by over applying chemicals ('salting the earth'). There is a continuum depending on which chemical and how 'bricked' you make it.
Dave Montgomery posits that soil degradation has determined the lifespan of past civilizations. At the rate that plowing erodes soil it takes about 1000 years to deplete the resource to the point of desertification.
No, just no. This is 100% false. You are not required to use ANY chemical on ANY crop in the united states. It's it 100% a voluntary decision. Why so many people make the decision to use these chemicals is another discussion.
Chemicals like roundup where so effective they changed agriculture production in unforeseen ways (like we lost institutional knowledge on how to successfully grow crops without them). The fact that mother nature is rendering all chemicals (glyposate, glufosinate, dicamba, 2,4-d) ineffective is predictable. Mother nature also had the mechanisms to combat these chemicals, but it happened quicker than most people thought.
We also didn't have 2nd and 3rd generation tools (re: not chemicals) ready to go when the chemicals failed. So we're stuck on treadmill.
> Chemicals like roundup where so effective they changed agriculture production in unforeseen ways
And some of those changes were significant positives not only for agricultural productivity, but also for the environment. The biggest of these is the reduced or eliminated tillage... tilling the soil several times a year with heavy machinery was the biggest contributor to soil degradation and even outright soil loss.
First, after tilling, some of the soil literally blows away with the wind. Second, organic residue in freshly tilled soil decomposes rapidly to CO2 and Methane, versus healthy untilled soil where a significant portion of it would decompose to long-term stable humic and vulvic substances... so we have a double negative where we're increasing the global warming contribution and decreasing the capacity of the soil for retaining nutrients.
I've dabbled in farming, and I'm no fan of glyphosate, and certainly not of Monsanto, but I think it's important to point this out because certain knee-jerk reactions, like "ban glyphosate" by themselves are only likely to make things worse. If you ban glyphosate for example, one of two things is likely to happen... 1) it will be replaced by even worse chemicals, or 2) people go back to frequent tilling. There are no quick fixes to industrial agriculture, the only solution is to move toward highly integrated regenerative approaches, and these are by their nature much more complex and labor intensive. It's great that there are more and more people doing that, but big ag keeps them operating at the margins of our food supply.
That just moves the thought back a step. Why would they sign a contract to pay $200k to use those chemicals? They wouldn't if there weren't any benefits to it.
I think when a producer is doing things at scale and is on the hook for millions of tons of wheat the industrial approaches involving chemicals are probably the only way unfortunately.
