I get that frustration.
The less government is in the business of subsidies, special tax carveouts, and bailouts the less it happens. Likewise with regulations and IP laws that are often designed by the top companies in their favour.
I have a feeling CHIPS is going to a classic example in retrospect, a wealth transfer to stodgy oligopolies, not about market development. Likewise with inventing AI regulations in an immature market before the risks are fully understood.
If only these people would vote for folks who stand a chance of adding friction to this process.
The Biden Administration Is Still Banning White Farmers From Federal Aid - https://thefederalist.com/2021/09/20/the-biden-administratio...
1. It was repealed in (also the Biden admin's) IRA about a year later
2. The argument for special programs for racial minority farmers is that only 1% of COVID aid for farmers went to minority farmers, largely because such aid was dolled out based on existing holdings/historical output. Minority farmers have been excluded from USDA development programs for generations now, so their holdings/output left them unable to benefit from from the COVID aid
Altogether seems like a reasonable problem to try to solve, but not a good way to solve it, and it's good that it got repealed ~14 months later for a race-blind version of the same program.
It depends on the monetary system. Those monetary systems that mostly accompanied capitalism have a feature that leads to this capital accumulation effect: interest/debt.
Financial capital is kept in banks, which deposit it at their central bank. There it naturally accrues more capital due to interest. (Except in exceptional circumstances like the Swiss negative interest period)
Ted Turner has two million acres of personal and ranch land in the US, Gina Rinehart has well over 28 million acres (at the end of 2016 - she has purchased more since then) of "ranch land" in Australia (they're called stations here in Oz).
It seems probable that
if Bill Gates is the largest single farm land owner of record with the same holding name on all titles
then there is likely several larger companies each with multiple subsidiaries that each hold almost as much farm land as Gates with a common subsidiary name such that each larger company controls more farm land by a magnitude than Gates does.
I haven't done that work.
( I have done similar work for mineral and energy leases globally though, ownership is generally diversified through a few layers ).
1/ Australia doesn't have "ranching" families anymore than it "throws shrimps on the barbie" - that's 'Merkin Engrish there.
2/ Gina Rinehart's massive station holdings come from her mining empire which was inherited from her father Lang Hancock - an iron ore mining magnate.
Sure, Lang sprang from Ashburton Downs, a sparse Pilbara lot of land:
At the time (1918) it occupied 755,520 acres (3,057 km2) and was stocked with 19,000 sheep and 320 horses.
In 1949 the property was carrying a flock of 30,000 sheep, but by 1951, following a severe drought, shearing had to be cancelled as the stock were too weak to be droved to the shearing shed.
In 1979 the property was stocked with 300 cattle. In a good season the station is able to carry a herd of approximately 5,000 head of cattle.
but with brothers and an extended family there was no money there to made by Lang, he made his nut spreading mesothelioma * to the world and later convincing others to invest in vast mesa's of dense high grade iron ore, still being mined today.
FWiW the Hancock family drama surrounding the control of tens of billions per annum resources makes Dallas look a little rookie .. although Prix d'Amour** is bulldozed and gone now.
Trump’s trade policies his first term drove away foreign buyers, who didn’t rush back afterward. US farmers rely on exports, as we farm way more than we need to to feed just the US. We had to (well, “had to”) bail farmers out then, because of Trump’s trade policies, and now we may well do it again for the same fucking reason.
Wonder who they voted for.
being in a society means having a safety net. different people agree on some things and disagree on others. apply the golden rule.
The people in rural areas strongly disagree with that statement.
A few will get to reign in hell, or retreat to their bunkers, or leave with their riches.
Is it just a price issue? External completion? Increased input prices?
(I don’t know how true this is)
They are at the bottom and the players above them have leverage on every level. Unfortunately the way for them to gain power at the base level is to consolidate and grow - agriculture mega-farms - but that's something there also strongly fighting against.
