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Tag: Are small family farms being squeezed out of existence

why are small farms going out of business

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Why do small farms fail?

Here’s reason number one that small farms fail. You see, many people are attracted to farming because they love the notion of the lifestyle. They want to farm or grow produce. Or have a collection of animals, and they want to spend their days in the sunshine, producing something with their hands and being out on the land.

Why do farming businesses take so long to grow?

And one of the reasons that many farming businesses make it that long and go much longer is because they’re subsidized. Not by the government. But by the farmer, who is most often working a second job so that the farm can work. And that’s cool if that’s what you want to do. But, again, that’s more of a hobby farm and not really a farming business.

Why is farming so hard to make money?

And these things happen in any business, so a business has to amass enough earnings over time to weather these storms. And beyond business cycles, farming is impacted by drought, disease, storms and other calamities. Now, I know many people want to get into farming and they don’t have much money.

Are small family farms being squeezed out of existence?

As small family farms are squeezed out of existence, investment groups and equity firms are buying more and more land, according to a Reuters article. “The World Bank and the United Nations Food and Agriculture Organization (FAO) cited the trend in a report in January, noting a ‘sharp increase’ in agricultural investments the world over.

What is Longfield Farm?

At Longfield Farm, production and market diversity are what make us profitable. We sell grass fed – grass finished lamb directly to our customers. We sell eggs from the farm, at farmers markets and to a restaurant. We sell pastured broiler chickens through a CSA. We sell fine woolens and fiber crafts at juried craft shows, at famers markets, and at a State operated, Taste NY store. We sell Pam’s greeting cards made from photos of critters on the farm, and we sell a book that I wrote and Pam illustrated at several markets. Everything is also for sale at our website. And, of course, we sell over 100 breads a week at farmers markets. Some growers might argue that’s we’re trying to do too much. Not so, sez I. Even though we’re a couple 60-something seniors working a tiny farm, we’re doing quite well. And if we can do it, you can do it!

What is the problem with industrial agriculture?

We grow enough food to provide nearly 3000 calories a day to everyone on Earth. The problem is the industrialization of food production and its distribution. The failure of industrial ag as a valid business model is blatantly obvious. Consider that for decades farm failures have exceeded farm creations by a large margin; That the American diet is miserably unhealthy because it is created by a miserably unhealthy production system; And that industrial farming has exhausted America’s soils through tillage and the use of synthetic fertilizers and pesticides. This is a system that abuses people, animals, the land and water. It should have been abandoned long ago! So why hasn’t it?

What is the solution to all things agricultural?

So what’s the fix? Well, one thing that isn’t the fix is Congress. Congress’s solution to all things agricultural is to “prop up the industry” with subsidies. The feds spew billions into agriculture to help dairy farmers survive milk price failures, to help soybean farmers survive the trade wars, and ranchers to deal with the collapse of beef prices. Subsidies temporarily mitigate the anguish of watching your milk being poured into a ditch, your soybeans rotting in the field, or your cattle selling at auction for less than it cost you to raise them. But subsidies don’t provide a livelihood. The family farm is still failing. And the dignity of the American farmer is failing with it. “Propping up the industry” is like giving a shot of morphine to a cancer patient. It relieves the pain, but it doesn’t cure the disease. Famers don’t want to be propped up. They want a business model that works.

How many farms went out of business in 2017?

According to data from USDA’s National Agricultural Statistics Service, between 2015 and 2017, 37,000 farms went out of business. That’s an average of 356 farms a week. That’s crazy!

Why is eating thrice daily important?

It requires that the things we put in our mouths be flavorful, nourishing and above all, safe. The act of eating helps determine the health of the most important people in our lives.

Does growing corn make money?

One savvy, 20 year old, whose family grows specialty crops for restaurants in Chicago, said it perfectly, “Those people growing thousands of acres of corn, never make any money. When they get a good harvest, corn prices fall; in a bad year, nobody has any corn to sell. How do you let someone else set your prices, anyway?” How come he gets it, and people who have been farming for 30 years don’t? Commodity ag is a bad deal for farmers and consumers alike. Food is part of our life support system. It is not a commodity!

