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Equipment is an insane cost. That's why there are so few new farmers. The start up cost is astronomical. A combine, for example, can run to $400-500k — a piece
by erichurkman 8y ago
Equipment is an insane cost. That's why there are so few new farmers. The start up cost is astronomical. A combine, for example, can run to $400-500k — a piece of equipment that taking up barn space for 48 weeks out of the year. Add in your tractors, planters, spreaders, sprayers … add on top of that your land costs. Many farmers don't own all of their land outright, they hold medium/long term leases. Miss a single year lease costs and you lose the land, which forever drops your future earnings, lowering your margins, and bringing you closer to bankruptcy. There's a minimum amount of land you need to farm to even break even. You add more acres in good years to maybe save up enough for equipment replacement, or a new truck.
When you lose the land, lease, or go bankrupt, your land gets snapped up by huge corporate farms that can run at a higher margin, driving down food prices over the long term, making smaller farms less and less viable.
- romed 8y agoWhy would a farmer own a combine? Aren't they owned by specialized harvest outfits? I don't have any experience in the business but when I was a kid and we needed the hay cut and baled we called the guy who brought in the hay baler on a low-boy. Nobody owned their own.
- erichurkman 8y agoRent vs. Own comes down to controlling your own harvest: renting means you may miss out, sometimes by weeks, of optimal harvest. You may have had to book a harvest weeks or months in advance. You may have to fork over cash months in advance. You may have to pay even if a field's yield is ruined due to summer floods. If you own, you can select even segments of fields to harvest at more optimal times (a down grade, or wetter, portion of a field may harvest differently than an uphill, drier portion). It sucks either way.