How do farmers make any money?

[hayden]

Farmers are the only business that I know of that buys everything at retail and sells his crops at wholesale prices dictated by some pencil pushers that guesstimates crop production and fluctuate prices accordingly.

Good point about retail vs wholesale, but I think there is more to crop pricing than some Poindexter throwing darts at a board.

 

[Jstpssng]

Farmers are the only business that I know of that buys everything at retail and sells his crops at wholesale prices dictated by some pencil pushers that guesstimates crop production and fluctuate prices accordingly.

Paraphrase of a JFK quote.

 

[steve tym]

Government subsidies?

 

[quicksandfarmer]

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?

For the most part, the inputs to agriculture -- seed, fertilizer, pesticides, etc. -- are controlled by monopolies. And farmers who produce commodities sell to monopolies, whether it's Cargill or Perdue or Smithfield.

The monopolies take most of the profit. The actual farmer gets a small piece, and all of the risk -- the risk of crop failure, the risk of poor commodity prices, the risk of physical injury.

 

[nybirdman]

In my part of NY it was the dairy industry,at one time there were 27 family farms(about 20 square miles) now there is three,same number of acres and probably more cows.
Typical herd was maybe 100 head,now maybe 1500 on each of the three remaining.
They have bought up all the small farms.They seem to spend money like water;have no idea how they make it work or make a profit.

 

[Lineman North Florida]

A lot of people are government farming, just Google EWG Farm Subsidies and go to their website put in your state and then your county and you might be shocked at what kind of money some of your neighbors are getting from the government, then you will know how they bore with the big auger and afford all them new tractors and equipment and a new 1 ton diesel trucks every year.

 

[Hay Dude]

Im a farmer. I’m not a big timer, but enough to make a living. I gross about 200K in farm/year crop sales. I don’t have any more than I say, and don’t waste time posting pictures of millions of dollars of machinery I don’t own.

I’m a moderate size farmer, and I’m proud of my worn out machinery and the crop I make each year lol

I find more farmers go under because of poor business decisions on top of an already risky way of life to begin with.
Even with good decision making, you can still get whacked. I worry about it all the time. Keeps you awake and on your toes. Although I did fall asleep once while laying on the ground under a tractor fixing a sensor.

My secrets to staying in the game and also growing in size every year are the following:
1. Resist temptation to own too much new equipment & keep overhead low.
2. Off farm income to add stability.
3. Marry well.
4. Believe in The Lord

It’s simple, really. Farming is just like any business, but one that carriers a lot more risk. You minimize your risk, and sell to the highest bidders you can.

 

[Jrasband]

Look at these farmers and see what they have in common - all very successful. Regenerative farmers that sell direct to consumer.

Joel Salatin - Polyface
Greg Judy - Green Pastures
Gabe Brown - Brown's Ranch
Steve Kenyon
Jim Gerrish
Miller's Bio Farm
Dutch Meadows

And countless others... these are just a few popular ones - the last 2 are Amish.

Farmers that depend on subsidies or insurance are not good examples and are not sustainable.

 

[Hay Dude]

Look at the farmers these farmers and see what they have in common - all very succesful. Regenerative farmers that sell direct to consumer

Joel Salatin - Polyface
Greg Judy - Green Pastures
Gabe Brown - Brown's ranch
Steve Kenyon
Jim Gerrish
Millers Organic
Millers Bio Farm
Dutch Meadows

And countless others, these are just a few popular ones -the last 3 are Amish

Farmers that depend on subsidies or insurance are not good examples and are not sustainable.

I know one of the Amish farms well.
Unfortunately, depending on farm subsidies is ingrained in American farming now.
I don’t get subsidies, unless you count that I don’t pay state sales tax on farm machinery, parts, etc. I’m on my own and always have been.

I don’t want any handouts……but they would come in handy.

 

[Hay Dude]

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?

Many of the operations you watch on You Tube make significant revenues from their You Tube popularity.
One I have talked to said he makes almost as much off You Tube # of views as he does in crop sales.
My son constantly urges me to do this.