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  • From: "Rick Williams" <mrfarm AT frontiernet.net>
  • To: "Market Farming" <market-farming AT lists.ibiblio.org>
  • Subject: [Market-farming] Farming economics and value of money
  • Date: Fri, 7 Mar 2003 18:29:57 -0600

Dave Inglis wrote:
> I have found the ones that do, and a have met a number of them, do not
> let on to avoid the reverse snobbery and accusations that they were only
> able to do so because......

The best advice I can give is to read "The Mind of Millionaire." That pretty
well sums it up.

> As I have said on this list before it is a big assumption to say that
> money is the measure of success on a farm. What is that money for? For
> myself I look for a net yield in Quality of Life of which money is only
> a part. I am a good enough manager to know that.

I think that your concept is a good one. Money is a big part of the
equation. Not the money itself, of course, but what money really is ...
which is a storable, non degradable, easily divisible form of wealth. It is
needed for everything from basic living expenses, capital expansion,
leveraging of borrowing power, and future needs for retirement.

Then there are many other things in life that money can not directly buy and
we need to acquire that form of wealth based on our own values. However,
those forms of wealth are more ephemeral and are not necessarily valued by
all others.

As an example: a photographer may be able to take reasonably good pictures
with some basic camera equipment. With increasing wealth that person may
wish to upgrade the equipment to a fairly sophisticated level. But after a
certain point is reached, it is difficult to do better with more money. The
skill of the photographer becomes paramount in terms of making quality
images or for that matter, spectacular images. And if they wish to market
those images, another skill comes in to play. Not unlike any business
activity:)

> So what.
> Do you know any family based, production sector, enterprise that makes
> the kind of money you seem to think they should based on family labor?

Yes, a considerable number of them. That is why I question some of the
comments that I have read on this list. There seems to be a conflicted view
with some claiming they are doing very well with market farming, but then
also a number who are struggling.

> It is because they find themselves unable to continue farming, for
> whatever reason, that people get that way; they do not start out like
> that. I have seen strong men weep on the steps of the county courthouse.
> I have described the situation I see all around me but not everywhere.
> If you find it "too depressing" perhaps you should not talk to your full
> time farming neighbors, because that's who its happening to. I would
> suggest you do not share your opinion with them that "people like you
> [that] should not be farming"

My friend, we talk about it openly here. We do not hide it. The reality is
that most people can not farm unless they have a strong desire and lots of
ability. And only a very few can do that. This is completely opposite the
way it was when I was growing up in the 1950's. Back then, then conventional
thought was that if you can not do anything else, you can always farm. This
is simply no longer true.

Very few people that I know have been unable to continue farming as you
mention. Most are leaving farming because they are older and have difficulty
doing the work, die while still farming, have serious health problems,
divorce, drug and alcohol problems, etc.

Very few are forced out. The reason for this is simple. Most people who have
been farming for a period of time have often purchased property at a low
price, have much of the farm paid for, have off farm income and benefits
(SOP now), and can coast along for years even if they do not change their
operation to keep up with the changing business conditions.

What IS happening is that there can not be any new people coming into
farming at that level. It is impossible to do so economically. Land and
equipment prices have risen a great deal over the last 40 to 50 years. With
the increase of technology, the COP is lowered. And in a commodity business,
which most of farming is involved in, the average price of the commodity is
close to the average COP. It can sometimes be a little higher and sometimes
a little lower, but it can not get too far out of the real market price. You
may not like it, and I may not like it, but that is way the world works and
it is absolutely vital to understand it.

That means that half the commodity producers (it is not just farmers, but
includes any commodity in the world as long as the market is reasonable
free), are going to make less than their COP. Painful, but true.

But it also means that half are going to meet or exceed their COP. And SOME
are going to make a great deal more than their COP (bell shaped curve):)

> Scale: the purchasing power that comes with it and the ability to
> externalize expenses.
> Six figures does not a healthy Agriculture make.

You need to meet those farmers who are making a good living and why. In our
area, if you want to make a good family living doing commodity production,
it often means dairy farming. But you can not farm like people did 10, 20,
30, 50 years ago. Those who do are doing very poorly. Talk to your Farm
Technical College Instructors who crunch the numbers and ask them to share
that with you.

Based on some of your comments and the comments of some other folks here,
you might be in for a pleasant surprise:)

Sincerely,

Rick Williams
Misty Ridge Farm
Direct marketed dairy beef and produce
(also dairy heifers and beef stockers)
Viroqua, WI





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