patriot Intel list on Nostr: Part 3 [Image link]Selling wheat or wheat products such as flour in sacks became a ...
Part 3
[Image link]Selling wheat or wheat products such as flour in sacks became a part of American culture for decades. One of the elderly women who I interviewed in my study of the Great Depression described her early years where she, her mother, and sisters would make flour sack dresses as the flour sack companies often competed with stylish patterns that these sacks could be turned into dresses once they had served their purpose of transporting the grain or flour to your home or farm. Nothing on a productive farm is wasted and years ago few people in the city would actively waste anything as money was much more difficult to acquire years ago.
Many farms are in debt. We are not. A longer explanation of this is available in my November article part 3. Debt is so important of a topic that this needs to be explained as debt destroys dreams. Debt is the thing that often will drive you off your land, out of your home, and take you away for many hours from your family on a daily basis to work a job in the city where you have little control until someone figures a way to remove the cost of your labor from their profit and loss statement. Even if you are reading this from inside of a city or suburb working a job, this discussion will have great relevance for you. If you are not in debt, congratulations. If you are trying to get out of debt, hopefully the paragraphs I have written on debt will encourage you.
Acreage cost is to the point of being simply uneconomic for someone to wake up and say let’s move to a farm and the farm will pay for itself consistently with your labor and you can have a great standard of living from annual crop sales. The last time that was true in the Midwest was possibly the late 1940s to 1950s and that “Golden Age” soured quickly. Whenever I look at various farm budgets, one thing needs to be considered: it would be difficult to justify buying farmland at these prices for the purpose of possibly getting a return if you are buying it with a mortgage. Generally, land is illiquid, can be volatile in price, and difficult to extract profit from on a consistent basis.
Land is no longer free or available at a reduced cost. The various land for labor schemes such as the Homestead Act of 1862 or land for a few dollars frameworks such as the Preemption Act of 1841 to settle the country are no longer available. Good tillable ground costs thousands of dollars an acre to well over ten thousand dollars an acre. I am sure that an Iowa corn farmer is reading this is saying maybe “Single Farmer” has not heard that it can be tens of thousands of dollars an acre. Yes, I saw some of those sale sheets with parcels of tillable ground that have sold recently.
THE ECONOMICS OF FARMING

I often hear statistics that farmers receive 15 percent of a food dollar. That statistic really needs some examination in comparing it to previous generations. Back in 2016, we sold wheat in the $3.80 range and we were fortunate in that the official statistic for wheat for our area is $3.20 a bushel. I will be generous and use our $3.80 a bushel number: At that number, a pound of wheat is a little over 6 cents. Wheat is commonly used in bread, so an example that I often think about is how much of a loaf does the farmer get and that often demonstrates the difficulty in profitability.
For these purposes, I will say one pound or 1/60 of a bushel is the amount of how much wheat is used for the loaf of bread (although many bakeries use less than a pound of wheat flour per loaf, so they could bake more than 60 loaves to a bushel). In 1950, a loaf of bread was 12 cents and the family farmer would sell his wheat for 3.4 cents a pound receiving about 28 percent using that equation. Using the 2023 full year numbers as this is being written in late December 2024 before the complete numbers are available which likely are higher, the average price for a loaf of wheat bread was 2.54 dollars and we a family farm sold our wheat for under 9.5 cents a pound earlier this year receiving under 4 percent using that equation. The price we sold wheat actually declined in 2024, versus what we sold it for in 2023. There are a lot of people paying more than 2 dollars and 54 cents a loaf for bread further reducing a farmer’s percentage.
All of those are gross numbers before any expenses are paid. There are so many expenses which usually include routine and necessary expenses such as seeds, fertilizer, farm machinery, fuel, taxes, and transportation. That takes the 9 and a half cents a pound and really reduces it significantly. If you have not sold a large agricultural commodity by the semi-truck load, you probably do not know that there are subtractions even when selling it. After the net weight is calculated (subtracting off the truck), there is also a reduction if the moisture content is above certain established moisture thresholds. If it is higher, then subtractions will be made because they do not want to pay for wet grain which has to be dried out and this costs money. There are also subtractions for foreign material that is not grain as they equally do not want to pay for stones or dirt.
Transporting the crop to be sold is a gigantic undertaking. For teh sake of efficiency (remember anything that is done on this scale is to be done as quickly as possible or you are not maximizing profit potential), a semi-truck is often used for transport. Some farmers will use grain haulers and this can cost more than a hundred dollars an hour depending on the distances involved. Most people reading this are not seeking to enter into the commercial farming business. There are several points that are very important to understand, since someone who wants to be prepared should consider the necessity of food storage at the family level and the complicated process being described to get food from the field to the first stop along a very long path to your table.
At these low levels for a bushel before subtracting everything required to raise that crop from seeds to cost of transportation to the grain elevator, there could easily be a loss, so not even a penny is made for all of that work. The farmer essentially not only worked for free, but he also has to pay many bills which could drive him further into the red and if this continues could drive him out of business. It was not always this way. There was a better time for farmers, a golden age of farming in the post-Second World War world.
The late 1940s was a time when America was expanding. Many returning veterans of the Second World War returned home, married, and began the “Baby Boom” which was an unprecedented expansion of both our population and the economy. The United States exited the war relatively unscathed with large demands of food from overseas to feed a population desperate for food after six years of world war. Wheat prices reflect the growing demand with 1.91 wheat in 1946 to 2.25 wheat in 1947 and even by 1950 it was still at 2.02 a bushel and through 1956 never went below 2 dollars a bushel in our area. The 1950 price is equivalent to 26.44 dollars a bushel using the latest data of November 2024 from the consumer price index. Using the equivalency in silver, it would be much higher. Those are gigantic numbers and gave the farmer enormous purchasing power. If you look at the historic records for family farms in this era in the Midwest, you will often see family farms producing an equivalent of three salaries compared to city jobs in this era. However, the post-war boom led to overproduction and that in turn led to eventual price declines.
Agriculture does not exist in a vacuum especially in an age of the ability of politicians to tax one group and give resources to another group. Farmers often become a group of people who is pandered to by various politicians promising to restore past glories or for stability in pricing as this allows long-term planning especially based on debt repayment. The concept of “parity” programs which all current subsidy programs trace their ancestral roots are one such example. The period of 1909 to 1914 has been termed the “Golden Age of Agriculture” and at averaging 87 cents a bushel wheat for this period was very good compared to years during the period starting with the Panic of 1893 lasting until 1897 with wheat prices in the first three years of the Panic averaging 43 cents a bushel. Back then unlike the 1950s when gold was unable to be used in commercial transactions inside of the United States, 87 cents for a bushel of wheat was very impressive: if you could sell 23 of these bushels you could put in your pocket a 20 dollar gold piece containing almost an ounce of gold (.9675 ounces of gold to be exact).
Today that equivalency would be $113 a bushel wheat at current gold prices as this is being written in December 2024. Using the more common consumer price index (which many observers say that it undervalues inflation by excluding and often redefining categories), the price of 87 cents a bushel in 1914 to today would be 27.45 dollars a bushel. At that price, farmers would be able to make a consistent return comparable to the level of a 1950 farmer discussed earlier. The wheat necessary to make a loaf of bread would be a little under 46 cents which is not completely absurd considering some restaurants in our largest cities are charging three dollars or more for a couple of slices of toast.
