4 ms·

Sorry to hear about the farm. Can you talk a little about the financial aspects...cost, milk price etc of your small farm? Do larger farms make a little on each

Sorry to hear about the farm. Can you talk a little about the financial aspects...cost, milk price etc of your small farm? Do larger farms make a little on each cow but multiplied by 5000 ends up being a decent sum? I guess buying tractors, building sheds etc might be more cost effective with larger farms--spread over more. Also pricing power.

kickout 8y ago
Not OP, but work in Agriculture. Margins are so thin, you either need crazy scale (5000+ head/acres) or crazy specialization (think organic). Without scale, one bad year and your out of business.
waffle_ss 8y ago
Thanks. I had asked my folks about that as well because it didn't make sense to me they could just "make it up in volume." They didn't know the secret sauce, but said they are able to negotiate better prices with the creameries due to their volume, and they use their own milk hauling trucks. It's also an open secret all their regular farmworkers are illegal aliens (i.e. cheap labor). With their volume I believe they're also able to pay better rates for other contracted work like feed harvesting, fertilization, etc. as well. But I don't fully comprehend it myself.
- ams6110 8y ago
  > all their regular farmworkers are illegal aliens How do they keep an arm's length away from that hot potato? Contracted through a temp worker agency?
  - waffle_ss 8y ago
    No, it's more of a don't-ask don't-tell policy. Workers provide fake social security numbers that the CAFO is under no obligation to thoroughly vet. The workers with fake SSNs will never be able to collect their benefits on those wages, either - they end up in the IRS's suspense file. I know this because I married the daughter of the (Mexican) guy who started the Mexican immigrant labor pipeline at that CAFO, when they first were starting to get big and transitioning to large milking parlors.
    - dbcurtis 8y ago
      > Workers provide fake social security numbers that the CAFO is under no obligation to thoroughly vet. AFAIK unless something has changed in the past few years, it is worse than that. It is illegal for employers to challenge documention that is at surface level in order. Source: a friend that is a resturant owner told me that if a dishwasher applied for a job using suspicious but superficially consistent documents with all the blanks filled in, he could be penalized for asking for further proof. He knew he had illegals working for him, but had a file drawer full of correct documentation in case the INS came calling.
      - onetimemanytime 8y ago
        >>a friend that is a resturant owner told me that if a dishwasher applied for a job using suspicious but superficially consistent documents with all the blanks filled in, he could be penalized for asking for further proof. He knew he had illegals working for him, but had a file drawer full of correct documentation in case the INS came calling. Ya think? :) Of course he knows, everyone knows. Even La Migra knows. Who is going to wash dishes for $x an hour and not complain? In US that's slave wages. So every once and a while they do a little raid here and there but otherwise close both eyes and ears. Good for them, good for USA.
      - javagram 8y ago
        FWIW, I believe business owners can opt into eVerify now and it wouldn’t be illegal to deny workers on the basis of an eVerify failure. https://www.greenindustrypros.com/business/article/12121235/landscape-companies-can-use-everify https://www.greenindustrypros.com/business/article/12121235/... Of course outside of the 19 states where eVerify is required, you’re hurting your bottom line by opting into the program. Not only are you shrinking your labor pool but you have to go through extra steps even to hire a legal worker.
    - loveyourmother 8y ago
      >the workers with fake SSNs will never be able to collect their benefits on those wages, either - they end up in the IRS's suspense file. And some unfortunate American can't finish their taxes because they end up with an extra W-2 they don't claim, because they didn't earn the money. Or when they go to claim SS benefits and the Social Security office notices that 25 people have been using their number and that they need to produce the last 40 years of their work and pay history to quickly resolve the matter. More victim less crimes.
  - jacobolus 8y ago
    A sizable proportion (half?) of the seasonal agricultural workers in America are undocumented immigrants and have been for 2 generations. It used to be that they would migrate seasonally and go back home during the off season. But since the 1980s it has gotten increasingly expensive to cross the border, which means that migrant workers must stay in the US longer to pay for the crossing, which means that during the off-season those migrants find other jobs (in factories, restaurants, as janitors, gardening, ....) which they then keep instead of going back to agricultural work the next season. Agriculture then needs to recruit a fresh batch of immigrant workers every season. Ironically, making the border harder to cross thus works as a kind of ratchet which prevents seasonal workers from moving back and forth, and ends up increasing the total number of undocumented immigrants in the country.
- analog31 8y ago
  I have a friend who farms some dairy plus corn & beans. He says that the big operations can get better prices on supplies and equipment, while getting paid more for their crop. He doesn't know how to crack that puzzle. Collusion is certainly a possibility.
- lasc4r 8y ago
  They can negotiate better prices for the feed they buy as well. Or they just own a feed supplier. That's by far the largest single operating cost they have to deal with.
salawat 8y ago
There have been big waves as big distribution chains have started vertically integrating portions of the dairy industry. https://www.dairyherd.com/article/dozens-more-farmers-lose-milk-contracts https://www.dairyherd.com/article/dozens-more-farmers-lose-m... https://www.nbcnews.com/news/amp/ncna887941 https://www.nbcnews.com/news/amp/ncna887941 It works for large scale operations, because they can use milk as a loss leader. That means they can squeeze producers for the lowest price possible, rendering margins so thin that you basically have to be a hyperoptimized producer to even be able to compete. It's an example of large businesses creating value deserts, and unfortunately, the political/economic climate hasn't been terribly up to the task of doing anything to slow or stop it. A value desert is the situation created where an actor corners and optimizes so much of an industry such that meaningful competition in that vertical becomes dead from the start. This puts the actor in an advantageous position since there is no rational reason to disrupt that vertical, which makes it easier to coast along as a major player. Google/Alphabet has been used as an example of the phenomenon with regards to the digital advertising market. Wish I could find the citation, but I think I first heard of it from an NPR spot.

