OT What's a large agribusiness?

How large does a farmer have to be to be called a large agribusiness? There's a guy on TV that just said he was going to stop direct payments to large agribusinesses that did not need them. Just wandered if any of yall know how large large is?

(I am realy not try'n to start a fight, I swear!)

Dave

It always seems a large farm is one that is bigger than whomever is speaking; and a little worthless hobby farm is smaller than that of whomever is speaking.

--->Paul

And anyone driving slower than you is an idiot and anyone driving faster is a MANIAC!

The guy that said that was the PRESIDENT!!!! You know, Barack external_link, during the state of the union address. The farms he is speaking of are large corporate owned farms, with multiple million dollars in sales. There is a very small percentage of farms that recieve a very large percentage of the payments.

Yeaaaaaaaaars overdue, From what I gather these subsidies were Money for Jam.

It is any farm that is so big that the banks can not let it fail. That whole theory is about to be tested.

We have a large corporate farm near me that has in the 10,000's of acres. They are the number 2 receiver of aid in Wisconsin. I would call that a large agribusiness. Considering that the same outfit has a million dollar pulling tractor I would also say the payments fall into the category of "don't need them."

Kinda the way I feel about it too. O go to these pulls and think about how all those people talk about needing subsidies and they have a million or more tied up in a pulling tractor. When times are bad at the shop I work in the toys get sold or not run.

Guess I don't live by the same standards as some.....

In my mind a large corporate farm is a farm that is subsidized by or part of another entity or business.

The large 10000 acre farm that stands on it's own feet and pays it's own bills soley from the land it farms has to face the banker just like the rest of us. Jim

Hitch Enterprises, Ok panhandle,SW Kansas several thousand acres irrigated,few thousand dryland wheat,140,000 cattle in three feedlots and 14,000 sows, family owned by people who are involved in day to day management, have been in business over 135 years.and yes they still have a banker.

It's not a business of how much you own or farm, it's how much you receive in farm subsidies.

How much does a business have to get before he thinks they are getting too much? Does any one know where the line is? Some one on AgDay a few weeks ago said that Vilsack was quoted as saying that no one should count of direct payments in the future. Is that going to be this year? Next farm bill? Just wandering if any one on here had read anything for sure.

Dave

It seems to me that the payments are a reason for us to put up with the government meddling in our farming operations with all of their B*** S***. If there are no payments, there is no reason for us to be in the government program and comply with all of their regulations that they have tried to put on us. Maybe that would be true freedom to farm.

Very true.... and if there are no more subsidies, then the consumer can expect to pay at the grocery store what the food costs rather than having the difference made up with subsidies.
The subsidy is for the consumer, not the farmer.

Rod

The current farm bill takes us thru 2012. Who knows what will happen then.

Gary

I don't expect it will be tested too much. There's lots of those operations out there that are in so deep, they have very little equity. They don't have hard assets to take and sell for the bank to recover anything. These loans wern't made based on hard assets. They were done on the basis of cash flow.... if they could cash flow the loan and make the bank believe at the time that they could keep it up, they got the money. So... in the bank's eyes, the manager of that mess IS the asset. There's some guys around here that work daily with the attitude that if they want to take it, have someone here to milk the cows tonight...

The ones that are really going to be in trouble in the not so distant future are the people that are having cash flow problems and actually have assets to take and equity in the business. It probably won't take too much on the bank's part to pull the plug on some of them, especially if they need the money.

Even if they did pull the plug on a big operation, it would simply be reorganized next week with a new name and they'd go right back at it.

Rod

I'll second that,Paul.

I think what that feller meant is a large farm is one owned by a nnalert. The same farm, if owned by a nnalert, is ocnsidered a family farm. ;o)

$200,000 gross according to the man on TV. Most all farmers would be "large" agribusiness.

At $200,000 that makes my 700 acre operation a "large corporate farm that doesn't need payments"!

> $200,000 gross according to the man on TV.

Did he say that in his speech? Maybe I missed it. The only time I've heard that number was when it was proposed by the Bush Administration back when the current Farm Bill was being drafted.

I googled it and came up with this 2007 article.

"The Bush administration has proposed closing the loopholes and halting subsidies to anyone making more than $200,000 in adjusted gross income. Last month, Sens. Byron Dorgan, D-N.D., and Charles Grassley, R-Iowa, introduced legislation that would cap individual farm payments at $250,000."

They ended up simply lowering the cap from $2.5M down to $1M instead.
2007 Farm Bill Article

Werent "farm subsidies" originally brought into exsistance to help struggling small family farms survive in times of poor prices and disasters? I recieved a couple payments, DCP payments, and I guess the crop insurance portion that was subsidized, but I could have done fine with out this year. I personally dont care for assistance payments being farmed like the land. I know of one guy that has no loans out, farms 3000 acres, has no dependants and he is either #1 or #2 for payments in my county, he for one does not need the payments.

"The subsidy is for the consumer, not the farmer"

That's probably true to a certain extent, but a small truck farm can make a living with out any subsidy, so just because you multiply that by several thousand acres the profit magin not the same? I think for big farms it's an income.

ConAgra? maybe is agri bussiness.

Where?
Not too many can make a living on that scale 'here'. There are no doubt places where it works, and there are no doubt people who enjoy dealing with people on a daily basis and can handle that... so they make it work, but a lot either can't or don't have the option.
You'll also find that the 'system' is not set up for that kind of independant thought or operation and in many cases the regulations are specifically designed to prevent small scale operations.

If you were to look at dairy as an example today, it is nearly impossible to get a licence to process milk for sale (here), you can't sell it unprocessed (~health regs~), you can't get it picked up unless you've got a fairly large volume and you're near a route... then you need to be prepared to take a 53' tridem trailer in your yard, in any weather condition, 365 days a year.
On top of that you apply the basics of HAACP protocol to your production on top of meeting all other quality regulations, environmental regulations and nutrient management plans And you know what? If you don't like that... you don't want to comply with that... well, there's the DOOR. Goodbye. See ya... and if you think you're going to operate outside those regs and not comply, you'll see them in court.

The pittance of subsidy that most of us get are in respect of complying with some regulation or another, or some other fool thing for YOUR benefit.
That would seem to be the difference between our food system and that of say... China where some opertunistic fella thought he could boost the protein in baby formula with melamine. Ya gets what ya pays fer. How many died in that one again?

Also, the notion of someone with a 200 K GROSS income being a large AgriBusiness is absolutely laughable. @200K would be a pretty small farm today. Probably with about 2 other off farm jobs to put food on the table.
Some of the large operations I can think of around here probably do 200K gross in about 2 weeks. They're strong, profitable operations... but they work hard for that, and there's not much wasted on toys either.

Rod