The same can be said about the “profit” that any number of people are making between a farm to your table. The more people who handle any commodity, the more it costs because each person needs to get paid. The grocery store has small margins with massive bills to pay include lots of “shrinkage” and restaurants have their own challenges which also can reduce profitability. Knowing people in both industries has allowed me a view to be able to say that no one is getting rich in feeding the average person.
The logic behind a “parity” programs is that the farmer would receive a payment if his income fell below a certain level tied to a certain time period based on what one party says is a “fair” amount. The issue is simple algebra meaning that if an “operation” is done to one side it also has to be done to the other for things to be equal: for a farmer to receive a payment from the government, someone needs to give it and eventually paying the bill every American or more specifically, the taxpayers. Fairness is not something that can be legislated or regulated. A free market determines price with supply and demand working out toward an equilibrium continually adjusting depending on the trajectory free people choose for themselves. That is fair, but “fairness” to those who often advocate it means someone has to take from another person by force if necessary to create the playing field they determine is economically just.
Ignoring the free market and trying to institute quotas often results in negative results such as lower quality, lower production, destruction, or production that is not wanted. Examples of this include when the U.S. government during the Great Depression tried to increase the price for certain commodities so it paid for crops or animals to be destroyed in order to temporarily raise the price. This does not work because the producers were paid for the destruction and eventually everyone paid higher prices than the market price.
This little history lesson affects each American until this day because during this period of economic upheaval, the country shifted away from the free market and embarked upon quasi-governmental control of varying degrees of every facet of your life. With the election of Franklin Roosevelt, free market economics was replaced by economic theories which required regulation of free markets and coercive controls to be introduced. As you could imagine, there would be a conflict between men who wanted to carry out their role as men of being providers and government which wanted to control their ability to feed their families through central planning.
The story of Roscoe Filburn, an Ohio small farmer who was just trying to grow wheat to feed his family and cattle during the Great Depression year of 1940 is illustrative of the lengths a central planner must go to smash the initiative of small independent people. Roscoe successfully grew wheat mainly for his own use feeding his family and animals with some extra for his local community. He grew beyond the numbers he was allowed to grow by the government (back then in an effort to increase price, the government gave farmers a certain allotment and Roscoe was not allowed to plant wheat on half of his acres.) The wheat never left the state. It was not sold interstate (between states), but intrastate — in fact, in his very local area. He was fined and this eventually found its way to the Supreme Court where in Wickard v. Filburn the court ruled that the government could regulate commerce that never left the state because if he did not grow the wheat, then he could have purchased it thus affecting interstate commerce. That was rather shaky logic, but it became the foundation of the modern interpretation of the interstate commerce clause which allows the government to potentially regulate anything it wants in your state even if you never leave it.
Everyone in our nation actually lost some of their liberty with that decision. It led to a growth in the size of government which never acts as efficiently as free people making decisions in their own area. The first large scale programs to control and subsidize agriculture began in this era and they continue to this day. Some of the quotas have been suspended for years such as wheat quotas that Roscoe was fined for violating. All of these programs had a goal of “saving the family farm” by trying to raise prices and consequently incomes for family farmers. None of these programs have been successful when looking at overall numbers.
In 1960, John F. Kennedy was campaigning across the country and he gave a critical speech on the future of agriculture at the National Plowing Contest. At the time, there was a debate on how to save the family farm through a parity program to guarantee an income at which candidate and later President Kennedy gave a pledge:
“First, we pledge ourselves to securing full parity of income for the American farmer. By ‘parity of income’ I do not mean a vague target or a high-sounding goal. I mean a clear, easily defined concept which can be mathematically ascertained and computed. Parity of income is that income which gives average producers a return on their invested capital, labor, and management equal to that which similar, or comparable, resources earn in nonfarm employment…Here is a concept which strikes to the heart of the farmer’s problem. It does not concern itself directly or solely with prices – with what the farmer receives – but with his net income, his return, the only figure which is meaningful in determining his standard of living, particularly in this age of the cost-price squeeze. For the farmer, is the only man in our economy who has to buy everything he buys at retail – sell everything he sells at wholesale – and pay the freight both ways.”
None of this was successful and the almost 4 million farms in 1960 became the under 3 million farms by 1970. Many farms during this period of high inflation and lowered prices were forced to take on debt especially after the inflation starting in the mid-1960s. As you may already know, silver was removed from dimes and quarters in 1965, being reduced and then removed from half dollars starting in 1971. If you purchase farm ground and go back far enough in examining the history of the property through the deed records, you will sometimes see mortgages in this time period of people trying to borrow their way out of rising prices and declining incomes.
By the 1970s, farm policy took an interesting turn when Earl Butz, the Secretary of Agriculture, told farmers to plant from “fencerow to fencerow” (rejecting the previous policy of trying to increase price through decreasing amounts of planted acreage of commodities) and told farmers “to get big or get out.” All of this encouraged monoculture emphasizing a single crop to maximize time and resources which has created soil depletion and also subjected farmers to dependence on the fortunes of a single crop. Family farms in the 1970s had to contend with high prices of the inputs required to produce a crop and getting bigger was very difficult as land values continued to climb in the 1970s along with every other tangible item being squeezed higher in inflationary pressure. The number of farms declined by almost another 500,000 during the 1970s. However, the worst crisis was actually just on the horizon.
The decade of the 1970s was a period of high inflation where people were willing to pay more for tangible items as these were seen as a hedge against further inflation. People rushed into buying land, houses, cars, and almost anything of value as waiting often meant that the price would be higher. I have interviewed people from this period who were trying to purchase homes and they commented that if they delayed prices were increasing much faster than they could save, so many would try to use credit in order to borrow to stay ahead.
All of this inflation was largely a result of the decision of the United States government to move the dollar away from being pegged to gold which increased the price of gold from 35 dollars an ounce to 850 dollars an ounce by 1980. Interest rates skyrocketed reaching over 18 percent by 1981. Farmers were not immune to this decade of price increases and many decided to follow the advice of Earl Butz both moving toward monoculture of commodities instead of diversification as was more common on earlier family farms and also to purchase more land to increase the efficient use of the equipment which was rising in price.
All economic bubbles eventually pop and this one resulted in an economic destruction in the farming sector which could be argued was worse than the Great Depression as measured by bankruptcy filings. The crisis actually peaked in 1985 and the price for 1986 wheat in our area was actually even lower in 1986 than 1985 bottoming out to 2.25 a bushel, a level first seen in 1947.
Farm bill after farm bill has tried to save the idea of the family farm. Our nation has been living under farm bills since the 1930s with each multi-year act (bills that are signed into law are called acts) trying to “help” farmers starting with the “Agricultural Adjustment Act” of 1933. I am writing this in the time of an expired “farm bill” where there is an interesting debate going on about how to “help” farmers. Farms growing specific commodities that are broadly consumed in the country such as wheat, soybeans, and corn are usually eligible for various financial assistance depending on the provisions in the act.
The Department of Agriculture (USDA) is the best source of information and they routinely send communication periodically to farmers both electronically and through the mail informing farm families about these various programs. Deciding on the merits of each program in the current farm “bill” and how they apply to your operation is outside of the scope of this article.
