Leesburg, Ohio | denny-o - 10/31/2014 13:17
This country is going to corporation owned farms -.........Last statistic I saw was that 4.5% of farms in this country are large corporation owned and produce 40% of the food.
I have not verified those numbers, but they should open your eyes.
Many family farms think they are doing well, but they are not setting aside money per each hour of operation on each machine so the cash will be there to replace the aging machinery before it becomes unreliable nor are they accumulating capital by setting aside x dollars per acre per year on the present land, to purchase more land. The money that should be going into that fund is diverted for "income".
Accumulated capital in the hands of a corporation is what will finance the future generations of farming. And in 30 to 50 years as corporation farming becomes THE majority the consumer is in for a real shock. Corporations do not flinch from big debt to ensure market control - such as fallowing land if the projected market price of the grain for next year does not meet their minimum. Should be interesting to watch as futures-trading-scum, try to manipulate the market and meet a steel wall of resistance.
Denny: Maybe you can name a "corporate owned farm" in your area. I cannot name a single one in all of southwest Ohio. Are there large operations here? Sure. A very few in the range of 5-10,000 acres. a couple larger. All of them, every last one, are family owned and operated. Some of these family businesses are probably organized as a corporation for a number of reasons, but they are not owned by "Wall-Street-type" corps.
There were never any special accounts for money "set aside" in our operation, nor in any that I know of, to fund future machinery replacements or land additions. It comes from a thing called "equity". In any business, I don't know of a way to be the most efficient and successful without having every dollar of assets in use at all times earning more return. A special "account" to park money in for future replacements would be a very inefficient use of assets, and would further limit the future viability of the business.
"Accumulated capital" in the hands of families is what will finance the future family farms in this country. These families must act like a business now and do what needs to be done financially in order to be here for a few more generations.
And I would not say that our futures and our cash market system today is perfect. In fact it may be the worst way to determine price, except for all the other methods ever tried. With all its faults, I think we are extremely fortunate to have a market system today that can fairly (for the most part) determine the price of any farm's production offered to it on a moment's notice, deliver that production anywhere in the world, and have very few failures or hiccups in the process. Yes, large futures traders seem to be an easy target to complain about when they are on the other side of the market from where you are. But without those traders and yes, even speculators, none of us would be able to sell our production with the ease and fluidness and efficiency we have in today's market. I am very glad the large funds were taking the positions they did in the past few crops...that just meant more dollars directly in this family farm's pockets. You can say we are now paying for it, but did you take advantage of those higher prices to lock some in for this year's crop, and next year's crop? You should...it might be even more important than that "special account" you talk about! I guess that makes some of us farmers the "futures trading scum" you refer to.... |
John Phipps blog-starting in farming
