farming size to be profitable?

[rlee6]

After reading several threads here, I have become a little mello. What I have seen on TV on farmers' struggles makes more sense. If cutting 2000 acres of hay or having 500 heads does not give a farmer a decent profit, something is not right.

So let me ask a question to those who do full time farming, or those who want to be full time. What is the critical size of farming beyond which farming is profitable? What other changes need to be made (in the national scale) for farmers to stay as farmers?

One of my co-workers (his family) left farming because he could not keep up with equipment. He said harvesting equipment have become so huge (for better efficiency) that his family could not afford them. So, is it the efficiency of mega-size farming corporates that is causing the changes? Or is there a CIA and FBI (or even UN) conspiracy involved? /forums/images/graemlins/smile.gif

Thanks.

 

[cowboydoc]

Farm Bureau reported a few years back that it took 2000 acres for a family of four to make a $25,000 income. Read this months Western Horseman for some great articles on how the biggest ranches in the country can't even making it on ranching and farming alone. They have to diversify in other areas. I have alot of friends that farm 500-2000 acres and they do not come even close to making a decent living from it. Almost all of them have regular full-time jobs. My goal is to retire to part-time or altogether in 13 years and ranch full-time. I figure to make an income of $60-80k I'm going to need to have 15,000 acres. That will be 3000 acres of farm ground and 12,000 acres of grazing ground.

2000 acres of hay and 500 head of cattle seems like alot but it isn't much to make a living off of. The corporate farms and ranches do it by shear #'s. They operate as a machine harvesting thousands and thousands of acres. They have 1000's of head of cattle in a feedlot situation. It's tough to compete with that especially when the price of a new combine is $250,000 plus and a tractor to run a big planter, ripper, etc. is about the same price.

 

[HayDR]

It is not what you make, it is what you spend. A quarter is allot if you only have a nickel. Also the idea is to consume all the profit so the IRS gets nothing.

 

[slowzuki]

In our area (much different than the midwest!), you need to work about 500 to 1000 acres to provide for a family and you are just starting farming.

If your family has owned the land and equipment for years, you can work 100-200 acres and make a living.

A plot as small as 15 acres can supplement your income significantly if you are in a niche market, like organic something growing with goat milk and emu's or something weird.

Most farmers here have 100 to 500 acres and work half with crops or animals and log the other half during the fall and winter. Both are tough jobs but together they can pay the bills.

 

[cowboydoc]

Most farmers or ranchers I know would be happy to pay taxes if they had any income. The least of the worries with most farmers/ranchers is not avoiding the tax man for sure. There are better ways around taxes, if you do make any money, than spending it all on new equipment or something else you don't need just to save some money on taxes. With almost any corporate structured farm operation you can put profits off 10 years in the future. Claim the profit when you have a bad year. You also have to make money to spend money. Some years that doesn't happen so there really isn't a choice in spending a nickel or a quarter!!

 

[cowboydoc]

Ken,

What can you do on 100-200 acres to make a living? What wage is considered making a living? Making a living and making a good wage are usually two different things. What one person considers making a living and another person can be very different. My little brother makes it ranching but he drives a 30 year old pickup, makes do with old machinery, doesn't have money for vacations, doesn't have money to go out to a nice restaurant, or any other extras in life. The last few years he's been taking care of alot of my ground out there so I've bought some good equipment for him to use but even then he still doesn't have anything extra but he makes it. I don't think too many of the people here just get by. Most people I see have nice tractors, nice vehicles, nice homes, health insurance, retirement fund, work 40-50 hours a week, etc. You aren't going to get that on anything less than a very, very big operation and that is with 16 hour days most days..

 

[Darren]

On the other hand there are small farmers with minimal acreage that ARE making money but they're raising or growing something for a specialty market. A guy near D.C. growing many varieties of hot peppers is one example. I think he has less than five acres. Joel Salatin has written books and offers seminars on making money. He raises chickens and hogs the last I heard. The key is he sells direct to the customer and has maintained a quality rep.

Any time you're planning on doing what everyone else is doing, you're starting out behind the eight ball especially when you're dealing with large acreages. The key is to understand that the amount of acreage may be inconsequential in making money.

 

[rockinmywaypa]

Sometimes I think the only way is if your grandfather bought the farm and left it to your dad who worked like a dog to get machinery and livestock paid for and then leaves it to you all paid for, THEN you might just make enough that you'll have a life comparible to your neighbor working in town with weekends off. Otherwise the only other way is to work 40 to 50 hrs off the farm to come home and spend every nickle to hope for next years profit to find out that the ram broke out and impregnated the ewes at the worst possible time or the market is screwed because of some cow a thousand miles away or any of a hundred other scenarios that you didn't or couldn't plan on to knock you down.But it's fun trying.

 

[cowboydoc]

Yes you can certainly MAKE money with small operations. I'm not debating that at all. Can you make enough to sustain a moderate income? That becomes difficult. It's also difficult to get into a specialty market and usually it is very time consuming. You are also limited in growth potential as well. Many small operations make as much as bigger operations but the labor outlay is about equal. It just depends on which headache you want to deal with. I know specialty farmers who do special crops, greenhouses, farmers markets, etc. They make money off of it. But they also have a regular full-time job too. And people that do it full-time are in the same boat as my brother. Yes they make it and get by but they don't have a modest income by any means.

 

[MMM]

<font color="blue"> </font> "My goal is to retire to part-time or altogether in 13 years and ranch full-time. "

Retire and farm shouldn't be used in same sentence except when "from "is inserted inbetween. I go overseas to work 6wks to rest from 6wks of farm.
I have a "retirement" plan also. /forums/images/graemlins/tongue.gif