The Biblical foundation of individual economic wealth creation is to exchange your time and skills in the form of labor for money and this becomes your capital. You can then take that capital that you earned and further invest it by saving it for a “rainy day,” further invest in yourself building up your business or skills to give yourself further competitive advantages in the marketplace or investing in the business of another individual with the expectation of further profit. All of this is hard work often requiring a lot of “sweat equity.” The opposite of this is to make a loan and get the capital today instead of taking the time and learning slowly using compounded knowledge instead of interest gradually growing your business. Like all easy roads, the road of borrowing has a unique toll of compounding interest that must be paid or you could end up losing more including any collateral.
Loans and other direct subsidies are keeping afloat many farmers today. Going from one debt payment to the next loan is unfortunately the case for many farmers in our country. “Beginning farmers” are offered loans and farmers are offered operating loans. There is no shortage of people offering loans, but it is often very difficult to pay these back as I have mentioned many times. Without the farmer, there is no food. Governments have many times tried to figure out ways to encourage agriculture making it a cabinet-level office in 1862, but instead agriculture has grown from self-supporting to extremely dependent on government for funding especially since the 1930s.
During the major famine prior to the Bubonic plague that was discussed in Part 1, prices increased by more than 300 percent in an area that was heavily affected in France. Back in the Middle Ages, it ranged from very difficult to impossible to afford food at the peak of a famine except for the wealthiest, so people would starve. Tripling of food prices now to Americans in 2025 would be difficult, but it would be closer to historical norms in the early 1900s where Americans spent over 40 percent of their income on food. This was a different time where many Americans had gardens, hunted, and fished for food and almost all of this food was consumed at home (restaurants were not as plentiful). In 2019, Americans were spending a little over 10 percent of their income on food and this has increased with the recent inflation over the last few years to over 12 percent.
We are not benefiting much and usually not at all from higher prices as the increased prices you pay usually means farmers are paying higher prices for the seeds, machinery, fuel, fertilizer, and everything it takes to produce a crop. Back in 2022, we sold wheat for over 8 dollars a bushel, but instead of us singing “Happy Days are Here Again” (a song people sang during the Great Depression to lift their spirits), the price was more of a mirage than some new level because everything also went up in price. Futures actually spiked to over 13 dollars a bushel for wheat at one point.
Nitrogen fertilizer based on local prices in 2022 was almost $1,000 dollars a ton compared to in the $300 a ton range back in 2016. Remember the wheat price in 2016 was 3.80 a bushel (using the fertilizer comparison we would need to sell a bushel at over 11 dollars for the same equivalency). Whenever you see higher food prices, farmers are unlikely to be making more “real” money and often are losing money on a “real” basis as the higher prices often do not adjust for the higher input costs. Prices usually go up either because of a shortage due to a crop failure that the crops do not produce at normal levels or sometimes there is an international incident such as what prompted the higher wheat price as there was uncertainty in how much wheat would be produced in another area of the world which is also considered a breadbasket like farms in the Heartland. Prices can rise and fall very fast in an international crisis. I noticed in 2023 the price of wheat dropped from 7 dollars to 5 dollars a bushel in 3 months as more inventory became available.
The good news is that food is more available at a lower price with fewer people having any involvement in agriculture than for the majority of history. Currently, Americans are able to purchase wheat at 10 percent of the price of someone in the Middle Ages and chicken at just 4 percent of the price meaning that chicken is 25 times more available to you. You may be asking yourself: Why is Single Farmer talking about chicken? Chickens both broilers for meat production and layers for egg production consume wheat or other cereal crops as a large percentage of their diet, so large increases in grain prices show up in chicken, egg, and milk prices along with any other animal that consumes grain for its caloric needs.
The number of hours required to complete an agricultural task has been in decline for over 100 years. This is one of the key concepts that you need to understand in order to have the best chance of surviving the future as these efficiency increases also are across many industries.
Time is not spread out evenly on a farm which is a problem from a labor perspective. There are many times in the life cycle of a grain farm where there is nothing to do, but wait especially with dryland (non-irrigated) farming meaning that you allow natural precipitation cycles instead of introducing irrigation through pivots. There are some times during the initial stages of planting and the last stages when harvesting that there is too much to do in a given day given the needs of human operators.
I am simplifying this process as there is preparation of the ground necessary to plant, usually a couple of applications of fertilizer in the late Fall and early Spring for a “top dress” application or having to treat the crops for specific conditions. (Including some who will use a crop duster if conditions necessitate that step.) Most of the time it is allowing natural processes to unfold and that usually occurs on an observable timetable. That is both the problem and the solution and this concept impacts every reader in this country.
Modern farming is an extremely capital-intensive business. Perhaps you were or know someone who was an apprentice and progressed to being a journeyman in their field. This stage often requires ownership of tools as a journeyman has developed skills and ownership of materials necessary to carry out his craft. I have heard complaints about people wondering why someone would need to spend over ten thousand dollars on tools to work at a job. Tools cost money, many often “disappear” having a value that allows them to be turned into ready cash by men whose morals need realignment, and all of this shrinkage can cost an employer their bottom line, so men who own their own tools are typically paid more.
A workman who owns his own tools without any debt often has demonstrated a long series of steps toward responsibility. This is much the same as a man in Virginia in 1620 who was industrious enough to be able to afford through his own strength land and resources was seen as worthy of the next step of marriage. Now, a modern farmer will often have a tool and equipment budget in the millions of dollars. Obviously, you don’t wake up as a young man and say “that farming business sounds like a good thing, so I am going to get into it.” You are born into it or you buy into it often successful at something else as you seek diversification. Gone are the days when a strong back and some initiative would allow you entrance. That era has long been closed.
Many farmers actually are a combination of owner of some land and a tenant/contractor also working their neighbor’s land either for a set cash amount or a percentage of the crop. Because of the high prices of cropland, they often own only a percentage of land that they actually work. The high cost of machinery and the overall efficiency of machinery are the two reasons why so few people (as a percentage of the population) need to be in farming.
The greatest problem is the capital-intensive nature and I will briefly highlight a couple of areas. Earlier you read about the humble funnel and the tractor. There is a lot of single-use machinery on a farm. Consider the process of getting the seed into the ground. From ancient times until the industrial age, people would broadcast wheat and this often made a nice meal for birds and a fairly low yields at harvest which because of the uneven nature of the application. This changed with the introduction of tractors and the implements of introducing seed into the ground such as seed drills and planters.
Speaking in general of row crops: Planters plant the seed at a precise depth having an acceptable number of plants per square foot neither with too many or too few as either scenario will not result in optimal conditions for plant growth and harvest using a combine. This obviously is labor intensive for an individual without machinery. Now, a large modern planter can precisely plant upwards of 100 acres an hour! Planters have not followed Moore’s Law of semi-conductors, but great strides have been made and you can see the overall decline in labor needed on a farm through the ability of being able to plant six rows in the 1950s to 48 rows, today. If a person attempted to achieve this same level by hand, it would likely be a fraction of an acre a day for planting with enough exercise and calories burned that they would not need to go the gym.
