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Dave from MN
09-09-2006 11:29:31
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Re: My opinion... long. in reply to O, 09-09-2006 10:48:21
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Well, I am (a little guy) and am just starting out this next year. Alot of it is lack of business management. A farm HAS to be run like a business. Yes, the big guys get some discount on volume purchaeses. So can smaller farmers if they barter or make purchases with other farmers to get the bulk discounts. Smaller farmers also are less apt to change practices either resulting in excess fuel, labor,time,equipment usage. Also the large farmers are also on top of every program available out there- resulting in state/federal payments that many times cover thier land rental costs plus more. They also qet cost shares where enrolling in a program the get reimburesed by state/federal funds for up to 50% or more. Good way to keep equipment costs down, huh. Many smaller farmers are not even aware these programs exist so they do not even apply. Also when there is a certain $$ amount available though a grant or such, it seems that a farmer with 3000 acres he wants to enroll will get granted the $$ rather than 30 small farmers that have 100 acres they can enroll. Well, when you have 3000 acres enrolled in , lets say the "equip" program, you get $30/acre plus cost share, and if the land is also in say DCP they may get another $20/acre or more. So 30000 acres at $50/acre in programs is a pretty nice check to get your crops in, isnt it. Smaller farmers also do not have the storage they should so they sell at market price during harvest when prices may be low. If you talk to some big farmers they always say they are losing money, on paper yes some years they make it look that way, but beleive me they are not. If you farm smart, you can make money wether you farm 20 acres or 20,000 acre's. There is a certain % that you make on you farm, the bigger your farm the bigger the income, the % profit only gains a small amount as you grow, your farm is like a savings account with fees, the more land you run(cash in the bank) the more crops you harvest (= to the interst you earn in savings), the more you gain. The big problem I see right now is the small guys not having the business edge to m ake the best moves. They sell out, big guy rents out there land ( sometimes with contracts for years), grain- livestaock prices will go up and the big guys will reap the profits and the small guy will not have the money to buy all the equipment back he needs to farm his own. This is quite long and I have a lot more to say. But bottem line is small farms can make it, and they need to once again farm as neighbors and farm finnancially smart. The farm land is shrinking, the world population is growing, at some point in the near future farming will be the career to be in to make big money and the small farms will be gone. Millionairs know this and that is why you are seeing more corperate farms grabbing all they can and trying to push out the little guys. I am seeing right now in my community, si I am starting up as a small guy and will learn, and I will share ALL my cost saving and positive cash flow techniques with my small farm freinds around here.
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