Economy of scale

[grefer]

All through my farming lifetime,farms have been getting larger.It has been generally accepted that farms must get larger to reach what was said to have an economy of scale.I would like to know your thoughts on where this is taking farming in the next fifty plus years and whether this a good thing or not for farmers/farm managers and secondly for consumers/society.

[cottonpicken]

I've spent time on this.
I dont think farming is like other industries.I dont have time right now to go into detail but i'm not worried about becoming an employee/shareholder of a farming conglomerant.

That said-these huge scum bag multinationals companies could change the rules and screw us over.

[Hopperbin]

At 4000 acres our farms should be big enough for any economy of scale. We work hard and efficient. If I were to become a shareholder employee of a larger corporation I would feel robbed. Should we be owned by the chinese for instance and get demoted to a tractor driving job or a just repair man job or a simple electrition job. Or a job shoveling grain at lower pay. These large corporations can only support so many high paying jobs. Lets watch Earth one perform. Look at our retirement packages we now have cotton, are you willing to give that up?

[Koldkanuck]

I was told once by an older grain buyer, that the larger farmers have the worst samples of grain, and on the whole get paid less. Why I asked......and he said because larger acre farmers tend not to get their land seeded in the proper time. Yes they grow mega bushels, but a lot of the larger farmers tend to seed later into the spring, and are prone to frost, etc. he claimed. I know of a few 20-30,000 acre farmers that have seeded right to the end of June, and yes they got burnt many times by frost in the fall. So he might be right. Any thoughts?

[charliep]

For what its worth, I look at machinery sizing and economies of scale.

The 4,000 acre farm takes a 50 ft air drill plus a combine, etc. You can work everything harder or perhaps upsize to get to 5,000 acres. Going to 6,000 to 8,000 acres puts you in a real tough spot - not enough extra acres to justify extra equipment but too much for the current complement (obviously there is things like custom work).

The labor component also comes into it. Enough farm to keep the owner/manager busy or enough to justify an employee - things move in big junks as you make these decisions to grow.

An interesting question to ponder on the combine.

[samhill]

Around here the larger farmers hire at a decent wage
but lay off in the off season. EI subsidizes the
operation. The owner is actually an employee of the
corporate farm. Don't know if what they pay in
premiums makes up for it or not.

[SASKFARMER3]

Well I dont know about getting paid less or poorer grade etc. Out of 70 we have 69 to go. Yes their is a difference from 4000 to 6000 to 8000 to 10000 to 15000 to 20000 plus. Were still a family run farm and will keep it that way for a while.

[grrrr]

I saw a report a few years ago that dealt with the economy of scale topic. In SW Sask and southern Alta. 5000 acres was most economical. In the rest of the praries 3500 acres was most economical. These are the maximum acres that can be farmed in these areas before you start doubling up on machinery and labour etc. These numbers will change for individual farms and as machinery gets bigger, but they are a good guide. So in my humble opinion, anyone who wants or tries to farm double or triple these acres is only fooling themselves and are either trying to keep up with the Jones or are greedy.

[macdon02]

So if 3500 to 4000 is the most efficient size who is going to farm all the land when the average age right now is 55? I am younger and the opportunity keeps coming around every year guys want out and not just the three or four quarter farms. I am not going to rent more land just for something to do but this could be the time to get bigger before the giants come in. If that is the way things are headed there will be little choice in regards to just collecting wages. It will be interesting to see the changes that will take place 10 years from now. Labour will be the biggest problem, technology will fill alot of gaps but we will still need good people and it is tough to find 20 year olds interested in ag. The acres an operation needs for the full time employee has to be close to that required just for the manager. I don't believe you can get the younger crowd interested without fulltime work, you let them leave and they just never come back.

[may-be]

The most efficient farms in imo is not acres farmed but management and equity in the size of the operation. If I got big right now I might make more on good years but loose much more on bad years haveing to pay high rent, equip payments,and intrest. If I was young I would go for it though. Better opertunity today then when I started.