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.

[freewheat]

To me it is all relative. In my opinion farm size is irrelevent to ones bottom line. I am a rare young guy who has no need or desire to farm half the country. I would rather farm modestly, with good used machinery, and not have to hire losers to run it. LOL. I know a lot of guys who farm 6000 acres and are struggling constantly to pay bills etc. And I know alot who farm 900, 1400, and 2000 who are timely payers, and who are doing fine without new machinery or hiring guys.

I do believe in economies of scale to an extent, but why farm the land for no reason other than to add headaches of stress.

Am I the only guy who feels this way? If the corps come in and farm the big holdings, I will feel no obligation to farm for them or like them as so many feel. Why should I? Is it the famous little big man attitude or what? I'll farm modestly for as long as I am able, and when/if the time comes where it is impossible to make a decent living on less than 3500 acres, (highly unlikely, IMO) as so many suggest, I'm quitting and moving to Comox where you are not ridiculed for farming smaller and more efficiently...

The next thing is if I wanted to farm another 2000 acres it would be VERY hard to find that much more land, let alone 500 acres where I live.

So many talk as though to farm bigger you just walk out and get the land. Not so here. Most guys here far 1500 to 2000 acres, some less some more, and their boys are coming home to farm, so no bigger operations are dissolving in these parts. Land sells/comes up for rent by the quarter or two, not by 1000 acres chunks.

Sorry for my rant, but farm size is a very sensitive issue for me as you can tell, and we farmers as a whole are what is driving the trends upwards, not because of the need of more acres, but because we generally feel we need flashy machinery, a pile of land to pay for it, and the human greed factor of I need to be the biggest, not necessarily the best I can be. I see it all around me, especially in other areas.

When you look at auction catalogues, how many of these monster operations with 2 or three lines of 2 years old equipment are retiring, quitting on their own free will? Precious few I reckon.

Guys, we as an industry are committing suicide. And we wonder why young guys show no interest. Well for years they see their dads fight for more land, fight to make huge payments, stressing about it constantly along the way, and fighting to get the crop in the bin. And then in the end, when these dads tell the boys they made 15000 bucks net after all costs, and payments, complaining the whole way, they honestly expect their boys to farm? Good Grief.

To conclude, I feel it comes down to what you want in life, how mature you are, and having a grasp on what really matters. Some think it is money, constantly searching for happiness, contentment, and satisfaction, never getting there and dying eventually. Now tell me what did they do it for? What was the point. Did they enjoy their family time they never had, did they feel like they contributed to society, or were they self centered for so long, trying to be the biggest Jones for far too long?

Guys, we can never take it with us when we die.

IMO, I beleive we should worry more about what happens to us when we die, or Iran with nuclear weapons, or Russia supplying these weapons to massacre Israel, and what that will cause, than how much we farm, how much money we make, or lose, or how much we can snicker at those who refuse to follow trendlines.

Thanks for your patience, and happy farming!

[countryguy]

Thanks for writing that out for me Freewheat.Couldn't have said it better myself.And May-be,you also hit the nail on the head.