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Profit, in dollars, per acre has gone down. You need more acres for the same profit. Modern ag-tech is much more efficient.
by comfypotato 4y ago
Profit, in dollars, per acre has gone down. You need more acres for the same profit. Modern ag-tech is much more efficient.
- jiggywiggy 4y agoYour last sentence doesn't make sense. You would expect yield to go up if ag tech is efficiënt. Profit going down is a sign of organisational change.
- SoftTalker 4y agoFor commodity products, profit always trends to zero.
- jefftk 4y agoBecoming more efficient tells you that yield is going up. It doesn't tell you anything about profit: that depends on the market.
- comfypotato 4y agoNo, efficient technology will reduce profits to nothing and eliminate an industry/role entirely in some cases.
- RajT88 4y agoI assume you're getting at the major corporate farms exerting a downward pressure on prices, which is thus lowering the profit per acre?
- comfypotato 4y agoThe biggest factor is technology. The same capital can produce more food. I think that’s what you’re talking about but not really sure. It’s a good thing for everyone but the farmers. The cost of food is one of the few things that has significantly gone down relative to minimum wage in the US. Supply has gone up more than demand. Profit margins have gone down.
- antisthenes 4y agoNo need to reinvent the wheel: https://en.wikipedia.org/wiki/Economies_of_scale https://en.wikipedia.org/wiki/Economies_of_scale
- temporarara 4y agoNote that the profit and profit margins are highly dependent on crop.