How Should We Farm? Part 2
When we look at farming today we are all struck by trends which give cause for concern. One of these is the erosion of long-term profitability.
Twenty years ago a consumer could buy milk at $1.30/gallon. Today the cost to the consumer has doubled, but the farmer receives the same price for his milk as he got back then. Farmers have experimented with minor changes, but these have had little effect. What I feel is needed to put farming securely on the road to profitability is a major new approach, which radically shift inputs and outputs of agriculture. The radical approach is more necessary as we move to a global economy and remove the supports and checks and balances that farmers have enjoyed in the past.
What keeps farmers from making radical changes in order to be profitable? One thing is their reluctance to break tradition. Often Dad and Mom are looking over the shoulders of the young couple taking over the farm. If the parents retain a large part of their equity in the property by way of mortgage money, they may continue to influence management decisions in order to insure that interest and principal will be paid. The parents sometimes encourage larger capital inputs because this is accepted practice in the community, even though it may not increase net profit. They are reluctant to look at ways to lower capital, operating and labor costs because these ways are unfamiliar and untried in their experience. As a result, some of these sons and daughters-in-law may still be farming for many years just to retire their debt.
In contrast to this picture I have seen other young families enter farming primarily from a business rather than a way-of-life mindset, with a desire to return to the land and be self-employed. They tackle new ideas and techniques while keeping capital, running, and labor costs low; in the process they are able to retire debt in a very short time.
We need to carefully evaluate the past and be open to new ideas. Over the last fifty years, many farmers have increased output irrespective of cost. We have tried to confine nature by taking farm animals out of their natural habitat. Cows are being milked at 90 miles an hour instead of 65, with the result that they have increased health problems and a much shorter productive life - a major cost that is often overlooked.
An alternative to this is to move to a more grass-based system, which greatly reduces costs and is much friendlier to both animals and the farmer. It also largely solves the environmental contamination problems because the animals spread their own manure instead of manure being concentrated in one place. The animals also harvest much of their own feed, which reduces the high costs associated with a machinery/corn silage operation. And there is always a need for supplemental feed.
One could ask - Is this really possible? Well, we are starting to see this type of farming in pockets around the country. One fine example of this is what I call a truly commercial family farm operation in south-central Pennsylvania. It is was developed by Bryan Petrucci of The American Farmland Trust, and operators Glenn and Evelyn Moyer, an experienced couple who have been successfully grass farming for decades using additional inputs of grain and silage. This is a well-planned commercial operation that should be closely watched; I am sure it will be replicated many times in years to come.
Having made these observations, let me add a word of caution. This type of farming requires a major change in thinking, and should be carefully studied before embarking on it. I have seen many farmers meddle and play with grass farming, merely incorporating some of the details into their conventional operations. Successful grass farming requires looking at the big picture. Initially the overall plan has to be tailored to the particular farm related to location, topography, soil types and climatic conditions. Then on a daily basis adjustments have to be made quickly, in response to what happens in nature. However, it is a more enjoyable, kindlier, friendlier way for both livestock and the farming family. Farming this way could be considered an art as well as a science, and when done correctly is also very profitable.
This is the second in a series of discussions through which Doug will express assumptions and observations, and propose some solutions that he has developed through brainstorming with commercial farmers, businessmen and bankers over many years.
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