There is a cost associated with this massive efficiency. A modern planter with that level of capability costs over $500,000 plus the cost of a tractor which can easily be another $500,000 to a million dollars, so a modern farmer can be spending over a million dollars to be able to complete one task. Some of the tasks will use that tractor again during the agricultural year, but there are so many other single-use pieces of machinery. All machinery requires regular “feeding” of fuel and maintenance. Most passenger vehicles have under a 20 gallon tank and that can be expensive: Filling up a large tractor or combine can easily cost hundreds of dollars to over a thousand dollars.
Consider how plowing was done in the early 19th century where one man and one horse could plow an acre per day and some people added additional horsepower, so maybe your could increase it to 10 acres a day with more horses. Of course, the additional horses cost money in feed and time required for care when they are not doing agricultural tasks. Unlike tractors, there is a potential for natural reproduction of horses. (Unlike mules which were also often used on pre-industrial farms.) The cost of mechanical tractors is enormous, but the efficiency is amazing: Plowing has also undergone a remarkable increase in efficiency at current record levels of hundreds of acres in daily work capacity of mechanical horsepower versus animal-based agriculture in the 1800s.
I often think about the future of agriculture. All of us live in a very interesting time. Fewer people have ever been involved in the growing of food as a percentage of the population, but many of the farmers are really struggling. The debt that I spoke of so many times is still often a large factor in farming. We have no debt, but debt is serious as it effects many of our friends and people in our country who are in farming. We are customers of many agriculture-related businesses, so often we find ourselves being recipients of various “magazines” these businesses send to us through the mail. I put all of our agricultural-related information into a box throughout the year for tax purposes and some of these magazines end up being put into another box (with the intention if it is an article that I should read or refer back to someday). I decided to pull some of these magazines for a few years to get a general idea as to what was being discussed. Some of the articles are talking about increases in efficiency, some new product out there, or someone’s thoughts on the commodity market, but many times it is discussing the financial aspects such as “growing liquidity,” “reducing costs,” or “increasing revenue.”
I am writing this during the latest “Farm Bill” discussion in late December, but a summation of the reason for the billions of dollars of extra subsidies is useful to show how we ended up here having to subsidize food production. Many commodity production farms have entered into their second plus year of financial downturn, so they need to get loans to help be able to cover family and farm costs into the new year and until they receive their first checks for the 2025 crop which could be mid year for many commodity farmers. The current “solution” is for the government to give farmers money so they can show the banks that their financial condition “improved,” and they can then pass the necessary lending hurdle to get approved for a bank loan to continue farming.
Many of these magazine articles talk about loan to value, debt to asset ratios, or the impact of interest rates. The ideal state is to have no loans. However, many farms have large loans on them: the small farms average over 200,000 dollars worth of debt with the largest farmers averaging almost ten times that worth of debt. Net farm incomes this year are expected to decline. If a bank would evaluate most farms as a business, they would laugh most of the people applying out of the building, but a farm is unique in that people need to eat. A lot of people will say that we can just import food from elsewhere like we do a lot of manufactured goods that were previously made in our country until the late 20th Century. We export about 20 percent of our food to the world. Under one percent of our GDP is output of food from farms, but the vast majority of calories you eat are grown somewhere inside of the United States either directly eating it or being processed through livestock feed.
The problem is that farming has for years been a non-self-starting endeavor. Probably the last time was during the Homestead years, but even then you needed to start with some type of “grubstake” to begin. And it is at the point of being non-self supporting. (The cost of land and everything it takes is many years beyond what you receive from a crop if you have an interest expense from debt on top of your other costs). A healthy percentage of farm “profit” is often government subsidies (in some recent years across all farms it was 40 percent of the income was from government subsidy checks). There are some farms that do not take any government payments out of principle, not wanting to have the government involved in their business. Many farms rely on them as a percentage of their “profit” to justify the massive costs involved and sometimes the subsidies are the difference between a “profit” and a large loss.
There are no easy solutions: all require work and pain. Some people say to eliminate all of the subsidies immediately, but then a lot of farmers would leave farming and we would have less food. Most farmers are independent family farmers like us meaning that we can decide what food crops to grow on our land. These decisions are made on a family level. If a crop is no longer self-supporting, it is no longer grown. Because of crop prices, we have decided to stop growing several crops that we have historically grown because we no longer believe it is worth the risk, so we reduced our financial exposure.
We do not owe anyone any money, so we do not have a bank to report to who could influence our decision-making process. In this scenario which has little likelihood because of the catastrophic downstream effects that would occur if these subsidies were withdrawn, the farmers who remain who were not taking the subsidies would experience more profit, but your grocery bill will probably be much higher. Right now, every American is paying about 150 dollars per person per year if all of the subsidies were divided out equally at even at a high amount of 50 billion a year in which many years it is lower.
Most people would think that the “Farm Bill” is about farming, but the majority of funding for the “Farm Bill” is normally about 80 percent of funding for the “food stamp” program now called Supplemental Nutrition Assistance Program (SNAP). My family and I have never begrudged helping out needy people and are always trying to help people. However, helping often becomes hurting when government is involved as individuals are not counseled by people knowledgeable about their situation applying healthy doses of “tough love” when necessary, but are categorically eligible. The one problem with all subsidies whether it is to farmers or to needy people is there is never a way in these programs to encourage people or industries to become self-supporting. The current “food stamp” program started out at costing 75 million dollars in 1965 and in 2023 it costed almost 113 billion growing from about a half a million people in 1965 to over 40 million people today. The problem is that they have resulted in more people on them (not fewer), we as a nation have to borrow for these programs, and our nation is over 36 trillion dollars in debt.
President Reagan joked that “nothing lasts longer than a temporary government program.” There is so much truth in that because each program usually starts out as a “pilot” program and then expands eventually to becoming a sacred cow which could never be reduced, only expanded. Feral hogs annually cause billions of dollars of damage to crops across many states. In 2014, funding started for a “National Feral Swine Damage Management Program” and the 2018 “Farm Bill” contained a provision for a “pilot” program on feral hogs. Some new farm bill advocates want to make this program permanent. Over the years, first settlers and then farmers hunted wild animals because their continued presence would reduce crop yields and create problems with farm animals. Advocates of the feral hog funding want to increase the amount to study and “control” it by doubling the appropriation of the 2018 levels.
“Rule 308” still works well to solve issues with feral animals and it is often cheaper than spending hundreds of millions of dollars “studying” problems. We do not have any large dangerous wild animals in our area in large part due to the topography in our area and as these have been hunted and trapped by previous generations. Trapping can be more effective especially in eliminating large numbers, but less glamorous to people who enjoy “the hunt.” Often you will see government create a problem and “pay” for the solution while still allowing the problem. Consider the case of the re-introduction of the wolf to western areas of the United States.
If you tried to explain this to someone from the 1800s, you would not be able to explain the story of the modern wolf to pioneers who would reduce predator populations whenever they had an opportunity as they knew the damage a pack of wolves can do. Now, wolves are “federally” protected in many states (this is a brief comment not covering the whole story of the “re-introduction” of the wolf) with their “meals” being subsidized through the taxpayers in many instances through federal indemnity payments when they are “federally protected predators.”