Ultimately smaller farmers probably need to be some sort of protected class, which they already sort of are, but not to a proper extent to ensure their survival as they argue. This is the state of things in many countries in the world now, which is something that they see and accept but do not necessarily like, but that won't change policy in regards to Indian dairy Farmers or what have you so there's little prospect except frustration. Even in aggressive trade negotiations with tariffs flying over the seas at full bore, things like fishery rights and such often turn out to be the most steadfast holdouts. Not easy to change.
Or perhaps the trend of consolidation will simply continue, and there is an imminent wave of small farm bankruptcy.
Don't worry though, AI will totally make it all better. You know so because the wealthiest people in the world insist on it.
The economics of American farming fail because 70% of profit is retained by the processor, versus 20-30% in India.
Ever ate Mozzarella in the US? It's made using Indian skim dried milk. Same with any sort of artisanal cheese that uses 6-8% milk fat.
[0] - https://www.thebullvine.com/dairy-industry/from-extinction-t...
[1] - https://www.thebullvine.com/dairy-industry/indias-dairy-revo...
That said, Amul is just one of 200k cooperatives in India. Verka (Punjab/HP), Nandini (Karnataka), Milma (Kerala), AAVIN (Tamil Nadu), and others generate Amul level profits and are managed by opposition parties.
The issue is dairy processors in the US tend to take 70% of profit, versus 20-30% in India, because most processors are themselves cooperative owned.
Farmers also tend to "go it alone" in the US, but in South Asia the whole village collaborates. Even Punjabi farmers here in Californa collaborate with each other on capex investments, but the Anglo farmers go it alone.
A cooperative ag model would really help Pakistan as well, but that would require destroying the military's monopoly on various segments of the Ag industry which they won't give up.
I believe arhatiya also play a similar role in Pak as in India. I wonder if Modi’s farm bill affected these coops.
Essentially, instead of farming, you become a commodity broker (arhatiya)
This is why you didn't see similar protests in other states in India that also have MSP like Kerala or Gujarat, because they don't have the same logistics chain (otherwise they'd do it as well).
> Another issue might be that PDS was abolished in the 80s (utility stores at provincial level are similar but not the same
Oof, that is not good. India has shown that a PDS style model can work nowadays thanks to digitization. Pakistan needs to redeploy the PDS system if the ag economy is to recovery, especially after the floods.
> arhatiya
Yep, but they tend to be in those commodities that aren't covered by a cooperative.
It looks like Michigan's milk producer cooperative is selling in some partnership with India’s Gujarat Co-operative Milk Marketing Federation Limited (GCMMF).
https://www.michiganfarmnews.com/mmpa-to-make-milk-for-world...
They don't tend to own processing infra, though that is slowly starting to change. And some of them line "Land o Lakes" are cooperatives in name only, and are very abusive to small farmers, because they can only process at 1k+ head sizes.
> It looks like Michigan's milk producer cooperative is selling in some partnership with India’s Gujarat Co-operative Milk Marketing Federation Limited (GCMMF)
Yep! Because India can't export Indian milk to the US without tariffs, and American cows are fed meat, so Amul decided to corner the vegetarian milk market by making the cooperative deal with MI.
Blume Ventures had a good write-up on this I need to find.
It's not just AG, it's every single industry today. It's obviously the result of corruption among elected officials and it's a vicious cycle... who finance these candidates political careers? Nobody wants to bite the hand that feeds them... Corruption is always done at the expense of everybody else...
At least in IT, we've got open source software (but not much open source hardware). Imagine a world, where every single IT company would depend on Windows thus Microsoft...
That way, if/when you decide to switch to the MS offering, at least you can bring up that they’re not the only game in town, to get a better deal.
People complain about Kroger with a 1% margin, if only they knew who was actually bending them over.
There are free alternatives to Microsoft Office, but you would never get your money back using them in a corporate environment, as with Word, PowerPoint, and Excel, people come knowing those things.
The cost of software is overwhelmingly not the cash price.
