The Need for Efficiency???

[WoolyBear]

Here is what the "Powers to be" think of the agricultural sector. And here is my "Million Dollar Question"........ Will agriculture ever be able to afford to be efficient to the levels that are being suggested here? and how many acres, hogs, feedlot animals etc will we need to have to cover our ever increasing expenses, both production related, and family living related?

OECD-UN report: Higher productivity likely to depress farm output prices

Sam Cage
Canadian Press

Wednesday, June 22, 2005

GENEVA (AP) - Real prices for most farm products will likely fall in the next decade due to a rise in exports from developing countries and increased worldwide productivity, according to a report released Tuesday.

Farmers will have to improve production efficiency to respond to lower prices, said the study, compiled by the Organization for Economic Co-operation and Development and the UN Food and Agriculture Organization.

"Competition in global commodity markets is expected to intensify over the coming 10 years, with growing supplies to world markets from lower cost, and sometimes nontraditional, exporting countries," said the 46-page report.

Trade-distorting government support insulates producers from some market effects, so a successful conclusion to global trade talks launched in the Qatari capital, Doha, in 2001 would help farmers improve productivity, according to the study.

"In a developed economy, the market should be counted upon to provide the required incentives to those sectors that need to change," said the report, which covers the market outlook for 2005-2014. "A favorable outcome of the Doha round of free trade negotiations would improve trade prospects."

Trade-distorting support for producers in richer countries could be reduced if it was more clearly targeted at those farmers who most need subsidies, said Catherine Moreddu, an economist at the Paris-based OECD.

"The overall support will go down because you have to give to fewer people," Moreddu said.

But trade in farm goods between poorer countries will increase along with their growing consumer demand, increasing global competition, the report added.

Many of these developing countries have a competitive advantage in primary commodities - such as sugar or rice - either because production is labour-intensive or because their climate is well suited to the cultivation of a particular crop.

Increased investment by such countries in their production facilities, as well as marketing and transport infrastructure, is one of the main reasons for the expected increase in global competition, the report said.

© The Canadian Press 2005

[grassfarmer]

Ah, the myths of farmers and efficiency again - if only we were to become more efficient.... This is old, very old stuff. Farmers cannot run fast enough and succeed in keeping ahead of the game in the "global economy"
Despite the talk of the new trading countries etc mentioned in the article they fail to mention the real problem - wealth extraction by a relatively small number of globally trading corporations. They are the only winners in the "global marketplace".
Where it's fine to suggest that developing countries prosper by "Increased investment by such countries in their production facilities, as well as marketing and transport infrastructure, is one of the main reasons for the expected increase in global competition, the report said." the reality is somewhat different as most of the said infrastructure is being built as we speak by Cargill, Monsanto and co. This does not lead to global competition it leads to global monopolies leaving primary producers everywhere poorer.

[grassfarmer]

I find it interesting that the applications for confined feeding operations in Alberta are usually from small family owned farms, vs large corporate or FACTORY farms. Economies of scale must be taken into account but obviously the small mom and pop operations feel that they are viable.

[Horse]

Emerald1 what do you consider small say 1000 hd cattle feedlot or 5 or mabey 25,000 . Could it be that those are trying to survive the only way they think they can. I hear there are getting to be quite a millionairs club here but those are the ones on the debit side of the ledger. Sounds like they are just producing until AFSC or FCC decides to pull the plug and in the mean time draging the small producers down , by driving down prices.
Just my observations from over the past 40 yr.