Why don’t farmers prioritize marketing?

First, they simply don’t prioritize marketing until they have product to sell and they fail to understand how critical it is to build a strong brand for their farm

Why do people like farming?

You see, many people are attracted to farming because they love the notion of the lifestyle. They want to farm or grow produce. Or have a collection of animals, and they want to spend their days in the sunshine, producing something with their hands and being out on the land.

What animals can you add to a chicken ranch?

With livestock, you get some chickens then rationalize adding pigs, cows, sheep, goats, rabbits…even donkeys and geese to the mix.

What do farmers buy at the end of the month?

They just buy the feed, buy the seed, get to work, go to market and hope they have money at the end of the month.

Why is a business considered a business?

A business is a business because it has customers that buys from it.

How long do agriculture businesses last?

For example, 50 or more of agriculture businesses are still going after five years, whereas only about 36 of construction businesses make it the long.

What does "sell at an attractive profit margin" mean?

And sell at an attractive profit margin. That means focusing on high value crops and products.

Why do people oppose the Farm Bill?

Their reasons are ecological, economic, and political : Crop insurance is bad for the land and also bad for the taxpayer. In 2012, the harvest price option boosted payouts to corn and soybean farmers by $6 billion — money that comes from the federal government and thus from the pockets of average citizens. “The overwhelming cost is borne by us,” says Joshua Sewell, a policy analyst for Taxpayers for Common Sense. “We also bear the cost of the crop-insurance companies, as well as the cost of loss when it occurs. It’s a triangle of waste.”

Where did Joe Lourenco and L ucy live?

L ucy and Joe Lourenco emigrated from Portugal in 1984 as a newly married couple; they were only 19 and 24 years old. They spent the first few years of their life in America working in California, saving all the money they could. Idaho seemed like the perfect place to start a farm, so they moved to Emmett in 1992. “We started with 40 cows and barely made enough money to eat,” Lucy says. “But it’s a beautiful business if you love the animals.”

What cuts did Obama make to the USDA budget?

This year, President Obama proposed $9 billion in cuts to the USDA budget — cuts that focus in on crop-insurance programs such as the HPO policy. It’s impossible for the budget to entirely eliminate the Harvest Price Option plan, but Obama’s proposed cuts would drastically trim the federal funds that undergird it.

What is local food freedom?

Many libertarian-leaning Americans are also advocating for what they call “local food freedom” as a way to free up the connection between farmer and consumer. The Wyoming Food Freedom Act is one example of this. Signed into law last March, it fights for the deregulation of locally produced foods.

Why are small farms important?

Small family farms were traditionally tied to the good of their communities and their environment: Their smallness and generational longevity helped foster communal rapport, accountability, and stewardship.

How many farms were there in the 1930s?

In the 1930s, the United States was home to 6.3 million farms; today, there are approximately 2.2 million, and fewer every day. The average age of today’s farmer or rancher is 59 years old, and many are retiring without a successor, as their children don’t want — or can’t afford — to take over the family business.

What does Lucy say about Joe?

Joe prefers working in their corn and wheat fields: He’s the dreamer, Lucy says, the one with vision. “Reading and writing is not his thing, but he can see and do what he has a vision for.”. Lucy handles the bookkeeping and finances and makes sure they have money saved for the bad years.

Why are farmers fewer workers?

About one in four farmers explained that fewer workers means they can’t get ready for the season correctly, which will result in smaller harvests. That’s compounded by how many have pivoted their businesses—more to direct-to-consumer, a model that demands more labor and more overhead, like packaging for retail items.

Why are farmers losing money?

The poll finds that more than 35% of farmers experienced an average drop in revenue of over 51% in March and April, compared to the same period the previous year, due to a lack of sales to restaurants and at farmers’ markets. The concern for them is getting stuck with goods they can’t sell; of the almost 37% who expect to have this problem, over half don’t have cold storage or another way to salvage what they’ve produced.

How long has Cooperband been farming?

Cooperband, who’s been farming for 15 years, credits the goat cheese deal for keeping her farm intact.

Where is Prairie Fruits Farm?

