The urge to grow

[Dan Powell]

Warning: some elements of this post are a bit of a rant.

I think many if not all farmers assume that they need to grow their business. The mentality is that if you are not expanding, then you are standing still or even going backwards.

Where does this notion come from?

Take it to the logical extreme and you would end up with one bloody great business farming the whole country.

It's actually mania.... a kind of madness and an example of where the human race has gone completely doolally over the past two centuries. This is not the natural state of humanity. Yes there has always been competition between neighbours, but that has usually been for a resource that was needed by both parties. Now it just seems to be a dogmatic belief in "growth."

There's only one thing that grows continuously in nature. It's called a cancer and it eventually kills the host.

The endless competition with neighbours for an extra 200 acres, so we can drive down our marginal cost of production. All it does is slowly corrode our selling price and create one dimensional farm jobs lugging slurry all day or driving a cultivator all day instead of the quite enjoyable and varied life on a small farm doing all sorts of different things.

I know, I know, it's "progress." "You've got to get on."

Just remember people, you can't take it with you, and 100 years after you're dead no one will be able remember your achievements.

Enjoy your weekend people, you might drop dead tomorrow.

 

[HatsOff]

As margins decrease you need to turnover more to make it pay.

But chucking it in and turning it over to SFI with a pet herd does start to look more appealing.

 

[Dan Powell]

As margins decrease you need to turnover more to make it pay.

But chucking it in and turning it over to SFI with a pet herd does start to look more appealing.

Ah, but why have margins decreased? It's circular.

1. Margins decrease.
2. Need to grow.
3. Extra efficiency and competition in market lead to lower prices.
4. Margins decrease.
5. Etc.

 

[DrWazzock]

Absolutely spot on.

 

[Gedd]

As margins decrease you need to turnover more to make it pay.

But chucking it in and turning it over to SFI with a pet herd does start to look more appealing.

Run faster to stand still

 

[Chae1]

 

[ollie989898]

I do like a cheery post to start a Saturday afternoon off. Enjoy the weather folks, might drop dead tomorrow.

I was going to mow the lawn but since I might drop dead tomorrow I might not be around to enjoy it so I'll leave it for the wife's second husband to sort out, shall I?

 

[jackrussell101]

One thing I do admire the French for is sticking together and keeping that way of life so to speak, the British way is cut throat

 

[DrWazzock]

I do like a cheery post to start a Saturday afternoon off. Enjoy the weather folks, might drop dead tomorrow.

I was going to mow the lawn but since I might drop dead tomorrow I might not be around to enjoy it so I'll leave it for the wife's second husband to sort out, shall I?

So the cheery way is to keep flogging the get bigger, produce it cheaper mantra is it?
Not in my book.
Its cheered me up no end to read there are others out there who value more ideas than just scale and expansion.

 

[som farmer]

farming was forced to increase production, during WW2, to help feed the nation, and correctly so. And after the war, to help the country to stop getting in such a shortage again.

Grants, subsidies, advice all available to farmers to expand production, until it moved into over supply, by which time we were in the common market. Then lunacy set it, still encouraging more production, but curtailing prices with quota's, set aside, intervention stores etc.

The belief we have to produce more, grow bigger etc, has been, and still is the way we have been taught, they call it efficiency now. We still get grants to increase efficiency, get high tec, robots etc, much of those grants are nothing more than 'aid' to the developing tech industries, we pay our grant, + 60% to them.

It is the need to get efficient, that is preached to us, or basically reducing our COP, but to cover the expense of gearing up, we need to produce more .............

Being a cynical old git, the push by guv's to get more efficient, has got us deeper into debt, so we need to produce more to spread the cost ................

By producing more, prices are usually driven down, so need to produce more, and that, l am quite sure is any guv's aim, to keep the price of food cheap, and we have fallen for it hook line and sinker, and where has it got us ?

Go to any ag show, and think about the number of trade stands advertising their products, to tempt us, to buy. Then realise all of them rely on us farmers, to earn their living, think parasites.

Basically we are running faster, each year, to stay in the same place, ever decreasing circles. Not only that, we stand accused of polluting the planet, no one gives a toss about us.

As it stands today, the milk price has dropped %25 ish, yet we are less than 1% over last years production, and product to the consumer hasn't dropped much.