I knew what the commentator meant despite knowing about the Bayer merger
On the other hand, no one today in any other part of the economy would decide they want to start a new business, with small scale, in a commodity market. Software startups rarely go up against Windows, Excel, Google search, or Amazon e-commerce.
I grew up in a farming area in the midwest, and even then (several decades ago) there was no realistic prospect of doing well, but most (not all) farmers insisted on growing corn, soy, or one of a very few other commodity crops. I'm not surprised that this doesn't work out well; it doesn't work out in any non-agricultural sector either. Small businesses have to go into niche markets, and that is not a new phenomenon. I recall reading (and hearing) almost exactly these same complaints in the 1980's, straight from the farmers, but the idea of growing other crops just made them irritable.
And then, they would cheer the arrival of a big Wal-Mart in town, and go shop there instead of the small store they had been buying from.
1 - "non-niche" a/k/a the undifferentiated "standard-quality" product in the middle of the niche. This is not about someone inventing a longer-lasting light bulb or stain-resistant t-shirt. The best analogue to farmers selling commodity soybeans is something closer to plastic food wrap or aluminum foil. Not a lot of small operators playing in or entering those spaces either.
As a small commodity farmer, I don't see why it can't work well. Cash crop farming is quite well suited to small operations as far as I am concerned. The actual hard place to be is the mid-sized farmer trying to manage boatloads of debt.
The current crop price situation is not ideal, but we are also just coming off some insanely profitable years. Save during the good times to weather the bad is farming 101. I suspect, given how much equipment prices jumped in the last few years, that some of these guys thought they could get away with going out and buying a bunch of new toys and that's what really has gotten them into trouble.
There’s a monopoly in farming like there’s a monopoly in tech. And you think you can go into tech with some niche business and somehow become Google before Google buys you up? Well, that’s the goal, to just have a company to have a bigger person buy you up and then you go away with the money and everyone else suffers.
There’s an insane separation of wealth and you don’t see that as a/the problem? I’m serious with these questions.
I'm just not sure how else you go from some of the most profitable years in agriculture history to bankruptcy in the span of a year or two. Vendor prices have not yet come back down in line with reality, nobody is going to question that, but, as they say, the cure for high prices is high prices. These temporary aberrations are par for the course. For what reason is there to believe that this time is different?
> There’s a monopoly in farming like there’s a monopoly in tech.
Yes, Nvidia looks quite similar in a lot of ways. But the pick and shovel makers have always been best positioned to take advantage of gold rushes. That isn't unusual.
> And you think you can go into tech with some niche business and somehow become Google before Google buys you up?
I'm not really sure how this applies in any way, but especially because you don't really have to compete for customers in commodities. A commodity implies that you have automatic customers. It is not like you have to try and convince users to use your product over Google's.
But the bottom line is that there are fat years and lean years in agriculture, but if it gets really bad for a sufficient number of farmers, the government bails you out because the alternative - no food - is recognized as worse.
> we are also just coming off some insanely profitable years
Could you offer some color on the prominent narrative from farmers (even in this article) that the last few years have just been terrible for farmers? From TFA:
> This is the worst agriculture economy of my lifetime over at least the past three years
Thanks again for commenting.
I honestly have no idea. Three years ago in particular is when the perfect storm lead to historically high commodity prices. If that's what they consider the worst time in agriculture history, I have no understanding of where they are coming from. The problem right now is that the input costs are still trying to act as if it is still three years ago, which is a problem, but the cure for high prices is high prices. I see no reason to think that will last.
As suggested before, it is likely that they are overleveraged and the loss of profitability coupled with higher interest rates is what is killing them. That's the trouble with trying to be a mid-sized player.
From TFA though, 2400 is like 2x-2.5x median farm size. That's not a small farm size. It's not a massive corpo farm, but it's not a small farm. So the segment quoted in that article might be under some pretty specific pressures (other commenters alluded to - they may have bought some very pricey equipment during good years - an actually small farm will get by on shittier equipment or just rent for a brief harvest)
In my business I see their books. Good years and bad years. Some things are more volatile - dairy can swing between losses and significant profits. Layers are pretty steady if you are on a contract, as long as you don't get the avian flu. Produce farmers rarely have a loss year, but their high income years are generally not as high as crop farmers, who sometimes do show a significant annual loss. More risk = more reward.