Farmers do all kinds of interesting things with their grain in an effort trying to get more for it. Some farmers try to guess what the future price will be by getting involved in the “futures” market. No one knows the future. We do not get ourselves involved with the futures market. Some try to hold grain expecting the price to increase (which may or may not happen for years). You can store grain in bins and then truck it to the elevator if the price is higher or you need to pay a bill. Some people store it at the elevator and this also costs money. My dad believes in selling the grain. Many times the price is higher initially and then as more supply comes in it lowers unless there is some type of international event which could cause an increase (supply and demand at play here and everywhere).
Our farm philosophy has been to regard the money that we received from our farm as “seed capital” for other ventures, not constantly trying to see if we can extract every last possible cent out of this investment often risking more money. There is a lot of wisdom in the old saying of “don’t pick up pennies in the path of a steamroller.” Over the years, we have diversified into other businesses outside of agriculture and are not as subject to price shocks as many other farmers.
Never before has been less labor needed to farm, but the costs to enter into commodity farming are extremely high. I see the total amount of labor decreasing further with the growth of fully autonomous farm equipment. The days of a farmer borrowing money going from crop to crop could be numbered if this equipment is able to achieve true autonomy in the upcoming decades. Most labor in the form of muscle applying itself to a task has been largely replaced by mechanization. A “combine operator” in upcoming years for the majority of tasks may become as obsolete as a lamplighter. Each innovation results in job loss where people move to something new. From scholars with quill pens diligently copying the Bible before the introduction of the printing press started making the Bible more accessible in the 1450s to linotype operators replaced by phototypesetting, and eventually to computerized editing, there is always an effort toward efficiency for most commercial production. As individuals living in the country and preppers, we are aware about the complexity of modern life and know how to do things in both ancient and modern ways.
The most successful people that I know in agriculture are always “future-oriented” with a deep appreciation of the past. Over the years, successful people who live debt-free have seen the prices of commodities rise and fall and are not much disturbed by them as they are less subject to price fluctuation. The years of larger checks in farming allowed them the ability to develop a surplus which they were able to invest. Many individuals expand outside of farming in order to diversify while other successful people sometimes enter into farming at optimal times in order to diversify. Productive land has maintained a value to the individuals living on it even during periods of both deflation such as during the Great Depression and during periods of high inflation — seen quite recently and in the 1970s.
To survive and thrive in the 21st Century in farming one must be nimble, avoid debt, have a variety of income sources from businesses that are unrelated to agriculture, have friends, and most importantly to have faith in God that He put you here for a purpose. We enjoy living on our farm and consider each day that we have here to be a blessing. I do hope that someone reading this will know a single young woman who is also looking for a husband and can tell her or her family about me. It is my sincere hope that you have enjoyed this little journey into understanding more about grain farming in the 21st century.
A Concluding Note From JWR: This young man is prayerfully seeking a wife. He is offering a gift of $18,000 to whoever introduces him to his bride, after marriage. For some details, see his recent article: A Quest and a Gift.
#grownostr #inflation #maga #vaxed #unvaxed #survival #prepping #palau #survive #collapse #prepper #american #realAmerican
[Image link]Selling wheat or wheat products such as flour in sacks became a part of American culture for decades. One of the elderly women who I interviewed in my study of the Great Depression described her early years where she, her mother, and sisters would make flour sack dresses as the flour sack companies often competed with stylish patterns that these sacks could be turned into dresses once they had served their purpose of transporting the grain or flour to your home or farm. Nothing on a productive farm is wasted and years ago few people in the city would actively waste anything as money was much more difficult to acquire years ago.
Many farms are in debt. We are not. A longer explanation of this is available in my November article part 3. Debt is so important of a topic that this needs to be explained as debt destroys dreams. Debt is the thing that often will drive you off your land, out of your home, and take you away for many hours from your family on a daily basis to work a job in the city where you have little control until someone figures a way to remove the cost of your labor from their profit and loss statement. Even if you are reading this from inside of a city or suburb working a job, this discussion will have great relevance for you. If you are not in debt, congratulations. If you are trying to get out of debt, hopefully the paragraphs I have written on debt will encourage you.
Acreage cost is to the point of being simply uneconomic for someone to wake up and say let’s move to a farm and the farm will pay for itself consistently with your labor and you can have a great standard of living from annual crop sales. The last time that was true in the Midwest was possibly the late 1940s to 1950s and that “Golden Age” soured quickly. Whenever I look at various farm budgets, one thing needs to be considered: it would be difficult to justify buying farmland at these prices for the purpose of possibly getting a return if you are buying it with a mortgage. Generally, land is illiquid, can be volatile in price, and difficult to extract profit from on a consistent basis.
Land is no longer free or available at a reduced cost. The various land for labor schemes such as the Homestead Act of 1862 or land for a few dollars frameworks such as the Preemption Act of 1841 to settle the country are no longer available. Good tillable ground costs thousands of dollars an acre to well over ten thousand dollars an acre. I am sure that an Iowa corn farmer is reading this is saying maybe “Single Farmer” has not heard that it can be tens of thousands of dollars an acre. Yes, I saw some of those sale sheets with parcels of tillable ground that have sold recently.
THE ECONOMICS OF FARMING

I often hear statistics that farmers receive 15 percent of a food dollar. That statistic really needs some examination in comparing it to previous generations. Back in 2016, we sold wheat in the $3.80 range and we were fortunate in that the official statistic for wheat for our area is $3.20 a bushel. I will be generous and use our $3.80 a bushel number: At that number, a pound of wheat is a little over 6 cents. Wheat is commonly used in bread, so an example that I often think about is how much of a loaf does the farmer get and that often demonstrates the difficulty in profitability.
For these purposes, I will say one pound or 1/60 of a bushel is the amount of how much wheat is used for the loaf of bread (although many bakeries use less than a pound of wheat flour per loaf, so they could bake more than 60 loaves to a bushel). In 1950, a loaf of bread was 12 cents and the family farmer would sell his wheat for 3.4 cents a pound receiving about 28 percent using that equation. Using the 2023 full year numbers as this is being written in late December 2024 before the complete numbers are available which likely are higher, the average price for a loaf of wheat bread was 2.54 dollars and we a family farm sold our wheat for under 9.5 cents a pound earlier this year receiving under 4 percent using that equation. The price we sold wheat actually declined in 2024, versus what we sold it for in 2023. There are a lot of people paying more than 2 dollars and 54 cents a loaf for bread further reducing a farmer’s percentage.
All of those are gross numbers before any expenses are paid. There are so many expenses which usually include routine and necessary expenses such as seeds, fertilizer, farm machinery, fuel, taxes, and transportation. That takes the 9 and a half cents a pound and really reduces it significantly. If you have not sold a large agricultural commodity by the semi-truck load, you probably do not know that there are subtractions even when selling it. After the net weight is calculated (subtracting off the truck), there is also a reduction if the moisture content is above certain established moisture thresholds. If it is higher, then subtractions will be made because they do not want to pay for wet grain which has to be dried out and this costs money. There are also subtractions for foreign material that is not grain as they equally do not want to pay for stones or dirt.
