John Phipps: Not All Small Farms are Doomed

Johns World
Are all small family farms threatened by larger operations? John Phipps gives his take in John's World. ( Farm Journal )

Secretary of Ag Sonny Perdue ruffled some farmer feathers this week with a remark about the future of small dairies. There has been a lot of media coverage with varying degrees of accuracy since, but I think the best summary was by Chip Flory and you can find it on AgWeb.

The whole flap centers on the economic viability of very small dairies, and frankly that handwriting has been on the wall for decades. Due to the nature of that type of operation, with high and continuous labor requirements, widely available but expensive automation, and an unhelpful regulated market, we’ve been watching one-family dairies go out of business my entire career. Dairy just scales up too well, and even dairy farmers won’t accept any type of change to dairy pricing that protects only those small operations – assuming such a policy is possible. Which I doubt.

But it is the inference that small farms of all kinds are doomed as well that needs to get stopped by clear evidence right now. For grain farms like mine, small operations of a few hundred acres are not merely viable but probably among some of the lowest cost producers of commodity grain in the US. Virtually all small farms involve at least one family member working full-time off farm, or even better receiving retirement checks from past employment, I look at operations around me with envy.

Using equipment likely handed down from parents who farmed, owning a significant chunk of their relatively small acres, and with secure health insurance, dismissing them as part-timers is a mistake. Operations like may be the tail end of a family farm, but if you remember my analysis of how land is constantly accumulating and dispersing as families grow, we are always making more part-timers or post-timers as I call the second career operators. No big farmers is going to rent ground away from brothers and nephews, and the acres inherited allow these smaller farms to capture more of the growing landowner share of income. If you want to sound a warning, it should be for the now perilous mid-sized farmer. Unless you are born to or married land the economics of supporting a family on rented acres is becoming impossible in the 500 to 1500-acre range, even with one spouse working. Like small dairy farms, this is the groups in grain farming that faces a stark future. Oddly enough, one solution is to get a job and join the ranks of the unwisely disrespected small farms.

Listen to AgriTalk Host Chip Flory's Interview with Ag Secretary Sonny Perdue