The last few years have been pretty good overall, for my clients.
When you have more diversity, I imagine you would get more resilience, more competition, and market forces work properly.
(pun intended)
And then within that bucket, it's fairly obvious that larger holders are going to be much more resilient to regional problems if they have diversified land holdings where one area can support a downturn in another.
This is all Renaissance era knowledge.
This is sort of a tricky way of pointing out that they largely do not grow food for the US.
Hmm, that's only true if the kinds of crops those small farms are regularly growing are the kinds we'd want to have already in the ground as an unexpected "food security" crisis occurs. In other words, durable staples with long shelf-lives, as opposed to cash-crops for export, quick-spoiling luxuries, etc.
Are there any stats that might confirm/disprove that? Because if most those small farms are geared to pistachios or asparagus or hemp, then they aren't really serving as a national safety net.
The subsidy-driven end of farming views markets for their product as an entitlement. For dairy operators, that's almost a religious belief. World School Milk Day is September 24th. They're desperately fighting against oat milk and almond milk in schools.
Then came Trump's tariffs. One of the current messes involves canola oil. Canada exported canola oil to the US, until Trump put on a tariff. So canola oil exporters want to export to China. China, in turn, wants a cut in Canada's 100% tariff on electric cars, which looks like it will happen. This in turn will reduce US car exports to Canada.
The current administration is soft on white-collar crime. That's part of the Project 2025 plan, and it's being carried out by refocusing the US Department of Justice on "violent crime". (Which is mostly the business of local cops, since the federal government only has jurisdiction over crimes related to interstate commerce.)
The price of a commodity is the cost of the marginal producer. For oil, a marginal producer is Canadian oilsands oil. It costs them $50 - $70 a barrel to produce their oil, and another $10 to ship to market. Thus the price of a barrel of oil is typically $60 - $80. If it drops below that the Canadian oilsands producers shut down, and the next most expensive producer becomes the marginal producer. (example highly over simplified)
OTOH it costs Saudi Aramco $10 per barrel to produce their oil. They make insane profits.
American farmers are not quite Saudi Aramco levels of profitable, but they are not the marginal cost producers. Large, highly mechanized farms means American farmers have extremely low labor costs compared to the rest of the world.
The last 20 or so years have been extremely profitable for American farmers.
It’s not even just a question of economies of scale, many east coast farmers grow corn just fine without any irrigation systems that’s a lot of capital you can spend on something else. Being able to lease out a tiny fraction of your land for a co-located wind farm alongside agriculture is a huge boon for many. And so it goes across a huge range of different situations.
All this variability is why you don’t see 20+% of US farmland under one giant corporation the way you see in many other industries which benefit more from economies of scale.
Literally every new startup is a more specific version of Excel, but also direct competitors have also been funded over the last 10 years! Same for Amazon!
Weird thing to have in an article about farmers who primarily export their food.
If, in contrast, you let those farms and skill dry up it would be difficult to rebuild quickly.
I don't see why it's strategically important to the US taxpayer that one millionaire own it vs a different millionaire (or corporation).
Since these folks by and large do not grow food for people in America to eat, just how important is this to Americans who do not work in ag? Why do we subsidize farmers to produce products for export? Why do we not do that for other industries?
Two things are true: farming is very hard & a certain set of rich[1] family farmers are coddled.
1 - Chappell, the farmer in the lede, grows 2,400 acres on an 8,000 acre family farm. That's about $5m of land under cultivation on a farm potentially worth near $20 million. This is the type of farmer we are bailing out. This farmer, who is richer than 99% of Americans, and those like him.
But we all know that realistically, at this point, the people in charge would just sell it for a pittance or dump it to manipulate market prices even if 70% of the country was starving— because this is the kind of society we’ve all created.
