The Corporate Farm Conundrum: Are small farmer's in an economic bubble?
If you have not seen the movie The Big Short, I highly recommend it. It shows how Wall Street hedged their bets against housing interests and a lot of people made a lot of money. Granted it was on the backs of people who needed a roof over their heads but still, they made a lot of money.
Looking, we may be on the verge of the same thing if not something similar in the food market. Look at it. Good food, at least food that was good for you, was cheap. This was up until the turn of the century when we started pouring chemicals into the soil. Bad farming practices caused the dust bowl and food and farmers becoming scarce.
The U.S. began to switch from farming to service based and production economy. We made planes and tanks for WWII and people came back from the war not wanting to farm anymore. They wanted to do other things. They wanted to get out of the dirt. People still had to eat.
Fewer people were growing more food and had to do so with more chemicals. We used technologies developed during the War to make foods that lasted longer and were easy to prepare. The food system struggled to keep up with the speed of the rest of the world.
So, who knows what these things began to do to the people. Some people think that the influx of chemicals and modified foods lead to serious health issues. Still, people wanted food, farmers' sons and daughters didn't want to be farmers. There was a greater need than there was for people to fill it. Science found the way. We now grow more food than ever before in history and consume less of it. Not only that, but what we do consume may be bad for us.
Then there are people like me. The process of growing things is really simple. It has been honed over millions of years and getting things out of the ground is pretty much on auto pilot at this point as long as you have the basics. Soil and water. I like putting seeds in the ground. I like watering things. I like harvesting things.
The problem, as I see it, is that people are getting into the business and for many it is not something they can engage in without a high payoff and that high payoff will not last.
Basic production costs are going down.
Seeds are relatively cheap and anyone with Youtube can see how to save their own as well as any one of a thousand other things that used to be passed down from generation to generation. The cost of land is going down and if not going down then it has become easier to grow more food in a smaller area.
Peripheral costs are the same if not higher.
If you want to start a farm you are going to need things and the cost of those things are not getting any lower. If you are raising crops on a large scale, this puts you in direct competition with the big boys who have trucks, vans, combines, etc. The big boys are also deeply embedded meaning they have been around longer, have established branding, and likely larger numbers of investors.
Mass amateurization
I have said it before and I will say it again: farming is not difficult. Whether you have a green thumb or not, getting stuff to come out of the ground is not hard. Getting people to pay you for it is the trick. With the influx of amateurs who are either raising their own food for themselves to save money or those who are looking to sell,
Yay, we win! Right?
The goal for me has always been getting better food to more people. All the preservatives and gmo's seem a bit much for me and I was raised in a place where people grew their own. So now that we are returning to a more natural way of life, we win, right?
With much more natural foods out there on the market and more to come and the price going down, the incentive has become to understand how to set one grower apart from another. What makes one different from the guy up the road?
I got into a discussion with a lady who was selling eggs at $7.00 per dozen for free range eggs. Are those days gone? Most people I know would just have said I am going to go get my own hens and gather my own eggs, or go down the road to the grower who is selling them for $3.50.
*Pop*!
Looking, we may be on the verge of the same thing if not something similar in the food market. Look at it. Good food, at least food that was good for you, was cheap. This was up until the turn of the century when we started pouring chemicals into the soil. Bad farming practices caused the dust bowl and food and farmers becoming scarce.
The U.S. began to switch from farming to service based and production economy. We made planes and tanks for WWII and people came back from the war not wanting to farm anymore. They wanted to do other things. They wanted to get out of the dirt. People still had to eat.
Fewer people were growing more food and had to do so with more chemicals. We used technologies developed during the War to make foods that lasted longer and were easy to prepare. The food system struggled to keep up with the speed of the rest of the world.
So, who knows what these things began to do to the people. Some people think that the influx of chemicals and modified foods lead to serious health issues. Still, people wanted food, farmers' sons and daughters didn't want to be farmers. There was a greater need than there was for people to fill it. Science found the way. We now grow more food than ever before in history and consume less of it. Not only that, but what we do consume may be bad for us.
Then there are people like me. The process of growing things is really simple. It has been honed over millions of years and getting things out of the ground is pretty much on auto pilot at this point as long as you have the basics. Soil and water. I like putting seeds in the ground. I like watering things. I like harvesting things.
The problem, as I see it, is that people are getting into the business and for many it is not something they can engage in without a high payoff and that high payoff will not last.
Basic production costs are going down.
Seeds are relatively cheap and anyone with Youtube can see how to save their own as well as any one of a thousand other things that used to be passed down from generation to generation. The cost of land is going down and if not going down then it has become easier to grow more food in a smaller area.
Peripheral costs are the same if not higher.
If you want to start a farm you are going to need things and the cost of those things are not getting any lower. If you are raising crops on a large scale, this puts you in direct competition with the big boys who have trucks, vans, combines, etc. The big boys are also deeply embedded meaning they have been around longer, have established branding, and likely larger numbers of investors.
Mass amateurization
I have said it before and I will say it again: farming is not difficult. Whether you have a green thumb or not, getting stuff to come out of the ground is not hard. Getting people to pay you for it is the trick. With the influx of amateurs who are either raising their own food for themselves to save money or those who are looking to sell,
Yay, we win! Right?
The goal for me has always been getting better food to more people. All the preservatives and gmo's seem a bit much for me and I was raised in a place where people grew their own. So now that we are returning to a more natural way of life, we win, right?
With much more natural foods out there on the market and more to come and the price going down, the incentive has become to understand how to set one grower apart from another. What makes one different from the guy up the road?
I got into a discussion with a lady who was selling eggs at $7.00 per dozen for free range eggs. Are those days gone? Most people I know would just have said I am going to go get my own hens and gather my own eggs, or go down the road to the grower who is selling them for $3.50.
*Pop*!
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