Bigger isn’t Better

[oneoff]

Tom makes a very good point.

Corporations are self standing, non-human, "face less" limited liability entities".

But they are run by real people who ordinarily benefit from those corporations. The limited liability part is certainly usually taken advantage of in times of company downturns.

Thats nothing for CEO's and board members to be proud of.


There are only rare instances (Newco for example) where some real attempt is made to go beyond what the law requires to address the suffering of non-secured creditors.

I'll bet nothing extra comes from the personal pocket of this CEO referred to above.

[Mufferaw]

See what happens with One Earth. “We’ve managed to turn the company around. This year we actually are in the black, and we’ll be finishing the year in the black, which is a far cry from previous years,” he said." Works well when you happen to start selling into record cattle prices. See what happens when the livestock market retraces. They at least have the foresight of placing cattle with existing ranchers rather than entirely screwing up the management again.

[sumdumguy]

A lot of equipment is going back.

[hobbyfrmr]

Gary Pike wants to blame others because he is an incompetent shill using their money.

[sumdumguy]

Ultimately, the buck stops at the "big" boss.

[charliep]

Perhaps a point these are two different organizations/business models and different outcomes.

I suspect at some point someone will get a mega farm right. I suspect there are farms in the 10,000 plus category that are doing pretty well in your communities. There are also farms that have expanded their businesses into other things/ventured up the supply chain. Your businesses will continue to get bigger/take advantage of economies of scale.

Perhaps to highlight, how big do you an average commercially viable grain farm that support one family will be in 2025? 2500 acres? 5000 acres? 10,000 plus? Will this business be 100 % family/debt financed or will it require some type of alternative financing?

[charliep]

I remember land auctions from the early to mid 1980's where farms sold for half what was paid for it in the late 1970's. On the other hand the buyer from the community cut a cheque for it/no debt. He got bigger.

[farmaholic]

"Perhaps to highlight, how big do you an average commercially viable grain farm that support one family will be in 2025? 2500 acres? 5000 acres? 10,000 plus? Will this business be 100 % family/debt financed or will it require some type of alternative financing?"

Anyone see a problem with this statement? Does this equate to the average family needing to work 3 or 4 full time jobs to survive? Why does farming continuously have to "adjust" and do more and more to survive, BULLSHIT!!

[charliep]

Been around farming in different forms for 60 years. Would I be correct in saying that farms have grown in size? If you had a 9000 acre farm (even one with 3 or 4 families) in the 1960's/1970's, would you have been considered a mega farm in your community? Is that a mega farm today? Is it really that much more difficult to get into farming today than for my parents or baby boomers like myself? Are the challenges of financing really that much different? Are there more alternative to finance a farm today?

[sumdumguy]

Dave, why no comment from your corner?

[freewheat]

Economy of scale, economy of schmale! When you get to that "economy of scale", whatever the heck that even means, you have to hire people who are not vested. You have to have iron payments to cover that land. (Unless you inherited wealth.)

As soon as you have to pay out salary, (my salary cost was 80 cents an acre, iron was 4 dollars) , big new iron payments, etc., your "economy" is shot.

I am not talking about the 3 or the 4, or even the 5000 acres family farms. I am talking about the 10 000 plus people.

100 grand of salary is ten bucks an acre the small guys do not pay out. 300 grand of iron payments...... I think you get the picture...

Economy of scale, sure, to an extent. But it is not all it is cracked up to be. OBVIOUSLY!!!

Some of us make a living off of 4 grand, some off of 6, and still some of of 1 and a bit.

There simply is not a size requirement to ave success. Is there?

[blackpowder]

There will always be a minimum size for a particular period in time.

[charliep]

That will be defined by machinery capacity. Amount of land a seeder/combine with one operator can handle. Bigger farms will be multiples of this one person capacity.

[farmaholic]

My point is, if 3000 acres of crops is viable now but not 10 years from now because everything I need to operate my farm continues to escalate in price and the value of what grow doesn't keep pace, thats my bitch. It just tells me its broken.

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[furrowtickler]

Well Charlie you are 50% right, you still need competent and willing operators to run long hrs exactly when needed - this has always been the crutch and always will be - to find experienced help.
I have seen these big ideas run all around us - seeding at 7 mph, never properly checkingcalibrating seeding outfits, mismanagement of "time" and many other issues always leads to a wreck no matter the "size" of machinery in those cases.
In general you are correct when bigger machinery is in competent skilled hands, and the operators have "skin in the game" - but when not, it almost always leads to a wreck. Most of us have seen this time, after time, after time.
Does bigger machinery allow some farmers to do more - yup, but something big in the hands of the inexperienced can be harmfull as well.