Never in our history have we experienced the diversity in agriculture as to the productivity of row crop vs. cattle producers. One can scan the internet or open any ag magazine and see headlines of “Crisis in Agriculture” and “Record Cattle Profits” that are in print within a few pages. Corn, wheat, soybeans, rice and cotton, are all below the cost of production — big time. Our farm is seeing corn yields above the national average but if we sold today and paid the land rent to my brother, we are at over $100 per acre loss. One cannot farm much more frugally than does our farm, Unusually Green Acres.
We are living the words: crisis in ag.
What happened to cause this? Books could be written but as in the Cliff's Notes I read to get through college in the '70's, the condensed Reader’s Digest version reads: China Beat U.S.
Decades ago, when the Chinese built cities and moved masses of people in and became a modern industrial nation, they found those new city dwellers wanted to eat more than rice. The resulting move up the food chain required protein to feed livestock. This protein came from the U.S. farmers. We went to a seminar then where the speaker extolled that we would never see corn less than $5 and soybeans less than $14 per bushel again. The premise was that the world's population was exploding, China and the rest of the world had to be fed, and boom times for the farmers were finally here to stay. All lies. China found Brazil, and other places, and are basically raising their own protein with no need for the farms of North America. China thinks in centuries, the U.S. in 4-year election cycles. China even has the goal of being a competitor to our farmers as to world grain export. There is also no population explosion. There is no light at the end of the tunnel.
Now, let's turn the page and read about livestock production. Record prices, record profits. We have a 5,000-acre row crop farmer who may lose close to $1 million this year. One county over, there is a cow-calf operation of just under 100 momma cows that is looking at a $100,000 profit! What happened?
There are several answers. When the row crop prices went sky high, a lot of pasture land went into row crop. Fences were pulled up and the landscape was changed in a way that is prohibitive to reverse. Cattle farmers and cattle numbers went down dramatically. We still love to eat meat — it is part of who we are as a nation, thus the demand is there with a dwindling supply and prices soar. We have a super quality of meat as well, and we turn up the nose at what little meat is imported, many times with good reason. We are blessed with a safe product in our domestic meat supply. We have an aging population that are our cattle farmers. In fact, the median age of all the American farmers is almost 60, it is called the “graying of agriculture.” These cattle farmers are not looking to expand, and it is like row crop farming, one cannot afford to get into this enterprise nor expand cattle production in big numbers. This tunnel is not dark; there is a bright light here for the foreseeable future.
So, what are the answers? The row crop issue, in our opinion, will be band-aided from Washington. You can read tax payer money much like Europe. The thing that will get one's derriere deported from office quicker than anything is seeing farmers, holding their crying wives and kids, as the family farm is sold at auction and is reported on the news daily cycle. We remember these scenes from the 1980's farm crises. There will be pressure on nations to buy our grain, but nothing will probably replace the exit of China as a buyer.
As to the livestock boom, just get ready to save up for that juicy steak we enjoy or as in the Chick-fil-A slogan, “Eat Mor Chikin.” We, as a nation, have the lowest percentage of disposable income going to feed ourselves than any other in the world — it may be about to go up. We, in the business of selling farm equipment, need to inform ourselves as to our place in this changing future. Don't depend on the experts, they were wrong before and will be again.
Until next time, keep selling and smiling and figuring...
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The North American Equipment Dealers Association (NAEDA) is a non-profit trade organization representing retail dealers in the outdoor power, agricultural, construction, industrial, forestry, lawn and garden, and turf equipment industries. In today’s complex, high-stakes environment, protection goes beyond policy; it requires a strong, informed voice. NAEDA is that voice. We know the industry, understand its challenges, and stand ready when the unexpected strikes. By strengthening dealer–manufacturer relationships and advocating for fair, forward-thinking policies, NAEDA ensures members are heard, protected, and supported. One Unified Voice: Advocating. Defending. Protecting. The voice you trust. The support you need.
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Told from the perspective of an in-the-trenches owner/operator — Tim Brannon of B&G Equipment, Paris, Tenn. — Equipment Dealer Tips, Tales & Takeaways shares knowledge, experiences and tips/lessons with fellow rural equipment dealerships throughout North America. Covering all aspects required of an equipment dealership general manager, Brannon will inform, entertain and provide a teachable moment for current — and future — leaders within equipment dealerships. |
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