[cowman]

I wonder how the powers that be describe "efficient"? When they come up with their definition do they ever consider the social implications...the environmental implications...or is it just the bottom line?
Consider the 25,000 head feedlot, or the 5,000 sow barn? Are they really efficient in regards to polluting the ground water and air? The NRCB experts think they have all the answers but then they don't live beside them! Are they really efficient because they basically run out all the small operators?
The concept that a man could farm a reasonable amount of land, raise his family and have a fairly decent income is fast becoming obsolete. Now he has to produce like crazy to survive. Has to get "big" to become efficient? I ask this question: When does it come to the point where you have enough? How many hogs, cattle, acres is enough? How many hours, is enough?
It seems over the last couple of decades those numbers keep creeping up? There was a time when 100 cows provided a pretty decent living...now how many do you need? Cam Ostercamp stated it pretty well in his article? He says in the eighties/nineties we cleared about $200/cow, which gave a net income of $20,000...which was fairly decent for the times. Then things changed to the place where we were making $50/cow net profit! This means in order to sustain our income we needed to go to 400 cows to obtain the same income we used to get from 100 cows...and meanwhile inflation continued its relentless march! I would suggest 400 cows are one hell of a lot of work?
Where does this all end? How many people finally say "Hey I can't win here! This is a losing game and I'm wasting my life playing it!"
Horse is entirely right about the debt thing. How many "big" farmers are in fact living on borrowed time? Some day the piper has to be paid!

[cowman]

I live a mile north east of a 200 head feedlot combined with a 850 head cow/calf operation and the same distance north from another 2000 head feedlot and 550 head co/calf operation. Both seem to be hanging on and in some cases are buying more land.
I consider anything below 5000 head a smaller sized feedlot.

As for the NRCB having all the answers, the NRCB is only the regulator, their mandate is to Administer the AOPA legislation which is under the AAFRD Ministry.

AAFRD is responsible for writing the legislation and amending it when necessary.

[WoolyBear]

In order to be more efficient we could start with draining all the sloughs, working up blind road allowance, dam the rivers so that we can work corner to corner and that would allow us to us this new AutoSteer stuff. I could buy a couple of tractors, and not have to even go near the field. We all know how inefficient it is to have have sloughs........ so what if we ruin the environment.....

There is a cost to efficiency, and we will all pay the price. It may also come that as we strive for larger farms, we will also lead to the demise of our local schools......... its already happening. Is it efficient to load our future onto school buses for a 60minute ride, or to have to drive further for a hospital that stocks more than bandaids?

God forbid that our city cousins should have to pay for our food, when they can get it from some third world country cheaper? I wonder if they remember all the Canadian Food Aid and development money that was used to put food one those plates over the last 100 years.

[Horse]

Emerald1 I still think you must be a buracat or politicion as you tend to answer a question with a question or non answer but thats ok with me .
Wollybear and cowman I agre with you but do you think we as small producers ever stand a chance of making a decent living again . I ask because I am trying to decide what to do with the farm ,sell or( give ) it to the kids that dont know how to survive on the land I hope to be around for a few more yrs yet but I dont figure on farming anymore myself just enough to keep farm status because I cant live in the country without a good job or farm status.

[Horse]

horse, I try to base my answers or comments on factual information vs rhetoric.

[cowman]

Horse: You face the dilemma...that all of us face! The fact is agriculture is a joke...but it does have some perks!
Many, many years ago I realized "Hey, this really sucks...but I like living here"!
I diversified...right out of farming...but I still am doing a lot of the things I really like. I kept the farm because I like the darned cows, the grass, and yep even growing some hay(and I take a great interst in the crops)!
In my weaker moments I question why I continue to own this millstone around my neck, but then I consider my heritage and my obligation to those to come and I know I have a duty to continue! I really belive that someday things will be different(maybe naively)! My anscestors sacrificed a lot to get ME where I am today and I owe the next generation their chance! It is a weird thing that I'm not sure everyone might understand?

[cowman]

cowman, it is unfortunate that our urban neighbours can't understand why we feel tied to the land and want to preserve this way of life. When I consider the option of living on a 50x120 foot lot with neighbours 5' away the farm looks very good to me. Cows and all !

[Horse]

Cowman keep on hoping I read an article a few yr ago and it was to do with history and farming , 100 yr ago the hope was to get a decent income from farming and as I see it ,it has gone way down a least in the past 30 yr.