This was written by Noah Hultgren who is a corn farmer in Minnesota. It appeared on the Huffington Post Business section in The Blog.
Face Of Giant Agribusiness
By Noah Hultgren
According to some, I am a giant agribusiness -- the worst kind of factory farmer.
What qualifies me for this dubious distinction? Nothing except that, based on U.S. Department of Agriculture (USDA) figures, my farm falls in the biggest six percent of U.S. farms. And these farms account for the bulk of federal farm policy support.
It sounds pretty damning, which is why it is the top talking point used by opponents of farm policy looking to dismantle a system, they say, is too tilted to agribusinesses and oppresses small, family farms.
But there's a lot more to this story than a 10-second sound bite would let on. For example, the USDA considers anyone with sales of more than $1,000 to be a farm, so that six percent figure is a little misleading.
The weekend grower on the side of the road selling tomatoes from her garden would be a farmer in the government's eyes. Ditto for the young retiree trying his hand at wine-making.
Ironically, my business is probably more in line with what most of us consider a farm. It is family-run. It was passed down to me from my father and grandfather. It is a full-time effort to support my wife and kids.
And, in order to make it my livelihood, it has sales exceeding $500,000.
Again, that figure can be spun to sound really bad, since most people don't know the difference between revenue and profit. But remember, the $500,000 represents gross sales, not how much money the farm or farmer is making.
A farmer may produce half-a-million dollars worth of goods but might have to spend just as much to grow the crop, making it a break-even proposition and sometimes a losing one.
Seems odd to call these farms corporate titans, especially when you consider that the Small Business Administration classifies most businesses as "small" if their gross sales are under $7 million a year.
How much profit could a "giant corporate farm" like mine hope to generate? The USDA puts profit margins in agriculture at 10 to 15 percent.
So under favorable circumstances -- Mother Nature cooperates, market prices are fair, oil doesn't spike and you don't run into any problems like equipment breaking down and needing expensive repairs -- that $500,000 in sales could generate between $50,000 and $75,000 in profit a year, according to the USDA's estimates.
No corporate executive in his or her right mind would get into such a risky business with such little profit upside. That's why 97 percent of U.S. farms are still owned by families, not by corporations like Cargill, or ADM, or Kraft.
I recognize that some may construe this article as a complaint about farm profits or an attack on smaller farm operations, but that is not my intent.
Farm prices are way up right now and near an all-time high -- and as a result, federal spending is way down. And I know that if America is going to meet tomorrow's food and fiber needs it will take farms of all shapes and sizes.
Smaller, organic growers are part of this puzzle, as are larger, conventional operations like mine, which supply more than three-quarters of our country's food and fiber.
As Secretary of State Clinton said this weekend, "We must redouble our commitment to sustainable agriculture and food security."
She's right. If this nation is going to keep pace with an exploding global population, and if it's going to do it in a sustainable way, then responsible farmers of all sizes have to come together in supporting and encouraging technology and best management practices.
In addition, America needs to urge the next generation to to get involved in farming, despite the low profit margins and risk, to replace aging growers who are retiring.
Our farmers and ranchers are a thin green line standing between a prosperous nation and a hungry world. It's time to refocus on holding all parts of this thin green line instead of tearing it apart with manipulated numbers and disingenuous spin.
I believe that Mr. Hultgren hit the nail on the head with this article. Any other thoughts out there?
Until next time,