kickout 8y ago

Not OP, but work in Agriculture. Margins are so thin, you either need crazy scale (5000+ head/acres) or crazy specialization (think organic). Without scale, one bad year and your out of business.

waffle_ss 8y ago

Thanks. I had asked my folks about that as well because it didn't make sense to me they could just "make it up in volume." They didn't know the secret sauce, but said they are able to negotiate better prices with the creameries due to their volume, and they use their own milk hauling trucks. It's also an open secret all their regular farmworkers are illegal aliens (i.e. cheap labor). With their volume I believe they're also able to pay better rates for other contracted work like feed harvesting, fertilization, etc. as well. But I don't fully comprehend it myself.

ams6110 8y ago
> all their regular farmworkers are illegal aliens How do they keep an arm's length away from that hot potato? Contracted through a temp worker agency?
- waffle_ss 8y ago
  No, it's more of a don't-ask don't-tell policy. Workers provide fake social security numbers that the CAFO is under no obligation to thoroughly vet. The workers with fake SSNs will never be able to collect their benefits on those wages, either - they end up in the IRS's suspense file. I know this because I married the daughter of the (Mexican) guy who started the Mexican immigrant labor pipeline at that CAFO, when they first were starting to get big and transitioning to large milking parlors.
  - dbcurtis 8y ago
    > Workers provide fake social security numbers that the CAFO is under no obligation to thoroughly vet. AFAIK unless something has changed in the past few years, it is worse than that. It is illegal for employers to challenge documention that is at surface level in order. Source: a friend that is a resturant owner told me that if a dishwasher applied for a job using suspicious but superficially consistent documents with all the blanks filled in, he could be penalized for asking for further proof. He knew he had illegals working for him, but had a file drawer full of correct documentation in case the INS came calling.
    - onetimemanytime 8y ago
      >>a friend that is a resturant owner told me that if a dishwasher applied for a job using suspicious but superficially consistent documents with all the blanks filled in, he could be penalized for asking for further proof. He knew he had illegals working for him, but had a file drawer full of correct documentation in case the INS came calling. Ya think? :) Of course he knows, everyone knows. Even La Migra knows. Who is going to wash dishes for $x an hour and not complain? In US that's slave wages. So every once and a while they do a little raid here and there but otherwise close both eyes and ears. Good for them, good for USA.
    - javagram 8y ago
      FWIW, I believe business owners can opt into eVerify now and it wouldn’t be illegal to deny workers on the basis of an eVerify failure. https://www.greenindustrypros.com/business/article/12121235/landscape-companies-can-use-everify https://www.greenindustrypros.com/business/article/12121235/... Of course outside of the 19 states where eVerify is required, you’re hurting your bottom line by opting into the program. Not only are you shrinking your labor pool but you have to go through extra steps even to hire a legal worker.
  - loveyourmother 8y ago
    >the workers with fake SSNs will never be able to collect their benefits on those wages, either - they end up in the IRS's suspense file. And some unfortunate American can't finish their taxes because they end up with an extra W-2 they don't claim, because they didn't earn the money. Or when they go to claim SS benefits and the Social Security office notices that 25 people have been using their number and that they need to produce the last 40 years of their work and pay history to quickly resolve the matter. More victim less crimes.
- jacobolus 8y ago
  A sizable proportion (half?) of the seasonal agricultural workers in America are undocumented immigrants and have been for 2 generations. It used to be that they would migrate seasonally and go back home during the off season. But since the 1980s it has gotten increasingly expensive to cross the border, which means that migrant workers must stay in the US longer to pay for the crossing, which means that during the off-season those migrants find other jobs (in factories, restaurants, as janitors, gardening, ....) which they then keep instead of going back to agricultural work the next season. Agriculture then needs to recruit a fresh batch of immigrant workers every season. Ironically, making the border harder to cross thus works as a kind of ratchet which prevents seasonal workers from moving back and forth, and ends up increasing the total number of undocumented immigrants in the country.
analog31 8y ago
I have a friend who farms some dairy plus corn & beans. He says that the big operations can get better prices on supplies and equipment, while getting paid more for their crop. He doesn't know how to crack that puzzle. Collusion is certainly a possibility.
lasc4r 8y ago
They can negotiate better prices for the feed they buy as well. Or they just own a feed supplier. That's by far the largest single operating cost they have to deal with.

salawat 8y ago

There have been big waves as big distribution chains have started vertically integrating portions of the dairy industry. https://www.dairyherd.com/article/dozens-more-farmers-lose-milk-contracts https://www.dairyherd.com/article/dozens-more-farmers-lose-m... https://www.nbcnews.com/news/amp/ncna887941 https://www.nbcnews.com/news/amp/ncna887941 It works for large scale operations, because they can use milk as a loss leader. That means they can squeeze producers for the lowest price possible, rendering margins so thin that you basically have to be a hyperoptimized producer to even be able to compete. It's an example of large businesses creating value deserts, and unfortunately, the political/economic climate hasn't been terribly up to the task of doing anything to slow or stop it. A value desert is the situation created where an actor corners and optimizes so much of an industry such that meaningful competition in that vertical becomes dead from the start. This puts the actor in an advantageous position since there is no rational reason to disrupt that vertical, which makes it easier to coast along as a major player. Google/Alphabet has been used as an example of the phenomenon with regards to the digital advertising market. Wish I could find the citation, but I think I first heard of it from an NPR spot.