Transporting the crop to be sold is a gigantic undertaking. For teh sake of efficiency (remember anything that is done on this scale is to be done as quickly as possible or you are not maximizing profit potential), a semi-truck is often used for transport. Some farmers will use grain haulers and this can cost more than a hundred dollars an hour depending on the distances involved. Most people reading this are not seeking to enter into the commercial farming business. There are several points that are very important to understand, since someone who wants to be prepared should consider the necessity of food storage at the family level and the complicated process being described to get food from the field to the first stop along a very long path to your table.
At these low levels for a bushel before subtracting everything required to raise that crop from seeds to cost of transportation to the grain elevator, there could easily be a loss, so not even a penny is made for all of that work. The farmer essentially not only worked for free, but he also has to pay many bills which could drive him further into the red and if this continues could drive him out of business. It was not always this way. There was a better time for farmers, a golden age of farming in the post-Second World War world.
The late 1940s was a time when America was expanding. Many returning veterans of the Second World War returned home, married, and began the “Baby Boom” which was an unprecedented expansion of both our population and the economy. The United States exited the war relatively unscathed with large demands of food from overseas to feed a population desperate for food after six years of world war. Wheat prices reflect the growing demand with 1.91 wheat in 1946 to 2.25 wheat in 1947 and even by 1950 it was still at 2.02 a bushel and through 1956 never went below 2 dollars a bushel in our area. The 1950 price is equivalent to 26.44 dollars a bushel using the latest data of November 2024 from the consumer price index. Using the equivalency in silver, it would be much higher. Those are gigantic numbers and gave the farmer enormous purchasing power. If you look at the historic records for family farms in this era in the Midwest, you will often see family farms producing an equivalent of three salaries compared to city jobs in this era. However, the post-war boom led to overproduction and that in turn led to eventual price declines.
Agriculture does not exist in a vacuum especially in an age of the ability of politicians to tax one group and give resources to another group. Farmers often become a group of people who is pandered to by various politicians promising to restore past glories or for stability in pricing as this allows long-term planning especially based on debt repayment. The concept of “parity” programs which all current subsidy programs trace their ancestral roots are one such example. The period of 1909 to 1914 has been termed the “Golden Age of Agriculture” and at averaging 87 cents a bushel wheat for this period was very good compared to years during the period starting with the Panic of 1893 lasting until 1897 with wheat prices in the first three years of the Panic averaging 43 cents a bushel. Back then unlike the 1950s when gold was unable to be used in commercial transactions inside of the United States, 87 cents for a bushel of wheat was very impressive: if you could sell 23 of these bushels you could put in your pocket a 20 dollar gold piece containing almost an ounce of gold (.9675 ounces of gold to be exact).
Today that equivalency would be $113 a bushel wheat at current gold prices as this is being written in December 2024. Using the more common consumer price index (which many observers say that it undervalues inflation by excluding and often redefining categories), the price of 87 cents a bushel in 1914 to today would be 27.45 dollars a bushel. At that price, farmers would be able to make a consistent return comparable to the level of a 1950 farmer discussed earlier. The wheat necessary to make a loaf of bread would be a little under 46 cents which is not completely absurd considering some restaurants in our largest cities are charging three dollars or more for a couple of slices of toast.
The same can be said about the “profit” that any number of people are making between a farm to your table. The more people who handle any commodity, the more it costs because each person needs to get paid. The grocery store has small margins with massive bills to pay include lots of “shrinkage” and restaurants have their own challenges which also can reduce profitability. Knowing people in both industries has allowed me a view to be able to say that no one is getting rich in feeding the average person.
The logic behind a “parity” programs is that the farmer would receive a payment if his income fell below a certain level tied to a certain time period based on what one party says is a “fair” amount. The issue is simple algebra meaning that if an “operation” is done to one side it also has to be done to the other for things to be equal: for a farmer to receive a payment from the government, someone needs to give it and eventually paying the bill every American or more specifically, the taxpayers. Fairness is not something that can be legislated or regulated. A free market determines price with supply and demand working out toward an equilibrium continually adjusting depending on the trajectory free people choose for themselves. That is fair, but “fairness” to those who often advocate it means someone has to take from another person by force if necessary to create the playing field they determine is economically just.
Ignoring the free market and trying to institute quotas often results in negative results such as lower quality, lower production, destruction, or production that is not wanted. Examples of this include when the U.S. government during the Great Depression tried to increase the price for certain commodities so it paid for crops or animals to be destroyed in order to temporarily raise the price. This does not work because the producers were paid for the destruction and eventually everyone paid higher prices than the market price.
This little history lesson affects each American until this day because during this period of economic upheaval, the country shifted away from the free market and embarked upon quasi-governmental control of varying degrees of every facet of your life. With the election of Franklin Roosevelt, free market economics was replaced by economic theories which required regulation of free markets and coercive controls to be introduced. As you could imagine, there would be a conflict between men who wanted to carry out their role as men of being providers and government which wanted to control their ability to feed their families through central planning.
The story of Roscoe Filburn, an Ohio small farmer who was just trying to grow wheat to feed his family and cattle during the Great Depression year of 1940 is illustrative of the lengths a central planner must go to smash the initiative of small independent people. Roscoe successfully grew wheat mainly for his own use feeding his family and animals with some extra for his local community. He grew beyond the numbers he was allowed to grow by the government (back then in an effort to increase price, the government gave farmers a certain allotment and Roscoe was not allowed to plant wheat on half of his acres.) The wheat never left the state. It was not sold interstate (between states), but intrastate — in fact, in his very local area. He was fined and this eventually found its way to the Supreme Court where in Wickard v. Filburn the court ruled that the government could regulate commerce that never left the state because if he did not grow the wheat, then he could have purchased it thus affecting interstate commerce. That was rather shaky logic, but it became the foundation of the modern interpretation of the interstate commerce clause which allows the government to potentially regulate anything it wants in your state even if you never leave it.
Everyone in our nation actually lost some of their liberty with that decision. It led to a growth in the size of government which never acts as efficiently as free people making decisions in their own area. The first large scale programs to control and subsidize agriculture began in this era and they continue to this day. Some of the quotas have been suspended for years such as wheat quotas that Roscoe was fined for violating. All of these programs had a goal of “saving the family farm” by trying to raise prices and consequently incomes for family farmers. None of these programs have been successful when looking at overall numbers.
In 1960, John F. Kennedy was campaigning across the country and he gave a critical speech on the future of agriculture at the National Plowing Contest. At the time, there was a debate on how to save the family farm through a parity program to guarantee an income at which candidate and later President Kennedy gave a pledge:
“First, we pledge ourselves to securing full parity of income for the American farmer. By ‘parity of income’ I do not mean a vague target or a high-sounding goal. I mean a clear, easily defined concept which can be mathematically ascertained and computed. Parity of income is that income which gives average producers a return on their invested capital, labor, and management equal to that which similar, or comparable, resources earn in nonfarm employment…Here is a concept which strikes to the heart of the farmer’s problem. It does not concern itself directly or solely with prices – with what the farmer receives – but with his net income, his return, the only figure which is meaningful in determining his standard of living, particularly in this age of the cost-price squeeze. For the farmer, is the only man in our economy who has to buy everything he buys at retail – sell everything he sells at wholesale – and pay the freight both ways.”