The timing ‘could not have been worse’. Leslie Cooperband of Prairie Fruits Farm, a goat dairy and farmstead creamery with a small orchard in Champaign, Illinois, felt the economic crunch, because the majority of her sales from her close to 80 acres were wholesale to restaurants and food service.

Will small farms go bankrupt in 2020?

One-third of small independent farms could go bankrupt in 2020 due to COVID-19.

Why do farmers file Chapter 12 bankruptcy?

Farmers use Chapter 12 bankruptcy because it combines the simplicity of Chapter 13 bankruptcy — usually used by individuals — and the higher debt levels allowed with Chapter 11 …

Why are farms going bankrupt?

Rising interest rates are the other major reason why more American farms are going bankrupt. After holding interest rates at virtually zero percent for seven years after the Great Recession, the Federal Reserve has been steadily raising interest rates for the past three years. Low interest rates encourage farmers to take on cheap debt, buy farms and expensive farm equipment, and cause farmland prices to rise.

Why is Chapter 12 filing increased?

The increase in Chapter 12 filings reflects low prices for corn, soybeans, milk and even beef. The situation for most farmers has worsened since June under retaliatory tariffs that have closed the Chinese market for soybeans and damaged exports of milk and pork.

Why do central banks hold interest rates low?

When central banks set interest rates and hold them at low levels in order to create an economic boom after a recession (as our Federal Reserve does), they interfere with the organic functioning of the economy and financial markets, which has serious consequences including the creation of distortions and imbalances. By holding interest rates at artificially low levels, the Fed creates " false signals " that encourage the undertaking of businesses and other endeavors that would not be profitable or viable in a normal interest rate environment.

What are some examples of malinvestments?

Some examples of malinvestments are dot-com companies in the late-1990s tech bubble, failed housing developments during the mid-2000s U.S. housing bubble, and unfinished skyscrapers in Dubai and other emerging markets after the global financial crisis.

What did Warren Buffett say about the tide going out?

There has been so much economic distortion from a decade of record low interest rates that it’s impossible to determine all of the industries that will be affected by rising rates – as Warren Buffett said, "only when the tide goes out do you learn who’s been swimming naked.".

Who is Jason Frerichs?

Unfortunately, when national interest rates rise, the payments on much of that debt increase as well: Jason Frerichs, a 33-year-old rancher from Wilmot — a four-hour drive away — stood up at the town hall to urge Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, to keep rates low.

Why is the farm disappearing?

Another reason for the disappearing family farm is the ever-increasing disparity between dwindling income and soaring expenses. Net farm income in 2000 dropped to $39.7 billion—the lowest since 1995. On the other hand, production expenses rose to $197.5 billion or 88 percent of gross cash income—the highest since 1980-1984.

What happens when small farms vanish?

As small farms vanish from the countryside, with them disappears one of the best environments capable of producing strong, character-driven families. This—building strong character—is the most tragic loss as family farming dies out.

What percentage of farms are owned by families?

Even though 90 percent of all farms are still owned by families or individuals, more and more farms are becoming “corporations.”. These giant agribusinesses are not just involved in local farming, but also in the distribution, processing, storage and retail of farm products nationwide.

How does subsidy affect the global economy?

Subsidies can lead to chronic overproduction and dumping of surpluses on the global market, which often forces smaller, non-competitive producers out of business. The abandoned land is then swallowed by larger conglomerate farms.

Why are subsidies important in agriculture?

These items must be heavily subsidized to keep prices artificially low on the world market. Yet subsidies—money paid to industries to produce goods more cheaply for a nation so that it can better compete in the global market—can harm the family farm.

How many people have been left destitute in the land grab?

The General Agriculture and Plantation Workers Union reported last year that more than 60,000 people have been left destitute as a direct result of the land grab initiative in 2009, since the attacks began in earnest last February.

Why is agriculture important for mental health?

Over centuries, an agricultural lifestyle presented favorable conditions for the mental development of children because it exposed them to an immense variety of stimuli. It allowed them to channel their boundless energy in helping parents care for animals, collect eggs, grow vegetables and harvest grain.