Economics is dead simple, demand, versus supply.

So, farming's answer to lower prices, is, produce more, which is exactly what we have been, and still are, taught/told/advised to do, 'spread the cost over more production'.

All more production means is lower prices, so, what do we do, get more efficient, increase debt to fund technology, expansion etc.

What we need to do, is decrease production, to below demand, back to the simple truth, demand v supply, with a caveat, 'until the politicians interfere'. To them, cheap food is a priority, its not taxed, so more money spent on taxable goods, and a 'full' population, is better for their jobs, than a hungry one, so they interfere.

And we arrive at today's position, where it is smaller profit margins, with ourselves, helping to achieve that.

 

[som farmer]

So the cheery way is to keep flogging the get bigger, produce it cheaper mantra is it?
Not in my book.
Its cheered me up no end to read there are others out there who value more ideas than just scale and expansion.

we have cut back drastically, after the initial economic pain, it makes life a lot easier. Admitted, we were forced down that road, by events, and otherwise, we wouldn't have done so.

but we don't regret it.

 

[HatsOff]

Ah, but why have margins decreased? It's circular.

1. Margins decrease.
2. Need to grow.
3. Extra efficiency and competition in market lead to lower prices.
4. Margins decrease.
5. Etc.

Capitalism 101.

 

[ollie989898]

One thing I do admire the French for is sticking together and keeping that way of life so to speak, the British way is cut throat

Fudge-you capitalism. We adopted it from the Americans. It is toxic.

 

[ollie989898]

So the cheery way is to keep flogging the get bigger, produce it cheaper mantra is it?
Not in my book.
Its cheered me up no end to read there are others out there who value more ideas than just scale and expansion.

In reality all primary industries have experienced consolidation. There is no getting away from the fact that in general scale lowers costs per unit produced. It's as inevitable as gravity.

But there is no rule that says you can't do what you do and enjoy it as you always have. Some people relish the challenge big scale enterprises bring.

 

[DrWazzock]

In reality all primary industries have experienced consolidation. There is no getting away from the fact that in general scale lowers costs per unit produced. It's as inevitable as gravity.

Up to a point then things get too unwieldy. I’ll bet my costs of production aren’t any worse than Billy Bigballs who has just spent £500k on a new sprayer.

 

[ollie989898]

Up to a point then things get too unwieldy. I’ll bet my costs of production aren’t any worse than Billy Bigballs who has just spent £500k on a new sprayer.

There are many factors that contribute to productions costs, there is no right answer and a variety of ways to skin a cat. But it is true that primary industries have experienced general consolidation since the dawn of the industrial revolution.

 

[crashbox]

Warning: some elements of this post are a bit of a rant.

I think many if not all farmers assume that they need to grow their business. The mentality is that if you are not expanding, then you are standing still or even going backwards.

Where does this notion come from?

Take it to the logical extreme and you would end up with one bloody great business farming the whole country.

It's actually mania.... a kind of madness and an example of where the human race has gone completely doolally over the past two centuries. This is not the natural state of humanity. Yes there has always been competition between neighbours, but that has usually been for a resource that was needed by both parties. Now it just seems to be a dogmatic belief in "growth."

There's only one thing that grows continuously in nature. It's called a cancer and it eventually kills the host.

The endless competition with neighbours for an extra 200 acres, so we can drive down our marginal cost of production. All it does is slowly corrode our selling price and create one dimensional farm jobs lugging slurry all day or driving a cultivator all day instead of the quite enjoyable and varied life on a small farm doing all sorts of different things.

I know, I know, it's "progress." "You've got to get on."

Just remember people, you can't take it with you, and 100 years after you're dead no one will be able remember your achievements.

Enjoy your weekend people, you might drop dead tomorrow.

Not quite.

It's just that you hear (farming press, gossip) about the ones that have "got on".

The average size of a milking herd in UK is about 150, less than UD/NZ/AU but double that of France.

I agree that there are people that prioritise growth over profit/lifestyle.

 

[serf]

Anyway where's BOSS
Thought he'd be here by now ....

 

[ollie989898]

Anyway where's BOSS
Thought he'd be here by now ....

I believe goes by the moniker of 3000 acres and counting now?

 

[serf]