None of them are trapped, there are bigger buyers that have capital and are willing to take them out. We don't have to subsidize millionaires with our taxes, especially if they don't want the subsidies!
Of course we won't develop everything, but I'm not sure the monetary value of the land adequately prices the value of being able to grow crops. I won't pretend to have a plan, but watching very productive cropland get converted into lawns and warehouses makes me leery of how ag land is dealt with.
There appears to be a dichotomy right now between commodity farmers whose export markets have collapsed due to national policy and those who grow food for American consumption, who are not having that problem. I'm trying to gauge how important the former is to those of us who do not work on those farms.
The complicating factor is that those grains are the feed for the last stage in beef production, with about half of all US agricultural land going to pasture for the previous stage. Eliminating those grains could significantly impact how much food the rest of the land can actually produce.
But again, we're not necessarily talking about farms literally closing. This is mostly about which rich person gets to operate a given plot of land. If a farmer goes under and sells to another farmer, at the margin why should we care? I still have yet to see a good answer as to why we should care which millionaire operates these farms.
It's far from perfect since some large landowners run "hobby" farms to get the tax break while producing nothing of significance for the greater society. Other developers take the bet that they can get the land developed and sold before the biggest bills come due and it will be someone else's problem.
>“Right now, if I was to walk into Congress and ask all the senators and reps, ‘Who thinks the agriculture industry is hurting to the point of collapse?’ all the hands would go up. Instead, the question should be, ‘Who thinks farmers are hurting to the point of collapse?’”
>“There’s a giant difference between the two questions, and that difference is indicative of the separation between local Ag and Big Ag,” Buffalo concludes. “Farmers, not the giant agriculture manufacturers, are the ones hurting to the point of going belly up. There’s no solving any of this until that difference is recognized.”
I'm not quite gripping why lower-scale farmers are hurting more than "agriculture manufacturers"-- or why those two things should be compared directly. This article seems to conflate agricultural suppliers and industrial-scale agriculture (aka farming.)
If it is that small scale farms are less efficient? Then yeah, you're going to need bail-outs WITH BETTER PLANNING, OVERSIGHT, and eventually OUTCOMES, if we want small scale farmers to continue existing (which, btw, I am all for.) Do that while also monopoly-busting suppliers of farming inputs. Also, maybe it sounds like fixing short-term profit motive shareholder capitalism might be implied. hah. But you'd have to do it in a global market-aware framework, as other governments meddle with ag markets in a sometimes adversarial way.
To bring it back to the dust bowl, one of the few actually effective programs was to improve ecological practices that prevented dust from blowing as much. And restoration of buffalo grass from buying out farmers' lands and letting it re-naturalize.
---
Fun: this article is really heavy on the "for defense", "security" language, even bringing up the Chinese spy balloon for basically no reason. I guess cynically that makes sense. I suppose the irony of pandering to the current crop of American right-wing politicians-- who are accelerating the private-equity gobble-up hellhole expansion faster than ever-- might be lost.
Every one, at every step in the supply chain is over leveraged.
When credit was cheap(free) every one at every step in the chain borrowed heavily. Farmers, Suppliers, Buyers. Now that the bills are due (it's all commercial paper most had 5 year terms) the last of it is now running through the banks there is NO wiggle room left.
Why are farmers squeezed out? Because they have little control over their direct costs (equipment, seed, fertilizer) are heavy users of credit, and dont control the value of their sales.
Honestly the writing was on the wall -- farmers know that crop marketing (when to sell, what to sell as a futures contract) is a big part of what they do. The services they pay for to help them in this task got it very wrong. This is contrary to the data they had, and may have been motivated by emotional choices regarding the political climate and outcomes...
It's a miracle of technology that it's even possible. Let alone the government subsidies, nitrate imports, immigrant labor, and major corporate consolidation that it requires.
Needless to say, this current administration is the perfect storm of every policy needed to destroy this domestic industry.