None of this was successful and the almost 4 million farms in 1960 became the under 3 million farms by 1970. Many farms during this period of high inflation and lowered prices were forced to take on debt especially after the inflation starting in the mid-1960s. As you may already know, silver was removed from dimes and quarters in 1965, being reduced and then removed from half dollars starting in 1971. If you purchase farm ground and go back far enough in examining the history of the property through the deed records, you will sometimes see mortgages in this time period of people trying to borrow their way out of rising prices and declining incomes.
By the 1970s, farm policy took an interesting turn when Earl Butz, the Secretary of Agriculture, told farmers to plant from “fencerow to fencerow” (rejecting the previous policy of trying to increase price through decreasing amounts of planted acreage of commodities) and told farmers “to get big or get out.” All of this encouraged monoculture emphasizing a single crop to maximize time and resources which has created soil depletion and also subjected farmers to dependence on the fortunes of a single crop. Family farms in the 1970s had to contend with high prices of the inputs required to produce a crop and getting bigger was very difficult as land values continued to climb in the 1970s along with every other tangible item being squeezed higher in inflationary pressure. The number of farms declined by almost another 500,000 during the 1970s. However, the worst crisis was actually just on the horizon.
The decade of the 1970s was a period of high inflation where people were willing to pay more for tangible items as these were seen as a hedge against further inflation. People rushed into buying land, houses, cars, and almost anything of value as waiting often meant that the price would be higher. I have interviewed people from this period who were trying to purchase homes and they commented that if they delayed prices were increasing much faster than they could save, so many would try to use credit in order to borrow to stay ahead.
All of this inflation was largely a result of the decision of the United States government to move the dollar away from being pegged to gold which increased the price of gold from 35 dollars an ounce to 850 dollars an ounce by 1980. Interest rates skyrocketed reaching over 18 percent by 1981. Farmers were not immune to this decade of price increases and many decided to follow the advice of Earl Butz both moving toward monoculture of commodities instead of diversification as was more common on earlier family farms and also to purchase more land to increase the efficient use of the equipment which was rising in price.
All economic bubbles eventually pop and this one resulted in an economic destruction in the farming sector which could be argued was worse than the Great Depression as measured by bankruptcy filings. The crisis actually peaked in 1985 and the price for 1986 wheat in our area was actually even lower in 1986 than 1985 bottoming out to 2.25 a bushel, a level first seen in 1947.
Farm bill after farm bill has tried to save the idea of the family farm. Our nation has been living under farm bills since the 1930s with each multi-year act (bills that are signed into law are called acts) trying to “help” farmers starting with the “Agricultural Adjustment Act” of 1933. I am writing this in the time of an expired “farm bill” where there is an interesting debate going on about how to “help” farmers. Farms growing specific commodities that are broadly consumed in the country such as wheat, soybeans, and corn are usually eligible for various financial assistance depending on the provisions in the act.
The Department of Agriculture (USDA) is the best source of information and they routinely send communication periodically to farmers both electronically and through the mail informing farm families about these various programs. Deciding on the merits of each program in the current farm “bill” and how they apply to your operation is outside of the scope of this article.
The Biblical foundation of individual economic wealth creation is to exchange your time and skills in the form of labor for money and this becomes your capital. You can then take that capital that you earned and further invest it by saving it for a “rainy day,” further invest in yourself building up your business or skills to give yourself further competitive advantages in the marketplace or investing in the business of another individual with the expectation of further profit. All of this is hard work often requiring a lot of “sweat equity.” The opposite of this is to make a loan and get the capital today instead of taking the time and learning slowly using compounded knowledge instead of interest gradually growing your business. Like all easy roads, the road of borrowing has a unique toll of compounding interest that must be paid or you could end up losing more including any collateral.
Loans and other direct subsidies are keeping afloat many farmers today. Going from one debt payment to the next loan is unfortunately the case for many farmers in our country. “Beginning farmers” are offered loans and farmers are offered operating loans. There is no shortage of people offering loans, but it is often very difficult to pay these back as I have mentioned many times. Without the farmer, there is no food. Governments have many times tried to figure out ways to encourage agriculture making it a cabinet-level office in 1862, but instead agriculture has grown from self-supporting to extremely dependent on government for funding especially since the 1930s.
During the major famine prior to the Bubonic plague that was discussed in Part 1, prices increased by more than 300 percent in an area that was heavily affected in France. Back in the Middle Ages, it ranged from very difficult to impossible to afford food at the peak of a famine except for the wealthiest, so people would starve. Tripling of food prices now to Americans in 2025 would be difficult, but it would be closer to historical norms in the early 1900s where Americans spent over 40 percent of their income on food. This was a different time where many Americans had gardens, hunted, and fished for food and almost all of this food was consumed at home (restaurants were not as plentiful). In 2019, Americans were spending a little over 10 percent of their income on food and this has increased with the recent inflation over the last few years to over 12 percent.
We are not benefiting much and usually not at all from higher prices as the increased prices you pay usually means farmers are paying higher prices for the seeds, machinery, fuel, fertilizer, and everything it takes to produce a crop. Back in 2022, we sold wheat for over 8 dollars a bushel, but instead of us singing “Happy Days are Here Again” (a song people sang during the Great Depression to lift their spirits), the price was more of a mirage than some new level because everything also went up in price. Futures actually spiked to over 13 dollars a bushel for wheat at one point.
Nitrogen fertilizer based on local prices in 2022 was almost $1,000 dollars a ton compared to in the $300 a ton range back in 2016. Remember the wheat price in 2016 was 3.80 a bushel (using the fertilizer comparison we would need to sell a bushel at over 11 dollars for the same equivalency). Whenever you see higher food prices, farmers are unlikely to be making more “real” money and often are losing money on a “real” basis as the higher prices often do not adjust for the higher input costs. Prices usually go up either because of a shortage due to a crop failure that the crops do not produce at normal levels or sometimes there is an international incident such as what prompted the higher wheat price as there was uncertainty in how much wheat would be produced in another area of the world which is also considered a breadbasket like farms in the Heartland. Prices can rise and fall very fast in an international crisis. I noticed in 2023 the price of wheat dropped from 7 dollars to 5 dollars a bushel in 3 months as more inventory became available.
The good news is that food is more available at a lower price with fewer people having any involvement in agriculture than for the majority of history. Currently, Americans are able to purchase wheat at 10 percent of the price of someone in the Middle Ages and chicken at just 4 percent of the price meaning that chicken is 25 times more available to you. You may be asking yourself: Why is Single Farmer talking about chicken? Chickens both broilers for meat production and layers for egg production consume wheat or other cereal crops as a large percentage of their diet, so large increases in grain prices show up in chicken, egg, and milk prices along with any other animal that consumes grain for its caloric needs.
The number of hours required to complete an agricultural task has been in decline for over 100 years. This is one of the key concepts that you need to understand in order to have the best chance of surviving the future as these efficiency increases also are across many industries.
Time is not spread out evenly on a farm which is a problem from a labor perspective. There are many times in the life cycle of a grain farm where there is nothing to do, but wait especially with dryland (non-irrigated) farming meaning that you allow natural precipitation cycles instead of introducing irrigation through pivots. There are some times during the initial stages of planting and the last stages when harvesting that there is too much to do in a given day given the needs of human operators.
