This “summer of Hell,” to borrow Peters’ phrase, has had me in too many hospital/doctor waiting rooms. But as I was recently counting up co-pays and deductibles in my head and wondering how to rob Peter to pay Paul this month, what did I behold in this sawbones’ lobby? Timemagazine (I know, who knew they still published and in print?) And it had the answer to my problems: “If you want to become rich: Become a farmer.” Really. Really? That quotation and the lead as a whole is straight from a Wall Street guru, Jim Rogers. And while he justifies his profit prophecy with some Berry-like chestnuts — “We don’t need more bankers. What we need are more farmers” and “the world has got a serious food problem…the only real way to solve it is to draw more people back to agriculture”—he shows his true colors as the Anti-Wendell with “the invisibile hand will do its magic” to keep food prices and farm profits up. He’s so bullish on Green Acres-for-all he claims, “farming incomes will rise dramatically in the next few decades, faster than those in most other industries — even Wall Street.” The ironies abound especially in the strange lack of subtraction on exhibit in the pop economics that suffuses the whole piece.
Front Porchers will enjoy, nevertheless, the profile of a Nebraska farming town that follows, and the interviews with its farmers provide a less rosy forecast. Together with testimony from other economists not as bullish as Rogers, the opening lead winds up getting more fairly contextualized and almost refuted by the end. Check it out at http://www.time.com/time/magazine/article/0,9171,2080767-3,00.html
Farming would be profitable–if only we ate food. But since we mainly consume food-like substances composed of starches, salt, corn syrup, salt, preservatives, and salt, the real money is in manufacturing. The over-capitalized farmer gets very little of the profit.
Rogers seemingly misses–or perhaps willfully glosses over–the fact that his prediction is premised entirely on the continued availability of cheap transportation and fertilizer (aka as oil). This omission is rather odd, seeing as he is one of the few “mouths” on Wall Street who has made mention of the fact that worldwide oil discoveries are not keeping up with demand. Perhaps he thinks “technology” and the “invisible hand of the market” will magically figure out a way to run the tractors, trucks, trains, boats, and what have you necessary for moving large quantities of agricultural products from the American Midwest to China and India. After all, as one of the farmers in the article points out: “We humans really are smart and inventive.” Yeah right.
Interesting comparison. So farmers are not doing as well as the usurers who are making obscene amounts of money pushing paper.
But :
The farmer, i.e. the industrialist owner, looks to me like he’s doing pretty well for himself. An certainly better than most american workers in industry who either work for an industrialist or at best are an independent contractor who owns a few hand tools and perhaps a truck.
Of course he’s not taken care of and pampered as a good portion of americans now are working for big corporations, big universities, big hospitals and the like , but his life looks a good deal easier than most the men I know and work with who are invariable working twice as hard for half as much money as they did before the collapse of a few years back, where before the collapse they were doing little better than making ends meet.
@love the girls,
The problem is the prosperity alluded to in the article is fleeting and temporary. You may have noticed the farmers talked about the mind numbing amount of debt they had taken on in order to facilitate this “big time farming.” Therein lies the problem, farmers take on all this debt so that they might “compete in the wonderful free market;” unfortunately, this debt is often so staggering that the first minor issue causes the whole operation to implode. It has happened time and time again in America over the past hundred years. Michael Pollan does a good job of describing the cycle in his book The Omnivore’s Dilemma.
To piggy-back on Robert’s comment, the farmers I know all assume that “farmers live poor and die rich.” Most farms are capital intensive enterprises, where the “riches” are hidden in the land, the tractor, the bet on crop prices, and so on.
“Most farms are capital intensive enterprises, where the “riches” are hidden in the land, the tractor, the bet on crop prices, and so on.”
So? Which makes them no different than any other industrialist.
I don’t begrudge them their prosperity, and to the contrary am glad they’re out there because, just like other industrialists, their the movers who create wealth for all the workers below them. But please don’t pretend, as they do, that they’re just another man on the street.
No one in business is guaranteed patrons will walk through their door to purchase their services or goods, nor are they guaranteed that their overhead won’t increase or have some failure. That’s the risk that’s taken, and is likewise rewarded.
When I drive through the farmland what I see are nicer tractors, (with the same mechanics as front loaders), than those owned by any contractors I know. And of those who do own them consider themselves well off to own them.
I also see, lots of land, nice houses, horses and clear blue sky. A pretty nice living and place to live. And far beyond the means of virtually all typical american workers.
Maybe Yankee Farmers are mugwump revanchists but I don’t see many new rigs on the farms hereabouts. I see an awful lot of older iron and a lot of hard work. However, one local dairy farm of champeen stock is delivering remarkable product to the local market and using state of the art tools but the fellers who own the place also own the Manolo Blahnik Shoe Company. Finely tuned calves funding bovinical calf, I like it.
Jim Rogers pegged the Chinese Rise long before anyone else did and so one hopes there is at least some grain of truth in what he says. It would entail a gargantuan change in our idea of food, our Soviet Era Agricultural Programs and a lot more local market development though.
D.W. Sabin writes : “Maybe Yankee Farmers are mugwump revanchists but I don’t see many new rigs on the farms hereabouts.”
