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| SC is right, though if you own a lot land you might be able to go up scale with one of those fancy worm boxes instead of the folgers can.
What I think you are asking is whether or not you should be in a business with it's particular characteristics of risk, reward and effort required. I feel we all have some type of calling put into us (by design) and that we will have trouble finding much joy in life if we miss our 'calling'. That said, farming, like most small businesses, requires plenty of effort for not a huge reward. Many of my friends see success as gradually increasing their net worth, so that at some point they have assets that can be sold, rented out, etc that in turn provide a retirement income.
I'm getting ready to go sort through about 2400 pigs this morning (getting the underperforming guys out) and it will be hot and my pay (especially with the problems we've had in the market) ends up being around -$3/hour after I pay my help. Things are certainly getting better, but even with this tough year we made all our payments and I own more of the buildings than I did last year (and more of a 40 I'm paying on). I guess I'm called to do it - I'm definitely not the best at anything and sometimes wonder about 'the calling', but it seems to work for me. Our bills get paid and we drive a used MB station wagon ($8K - they have little resale value) which isn't a great car to go to a rent neogiating meeting, but it drives nice. We're not keeping up with the Jones' and building a $400k house, but I don't feel the need either. Maybe that's part of the contentment you get when you are doing what you are supposed to be doing.
Several folks post stating the farming is a no-risk business since you can pay someone to take your risk or insure all of it. That might be true to a point, but to really make the business risk free you give up pretty much all the profit if it's a good year. On a bad year, maybe you are not much worse off - but then every year is just 'getting by' whether it's good or bad. In our society we are paid for responsibility and risk (or at least should be). To make farming work, I have to assume a certain level of risk to return a profit and stay in business. Also, a point that doesn't get brought up for some reason is that you need to be good at what you do - make good, informed decisions and strive to improve every year. Often rather than paying for someone else to take the risk (options, consulting, etc), it's better to pay ourselves to do a good job.
The place I see the most trading away risk is in the megafarmer model which assumes we can pay others to take the risk and the meager profits per acre made up in volume. The business owns nothing except a mower. The scale means there is no possible way to micro manage individual farms so the level of risk is quite high. Currently as long as BK laws work, the model almost works.
In the end I don't think it's possible to successfully run a business where you pay others to take all your responsibility and risk. Risk management is certainly a good tool, but it certainly isn't an indicator of success either - ie. there are successful operations who use consulting services and options and there are equally successful operations who use neither.
Thanks,
Pat | |
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Why raise cash crops??
