Thursday, March 29, 2012

Why Do Good Times Make Old Farmers Nervous?

Farming has taken an upturn in recent years. So why are the old farmers so nervous? There have been boom times before. In the late teens and early 1920's, there were years of prosperity and modernization on farms. 
Again in the 1970's when we were young, goofy and living off the farm, there was a time of high prices, increasing land values, and money to update machinery and buildings on farms.
Yesterday I explained the price we pay to produce a crop. It is termed "the cost of production." As production of bushels increases, so does the cost per acre of production. The good times are important, but old farmers believe things will come back down, as they always have. 
Here are a few additional things to consider:
High farm land values aren't always of benefit to farmers and farms. Increasing values makes it more difficult for farmers to purchase land. The land may not yield a return on investment. Old farmers have lived through it.
 
Cows need acres of land for grazing. Room to graze makes for healthy cows, easier calving, healthier calves. Old ranchers would like to continue.
Historically farmers do not make money every year.
 Grandpa Sonny's rule of thumb is this:
In ten years of farming you will make money twice, you will lose money twice, and you will be up or down a little six times.
Old farmers keep track.
In the dry and dirty 1930's there wasn't a profit to be made in Griggs Dakota. 
When farms make a profit, old farmers average it out.
As Iris has reminded me, "It doesn't matter how high the price is if there are no bushels to sell on the farm." Old farmers remember.
Farmers can provide exactly what land needs to produce an optimum crop, but the weather and the markets cannot be controlled.
Old farmers know they are not completely in charge. 
Everybody still needs to eat every day.
Farmers do their best.

2 comments:

  1. another awesome post!! keep it up, i'm lovin it!

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  2. Also historically boom times are followed by hard times, 1920 - then the 1930 crash, 1970's followed by the farm crisis of the 1980's.
    Right now we are experiencing high inputs, high land prices, and high crop/cattle prices. With the current rate we are going it is becoming extremely difficult for a new farmer to purchase ground and make that ground cash flow - the crops it would produce wouldn’t make the farm payment.
    A lot of farmers today remember the 80's and similar situations. Many are waiting for the farm bubble to pop. That's why I'm nervous. Every other sector of the markets have been hit - look at the housing market etc - Agriculture has thus far not been touched - but it's only a matter of time. Sorry to sound gloomy, but that's how I see it and many others do too...

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