I don’t know about new, but there certainly are plenty of good looking one’s in flyover country between here, Denver, and Omaha. What’s also noticeable are all the new corrugated metal silos, like in the photograph, that have replaced the pretty blue harverstores over the last 20 some odd years.
Mr. Sabin,
It’s my understanding that dairy farming is a bit of an outlier at the moment. Apparently a number of factors have combined to put downward pressure on milk prices at a time when feed prices are at all time highs. Perhaps this explains the lack of new equipment in your neck of the woods. In the area where I grew up–West Virginia–the “poultry farmers” all seem to be in some sort of contest to see who can take on the most debt and buy the shiniest crap.
As for Rogers, I don’t know that he’s as prescient as some think, but that’s an argument for another day. When it comes to farming, I don’t think he envisions a future wherein Jefferson’s vision of a nation of small farmers carries the day. Rather, and I base this on what he has written and said, he seems firmly wedded to the “get big or get out mindset.” After all, farms and farm families are nothing more than a cog in the wheel that is the global economy.
@ love the girls there are lots of shinny silos (I call them debt tubes) because they have taken on an extreme amount of debt. The average broiler producer has three houses each of which cost up to $ 300,000 to build. This certainly doesn’t help considering that their median income is under 25k a year no matter how experienced. With your comment about no one being assured that someone will buy their product, farmers are not even assured that they will have a product. There could be drought disease ect. On to your next comment most people who farm outside of Denver or Omaha are “hobby farmers” that is they are rich (usually retired) people who buy a farm to live the “country life”. And another thing you said that they had nice horses? I’ve always had a saying: unless their Amish or cowboys, and they have horses, they really don’t farm.
I’m odd, granted, but the article seems to assume the purpose of farming, and I suppose work in general, is to earn enough money to put an infinity pool in the backyard.
So this is about greed, isn’t it? Have to admit to feeling a bit adrift these days, but there is such a thing as greed, right? Use to be.
Ryan,
While most Catholic blogs like this loaded down with academic types, or the corporate blog version there of, where every care of life is taken care of for them by the local u. along with guaranteed income from year to year are a good place to find sympathy for agricultural industrialist with the wherewithal to incur strings of absurdly large debts, nevertheless not every reader of those same blogs is so well taken care of that they bemoan the fate of men they would gladly in a heat beat trade places with.
Anyone with the wherewithal to incur debts the way american farmers are said to do will have to look elsewhere for sympathy of their plight.
Rogers may be right that agricultural land has a lot of value potential, but he fails to account for the differences in size and productivity of the farming spectrum, and the political power imbalance that portends.
I predict that anyone who takes his advice on a small individualized scale will find themselves whipsawed into selling out to larger interests at a heavy loss. Speculation spawns hand-in-hand with politco-economic regulatory confiscation. If there is money to be made, government will do the bidding of big financial interests in taking those resources away from individuals and delivering them into the control of industrial-corporatist hands. The easiest means is to create bubbles, let them collapse, and the vultures will swoop in and pick up the assets at fire-sale prices. Meanwhile, those who invested their time, sweat and money will be wiped out.
The value of an illiquid asset like land hinges on the regulatory environment, and the Feds can change that in a blink of an eye. Many large farming operations are already held to a different standard of health safety and environmental performance, but they write-off those business costs (i.e., paid for by taxpayers). Smaller family farms don’t have the capital or cashflow to do the same, and a simple change to make them all abide by the same regs (which will be portrayed as “fair”) will wipe them out. Note the proliferation of news stories about mandatory NAIS (registering your small herds so they can be tracked, ostensibly for the purposes of food safety), fines on small animal raisers, and other regulatory crackdowns on small farmers, gardeners, and hobbyists.
Add to this the natural ambivalence, if not hostility held by most rural citizens to governmental interference, and you have a population ripe for political rape. The Feds know that rural America holds the most stubborn and independent citizens; those least likely to go along with collectivist schemes. Just as the Soviets needed to take control of the Ukraine in the 1920’s and 1930’s, the U.S. Federal gov’t plans to do the same…just without the mass starvation. They want to control the source of America’s food … if they have that, they have the urban areas by the balls. The Feds don’t like the locally grown organic movements, the farmer’s markets, because they represent Federal weakness in controlling food. The Feds know that the average grocery store is 3 days away from empty shelves, the population is then 5 days away from hunger, and they will have ultimate control when food distribution is in Federal hands.
The Federal gov’t has already started organizing to take control of rural America inorder to “improve” it and make it more “productive”. Executive Order 13575 creates Rural Councils with the authorization to control rural economics. And it includes elements of the Defence Dept and Homeland Security.
http://www.youtube.com/watch?v=vz-kZ7NQevk
It is being done slowly and cautiously so as not to draw too much attention. When it is noticed, the excuses about food safety or economic “assistance” are trotted out. Every case of food-borne illness is played up inthe press to help gain public support (even when it is usually caused by industrial food processors). The tendrils are wrapping around America’s food choices and sources, getting deeper and tighter all the time.
E.g.,
http://www.dinocrat.com/archives/2011/08/14/moo/
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farming is the way to go,
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