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Jacob Bunge (WSJ, Family Farms)

Oct 30, 2017|

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

The idea of the family farm has been something that's almost. Key to the the development of America over its history. But joining us now is Jacob bungee from the Wall Street Journal talking about how family forms of changed over the last couple decades and what it's meant to the industry Jacob thanks for coming on. I. Jacque we're doing well can you talk a little bit just first about the shift that we have seen as far as the number of these massive forms. That have sprung up over the last couple decades. You have all of the and the size. That the US citizens Armon and we can get this. In terms here. Recovers and their owners so those who have farms produce and corn and soybeans and and we that sort of thing has been steadily ticking higher. And so this has to do a good number of things. Some the sort of some financial incentives for producing these trucks. The system doing things like advances in machinery. Advances soon in top technology or security and then gee you know crops for instance which has made treating weepy here. And and so what we have now here the last few years certain list. Series back to back. Record size crops we've had crop prices really pushed down all that supply has come onto the market. Adding financial pressures for farmers small sizes. And simply question out there is extent to which this is going to exacerbated. This cycle that we've seen over the last couple of decades as we which are ready airwaves with a large farms growing larger and larger. In terms of how big these farms have gotten like how much are we talking in terms of sales how big are they now. Well there's some then arrange a foreign. Must tracts by the USDA. Going back. Decades and so what. The largest bracket. Includes farms it's will. Produce more than a million dollars in annual sales per year and so if you take this across all agricultural operations. Dispute and grain farms and livestock carrier and so on. Doe's arms some produce more than a million dollars every year in and revenue are only about 4% of the total but to fume. Credit in terms of how much of the agricultural groups are the countries that state produces wines are being. About two thirds of all the products each year. Let's look at this in a couple different ways first what does that end of doing to competition how hard is it for smaller farms to get into that. Well this goes to the cycle that we talked about them immunity of the a very large bombs continued to get larger. Hand out the smaller ones. You know that are there in some cases able to maintain that. In other cases they get swallowed up there and some recess to do it a number of things is one of them is just very. Plainly the average age. The US farmer. Who is getting older and older than troops that's partly to do with the fact that it's more of the younger generations of these small farming family is sort of moving. Further away. They're moving to cities and so as time goes by. People in charge of running the farm. Some cases parents or grandparents who wind up passing it down to. They're children when they gather retire when it and the children may live in town adamantly tenacity a long ways away and spent my hand once or getting. Rented to another farmer. And so often is the case at the very largest farms had. Deep pockets to pay. Higher rates to rent that land or in some cancers that are reputation may be such that that are. Known for making regular payments and taking Catalan and that sort of thing and so that they can make it really difficult if your. Smaller farmer or somebody who's just starting counts to or get a equipment or that way without. Employment at these large farms are they still employing the same number of people that smaller farms wart or did they move more towards technological solutions and push people out of the industry. Well over time. The advances we can't let a few minutes ago on senses. Equipment and the senses. Biotech crops and things like this this is let farmers sort of all sizes and two more. With less. Manpower basically. But the very largest farms. An additional advantage in the sense that a are able through the economies of scale as just being very big that there are able to. The best rates arms supplies and they're able to sometimes negotiate better prices for their crops they wind up having more money left over. To invest in new technology which can further. Save labor and retire cheer about things like. Using airplanes and satellites serve or drones in some cases to go out in the carrier crops and see if there's a patch Estrada if there's a sprinkler system's not working where you know ordinarily might have to have somebody drive around and spent part of their day. I respect in the sorts thanks. When we talk about anti trust legislation and it in antitrust. That that type of structure. We're typically not looking at something like the farming industry because it's still relatively diversified despite these huge farms. It is there is some kind of push though to try to break these up at all. Well I think that that is still disparate effect you know large size and so the year. You know large percentage of output. A smaller number of arms or present is still fairly fragmented and distributed. And in some cases so these some large farming operations can go towards more diversity in the sense that they might have a large. I don't grain farming operations and some may also invested and lives. Two out of whether they're commodity markets cycles and that way about it. You know you're you mention anti trust in and concentration of economic power band as we've talked to some of these larger farmers and interest and point comes up them then misses in the sense of some of the mergers that we seem marks the very large agricultural companies and we've seen some seed in pesticide producers some. For a cents down 12 pots. Merging together. They hear is in the process of closing a deal to acquire Monsanto we've seen some debate fertilizer companies combine. And deployed has been made on the part of some obvious farmers' debts they themselves need to to get bigger and at a mass scale in order to compete and and kind of keep that very big suppliers armistice that that you figure themselves. Or goodwill Jacob thank you very much for the time we appreciated today and thanks for all the research and business. That's Jacob bungee from the Wall Street Journal notes we we hear about the changes that happen Ian. The in the farming industry. I think we're a little bit insulated from here in New England just which has Garcia were we're not one of the major forming centers I mean even where you going to places in New England you have. You know significant amounts of farms use some of the parts of Connecticut did do western mass Vermont New Hampshire even the parts of those states that do have significant farmland. If there's still tiny. Fraction of what we see in the rest of the country via now I think you make an inch in point about employment I'd be interest to see what's. You know the different services and products suppliers to those farms how they're gonna be doing like a John Deere or lettuce seed supplier for the next few years how that interaction changes as well as food prices wonder how this impacts so uninteresting off farm statistics in the last sixty years since 1950. Forming employment has dropped by 80%. Production has risen by 300%. Just mine and that's not the same with a lot of industries.