Economy of scale

[dave4441]

I have to laugh when comments are made that greed and money drives farmers to buy/rent more land. In just about any other industry in the world, companies grow because that is what sucessful companies do. Sucessful people tend to want to expand, keep moving, keep inovating. Seek greater efficiencies and do more with less (I personally get a kick out of doing more with less). It is not greed, it is normal capitalist business practices. It is what makes many (if not all of us) get out of bed in the morning. Just read the article on Jim Pallister in Country Guide, guy started with 500 ac and is at 15000. Wow! That is a Microsoft story, in our industry. Instead I am sure a # of people believe it is greed. Funny part of the story was where he wondered if he had lost his edge because he was not investing his own money back into the operation. Hey, competition is in every industry, including this one.

Farms get bigger because there is the same amount of acres in the west and a naturally ocurring decrease in the # of farmers due to retirement. That is all there is too it. Nothing more. People rant that the big farmers are creating communities that are smaller have no schools, etc. A farm is for sale because no one in the family wants to carry the farm forward, therefore someone in the area buys the farm and farms get bigger. For the same reason there is no new entrants into the industry, is pretty much the same reason that corporate ag will likely not take over as it did in certain meat sectors. Tough biz as we all know. Uncontrollable Weather, (it is raining at harvest time as i write this), long hours, details, details, details to ensure success, long hours, etc. Hard to hire these details. Have to be born with it in you, or sitting on a tractors for 140 hours in a week just does not seem like a great carreer choice. Problem is there are so many reasons why someone does not return to the farm, so many good opportunities that where not there when our parents started to farm. Ag is producing doctors,lawyers, web designers, engineers, etc and skilled trades people for other industries because of their work ethic. I was in Vancouver a couple years ago and half the people in the company where from Sask. How do we change the exodus? You don't, just life.

Farm size and economies of scale stats make me laugh. There are so many variables within each operation that make those numbers irrelevant. Depends on the individuals net worth, desire, region, crop practices, attention to agronomic details or marketing, etc. Is it 3000 or 5000 ac or 2000? It is a different # for everyone. If you have the incorrect # of acres for your operation and cash flow needs, your banker will quickly make the decision for you.

[dirtgirl]

Absolutely Dave. Thank you for that.

[dirtgirl]

Absolutely Dave. Thank you for that.

[parsley]

A lot of us have no problem with a farmer expanding his farm. But many citizens do. And taxation reflects what voters say. Fewer farmers means get outvoted. I see taxation as a hazard in response to the question posed.

[dave4441]

I guess our socialist roots run deeper then I think.

[gustgd]

Great rant Dave

I see it this way, talking economies of scale.
The quality of land is very important I know that the $50,000 a quarter land will produce probably 2/3 of the crop of the $100,000 quarters.
but the variable costs are often the same, and the only difference in fixed costs is the cost of the land plus interest lets say for arguments sake $20.00 acre per year or 2 bu. canola.
plus that less expensive quarter likely has either sand, rocks,hills sloughs,is saline.............
I guess the point I would make is I would rather farm 2000 in Emerald Park rather than 5000 acres in Kyle.
Qualifier = grain farm only

As for big framers being greedy or just keeping up with the Jone's. read Dave's comments on that I agree 100%

On our farm we have never chased a farmer off land. It has always been said farmer approaching us after all their relatives declined the family farm.
The grain buyers comments about larger farmers having more dockage and farming poorer my thoughts are that yes we have had some terrible disasters. I spent the better part of two days fighting Kocia in Lentils. I spend allot more time on cost benifit and economic thresholds. Recreational tillage is something they talk about at the coffee shop.

[furrowtickler]

Good points all, their are very efficient grain farms here at 15000 ac and at 3000 ac - there is also the exact oposite. Effecient people make an effecient farm for the enviroment they live in. Mother Nature disaplins they rest.

[parsley]

<p></p>
<p class="EC_style8ptBK"><strong>[URL="http://upload.wikimedia.org/wikipedia/commons/d/d5/Pano_Anakena_beach.jpg"](Efficient people on Easter Island)[/URL]</strong></p>

[gustgd]

Another point on scale.

I think of it as a version of the 80:20 rule where 80 percent of your effort comes from 20% of the work. I may be wrong but it's those little details that take up so much time and management that make it difficult for some people to grow larger. I've got a perfectionist uncle that shudders at the way we do things, it's just his nature.
I laughed out loud when freewheat talked about working with retards, and fully agree with macdon when he talked about availability of labour as the biggest limiting factor on western farmers. For those of you that figure on just hiring retired farmers you have to hire twice as many because most of them don't have wives that let them burn the candle at both ends anymore.
good luck all
good help is truly hard to find

[grrrr]

getting back to my "keeping up with the Jones or greedy" comment a few days ago; When I see a farmer who went broke a few years ago because he was paying way more than the going rate for renting land just so he could rent it and be a big shot, I call that greed.
When this same farmer is now doing the very same thing again so he can farm way too much land and be a big shot again, I call that greed. When I see farmers draing land onto their neighbors so they can drive right through those 20 or 80 or 600 acre sloughs and their neighbors can't even seed their land, I call that greed. When I see a farmer who thinks he is more important than anyone else because he farms more land threaten elevator agents to give him a better grade for his crap (and I saw it) or else, I call that greed.