How do farmers make any money?

[LHF2019]

I'm not a farmer, never have been, and never will be.

Couple examples from many many years ago.

 

[CasualObserver]

Farm subsidies need to be directed at a reasonable size family farms, not major corporations or mega farms. There needs to be a cap to how much one entity can receive in subsidies. Grew up on the family farm in the Midwest watching several families buying up other local family farms to combine into mega farms. We knew one of them personally from church. Their answer to how they did it? He told us that they'd take the government subsidies and every two to three years and use use them to buy another farm outright and expand the operations. Government would then pay them more subsidies since they were now larger, rinse and repeat.

 

[fishheadbob]

Sold the 20 beef cows and related equipment 25 years ago; tired of maybe breaking even in a good year. I was out for a year when a friend asked if I wanted to partner in an established Christmas Tree farm. After 2 years I sold my half to my partner (good partners are hard to find) then grew trees on my home acreage; still at it. I'm never going to get rich doing this but the venture is profitable most years.
Before you jump into Christmas Trees realize that it takes about 8 years before you have your first tree ready, then all you have to do is develop a customer base for your product. That takes time. For the first 8 years you are bleeding money on equipment, seedlings, chemicals, property taxes and on and on. I work on the trees part time 10 months of the year, and have very good employees that return every Christmas season, probably because I pay them exorbitantly. I lost one employee (died), another has been with me for 25 years, others are newer as business grows and more help is needed.
Trees are a lot easier and less time consuming than livestock

 

[Mcdust]

I'm not a farmer, never have been, and never will be. But I'm fascinated by youtube videos of farm operations, in particular larger operation, and I can't help but wonder how they are able to survive. Maybe the answer is they aren't surviving? On the surface it looks to me like the people making money are John Deere (and others), Monsanto, and ADM. I see massive investments in equipment, and very expensive equipment at that. Multiple row crop tractors, all sorts of planters and other implements that I expect are very expensive, combines and all the different heads, specialized carts for mixing or hauling product, huge bins with auger systems to load and unload them, several tractor trailer trucks with specialized trailers, etc. Oh, and huge storage and workshop buildings, Denali trucks for everyone, few side by sides, and one or two tele-handlers. Probably a couple of skid steers too.

Can anyone help me understand how this works? What does it cost in equipment payments and operating costs plus seed, fertilizing, weed control, and proprietary seeds? How many acres typically get planted? Then what are the harvest costs, gathering, storage, and ultimate transport to a buyer? How does this break down per acre, and what is the final crop value per acre?

If our fearless leaders stop subsidizing worthless ethanol that ruins every thing it touches maybe there will be cheaper food (and gas) and more farmer profit

 

[part-time-Farmer-NC]

I looked into "crop ins" they charge per crop, meaning, peach, pears, blackberries, grapes etc. I designed our u-pick for the eventual crop loss of some varieties but not a total loss for all. Crop insurance wouldn't have benefitted me unless I had only planted one or two types of fruit.

As for making 3-5 years peach farming, you are about on par or above average to others. Ours is about 2/5 years. I did quit trying to use burns to prevent frost when peaches are blooming. If it goes down as low as mid 20's the set fruit freezes and drops anyway.

Once these peach trees die out, I'm probably not going to replace them. Got about 30-40 pears so don't need more of them, apples don't do so hot here.

I'm getting older so won't ever full appreciate the value of newly planted trees. Although peaches usually make a decent amount in their 3rd year in the ground, if its not one of the 2/5 years...

It takes my wife and I about 2-3 months to prune everything and get it shaped up at a leisurely pace. So it is a lot of man/woman hours.

I see it as an exercise program as my day job is a desk/recliner job. Gonna get some tee shirts printed one day... Farmer Jim's Gym, will workout for food....

 

[JLinOK]

I'm not a farmer, never have been, and never will be. But I'm fascinated by youtube videos of farm operations, in particular larger operation, and I can't help but wonder how they are able to survive. Maybe the answer is they aren't surviving? On the surface it looks to me like the people making money are John Deere (and others), Monsanto, and ADM. I see massive investments in equipment, and very expensive equipment at that. Multiple row crop tractors, all sorts of planters and other implements that I expect are very expensive, combines and all the different heads, specialized carts for mixing or hauling product, huge bins with auger systems to load and unload them, several tractor trailer trucks with specialized trailers, etc. Oh, and huge storage and workshop buildings, Denali trucks for everyone, few side by sides, and one or two tele-handlers. Probably a couple of skid steers too.

Can anyone help me understand how this works? What does it cost in equipment payments and operating costs plus seed, fertilizing, weed control, and proprietary seeds? How many acres typically get planted? Then what are the harvest costs, gathering, storage, and ultimate transport to a buyer? How does this break down per acre, and what is the final crop value per acre?

In Oklahoma where a lot of old time farmers get lease bonuses (oil and gas), farming is just and expensive hobby, lol. Others survive with the help of the farm bill and still others go broke. Sometimes it is a roll of the dice.

 

[ning]

When someone asks me “hows the money in farming”?
My answer is “Like soup through a fork”

I took a “bottom line” approach to it. When I started for real about 20 years ago, I was given the opportunity to mow fields. I had 2 tractors and just dragged mowers behind them and did a lot of light land clearing, too.

Then I got the idea that rather than a couple rotary mowings, which seemed like I was cutting viable hay and leaving it, why not bale it instead? Most of my land owners were happy to get rid of the field mowing costs.

I crunched the numbers. I bought mostly relics and junk and started. Then it just grew larger and I was able to afford a step up from junk.

I just took on an additional 170 acres in the last 2 years. It keeps on growing. One thing I will never do is pay rent for hay. I did one time and it’s just a waste of my money

Maybe someday I’ll own a Fendt

 

[DadofTim]

My Father told me "Farmers don't make any money, they handle a lot of money."

 

[jigs_n_fixtures]

My grandfather was a very good card player and consistently won. He knew the odds of every hand and could read peoples tells well.

It always bothered him that my grandmother considered card playing, as gambling but didn't consider farming/ranching to be gambling. As he saw it, the odds and outcomes were far more predictable playing poker or pinochle then they were ranching/farming. He never had bad weather maim half his cards. He did lose half his cows in the "blue snow" when it snowed 22-inches, followed by freezing rain (which turned the snow blue) and then dropped to 22 below zero, and froze their legs in place. He did have dry years when he couldn't irrigate the hay. Farming was always unpredictable.

So, far as he was concerned farming/ranching was a lot more of a gamble than cards, and there was no way to calculate the odds of winning or losing.

 

[spruce Deere]

“If you want to make a million in farming, start with 2 million”.

More like 3 million anymore to make a million....