I am sceptical farmers have any specific quality distinct from all other labour, exposed to monopoly capital. There's a long history of reverence for the keepers of the land, on left and right, and there have been specific political carve outs for farmers, good and bad from the left and right.
They were lied to, capturing their votes, and now suffer the consequences. There's also a "dis-intermediation" element to this, structural efficiency drives are squeezing their margins which matter for longterm resilience.
Food is strategic. I think it should be managed as a strategic asset more than for its balance of payments impact. Life on the land is hard. We should be kinder, but then, so should farming communities, voting for liars.
Couple of things here:
- Where I farm we grow 40-50bu beans most years, rarely hit 180bu corn and, not cited as reference points above, wheat in the 60's, Oats around 130, and Canola in the 40's. All of which is to say $400/ac revenue is a pretty easy target to hit. Our costs, besides land values are essentially the same as farmer in Arkansas and things aren't all that bad for me, so what gives?
- Who honestly thinks that 25% of Arkansas farmers are going to go bankrupt in the next 3 years? (I don't know what report he is citing or the timeline so I just picked a timeline that seems reasonable.) My bet is no one.
I looked up Arkansas land values and good ground seems to go for under $5,000USD an acre, not much different from where I farm - is there some crazy extra cost that American farmers bear that I am unaware of? As a Canadian I hear American farmers whining all the time about how tough things are and I just don't get it. Things are not as good as they were in some recent crop years but overall profitability is not a big issue.
https://www.arfb.com/uploads/pages/arkansas_land_values_2024...
These monopolies, if they were so powerful, would be squeezing farmers so bad that land values would be dropping, not rising... but land values keep going up. Profits are being plowed into fixed assets, which means that there are profits - that's the economics of the thing, right?
And your farmland is not only cheaper, but it’s more productive.
You can’t compare the United States and Canada because we have different political systems. I mean, you guys get free healthcare. You can probably afford to buy land because you’re not spending all your money on outrageous insurance premiums, or out-of-pocket cost from going to the doctor.
https://www.producer.com/news/prairie-farmland-still-a-barga... Western Canadian farmland is cheap when compared to Europe and the United States, says the director of an investment fund with offices in Calgary and Toronto.
Western Canada, maybe. Now try Ontario... It makes the I-states look like the land is being given away.
Land value has very little to do with how productive it is.
I legitimately don't know if they are bots (because the comments are all too similar) or if they are the just sneering Redditors en masse. I can certainly imagine both scenarios, although I'm going to guess it is more likely to be bots.
Two examples:
https://www.youtube.com/watch?v=-VYtabeCROY https://www.youtube.com/watch?v=t_N3g986TiE
If youre gonna ruin my life I hope yours gets ruined as well.
Farmers have no monopoly power (and any collision would be difficult or illegal).
Amazing to read it so clearly - although we see in other industries.
It's hard to have any sympathy for such cynical behavior while simultaneously asking for handouts. Especially since the same people probably voted against others getting social services.
DaveZale•3h ago
around here, cities will buy up farms just for the water rights, so the land prices are so high, nobody sane would go into that business.
forget all the high tech AI laser weeding machines. those might add an edge to large, already successful operations.
Getting started or renewing a failed operation is a 24 hour per day job. Sure, it's a crisis
zdragnar•2h ago
It used to be at least one of the kids would take over the farm, but now as parents age out, there's simply too many better opportunities with less hard effort out there and fewer are interested in staying in the business.
duxup•2h ago
larsiusprime•2h ago
A lot of advocates of building restrictions did it in the name of preserving nature/farmland/greenspace, but in many ways it’s had the opposite effect:
https://youtu.be/-Qn4iZgQY8k?si=LFzuAdWgMxB1BpIG
JamisonM•2h ago
DaveZale•1h ago
you never lived in California?
The urban sprawl there ate up all of the orange groves, for example... in Orange County!
JamisonM•1h ago
larsiusprime•1h ago