I am simplifying this process as there is preparation of the ground necessary to plant, usually a couple of applications of fertilizer in the late Fall and early Spring for a “top dress” application or having to treat the crops for specific conditions. (Including some who will use a crop duster if conditions necessitate that step.) Most of the time it is allowing natural processes to unfold and that usually occurs on an observable timetable. That is both the problem and the solution and this concept impacts every reader in this country.
Modern farming is an extremely capital-intensive business. Perhaps you were or know someone who was an apprentice and progressed to being a journeyman in their field. This stage often requires ownership of tools as a journeyman has developed skills and ownership of materials necessary to carry out his craft. I have heard complaints about people wondering why someone would need to spend over ten thousand dollars on tools to work at a job. Tools cost money, many often “disappear” having a value that allows them to be turned into ready cash by men whose morals need realignment, and all of this shrinkage can cost an employer their bottom line, so men who own their own tools are typically paid more.
A workman who owns his own tools without any debt often has demonstrated a long series of steps toward responsibility. This is much the same as a man in Virginia in 1620 who was industrious enough to be able to afford through his own strength land and resources was seen as worthy of the next step of marriage. Now, a modern farmer will often have a tool and equipment budget in the millions of dollars. Obviously, you don’t wake up as a young man and say “that farming business sounds like a good thing, so I am going to get into it.” You are born into it or you buy into it often successful at something else as you seek diversification. Gone are the days when a strong back and some initiative would allow you entrance. That era has long been closed.
Many farmers actually are a combination of owner of some land and a tenant/contractor also working their neighbor’s land either for a set cash amount or a percentage of the crop. Because of the high prices of cropland, they often own only a percentage of land that they actually work. The high cost of machinery and the overall efficiency of machinery are the two reasons why so few people (as a percentage of the population) need to be in farming.
The greatest problem is the capital-intensive nature and I will briefly highlight a couple of areas. Earlier you read about the humble funnel and the tractor. There is a lot of single-use machinery on a farm. Consider the process of getting the seed into the ground. From ancient times until the industrial age, people would broadcast wheat and this often made a nice meal for birds and a fairly low yields at harvest which because of the uneven nature of the application. This changed with the introduction of tractors and the implements of introducing seed into the ground such as seed drills and planters.
Speaking in general of row crops: Planters plant the seed at a precise depth having an acceptable number of plants per square foot neither with too many or too few as either scenario will not result in optimal conditions for plant growth and harvest using a combine. This obviously is labor intensive for an individual without machinery. Now, a large modern planter can precisely plant upwards of 100 acres an hour! Planters have not followed Moore’s Law of semi-conductors, but great strides have been made and you can see the overall decline in labor needed on a farm through the ability of being able to plant six rows in the 1950s to 48 rows, today. If a person attempted to achieve this same level by hand, it would likely be a fraction of an acre a day for planting with enough exercise and calories burned that they would not need to go the gym.
There is a cost associated with this massive efficiency. A modern planter with that level of capability costs over $500,000 plus the cost of a tractor which can easily be another $500,000 to a million dollars, so a modern farmer can be spending over a million dollars to be able to complete one task. Some of the tasks will use that tractor again during the agricultural year, but there are so many other single-use pieces of machinery. All machinery requires regular “feeding” of fuel and maintenance. Most passenger vehicles have under a 20 gallon tank and that can be expensive: Filling up a large tractor or combine can easily cost hundreds of dollars to over a thousand dollars.
Consider how plowing was done in the early 19th century where one man and one horse could plow an acre per day and some people added additional horsepower, so maybe your could increase it to 10 acres a day with more horses. Of course, the additional horses cost money in feed and time required for care when they are not doing agricultural tasks. Unlike tractors, there is a potential for natural reproduction of horses. (Unlike mules which were also often used on pre-industrial farms.) The cost of mechanical tractors is enormous, but the efficiency is amazing: Plowing has also undergone a remarkable increase in efficiency at current record levels of hundreds of acres in daily work capacity of mechanical horsepower versus animal-based agriculture in the 1800s.
I often think about the future of agriculture. All of us live in a very interesting time. Fewer people have ever been involved in the growing of food as a percentage of the population, but many of the farmers are really struggling. The debt that I spoke of so many times is still often a large factor in farming. We have no debt, but debt is serious as it effects many of our friends and people in our country who are in farming. We are customers of many agriculture-related businesses, so often we find ourselves being recipients of various “magazines” these businesses send to us through the mail. I put all of our agricultural-related information into a box throughout the year for tax purposes and some of these magazines end up being put into another box (with the intention if it is an article that I should read or refer back to someday). I decided to pull some of these magazines for a few years to get a general idea as to what was being discussed. Some of the articles are talking about increases in efficiency, some new product out there, or someone’s thoughts on the commodity market, but many times it is discussing the financial aspects such as “growing liquidity,” “reducing costs,” or “increasing revenue.”
I am writing this during the latest “Farm Bill” discussion in late December, but a summation of the reason for the billions of dollars of extra subsidies is useful to show how we ended up here having to subsidize food production. Many commodity production farms have entered into their second plus year of financial downturn, so they need to get loans to help be able to cover family and farm costs into the new year and until they receive their first checks for the 2025 crop which could be mid year for many commodity farmers. The current “solution” is for the government to give farmers money so they can show the banks that their financial condition “improved,” and they can then pass the necessary lending hurdle to get approved for a bank loan to continue farming.
Many of these magazine articles talk about loan to value, debt to asset ratios, or the impact of interest rates. The ideal state is to have no loans. However, many farms have large loans on them: the small farms average over 200,000 dollars worth of debt with the largest farmers averaging almost ten times that worth of debt. Net farm incomes this year are expected to decline. If a bank would evaluate most farms as a business, they would laugh most of the people applying out of the building, but a farm is unique in that people need to eat. A lot of people will say that we can just import food from elsewhere like we do a lot of manufactured goods that were previously made in our country until the late 20th Century. We export about 20 percent of our food to the world. Under one percent of our GDP is output of food from farms, but the vast majority of calories you eat are grown somewhere inside of the United States either directly eating it or being processed through livestock feed.
The problem is that farming has for years been a non-self-starting endeavor. Probably the last time was during the Homestead years, but even then you needed to start with some type of “grubstake” to begin. And it is at the point of being non-self supporting. (The cost of land and everything it takes is many years beyond what you receive from a crop if you have an interest expense from debt on top of your other costs). A healthy percentage of farm “profit” is often government subsidies (in some recent years across all farms it was 40 percent of the income was from government subsidy checks). There are some farms that do not take any government payments out of principle, not wanting to have the government involved in their business. Many farms rely on them as a percentage of their “profit” to justify the massive costs involved and sometimes the subsidies are the difference between a “profit” and a large loss.
There are no easy solutions: all require work and pain. Some people say to eliminate all of the subsidies immediately, but then a lot of farmers would leave farming and we would have less food. Most farmers are independent family farmers like us meaning that we can decide what food crops to grow on our land. These decisions are made on a family level. If a crop is no longer self-supporting, it is no longer grown. Because of crop prices, we have decided to stop growing several crops that we have historically grown because we no longer believe it is worth the risk, so we reduced our financial exposure.
We do not owe anyone any money, so we do not have a bank to report to who could influence our decision-making process. In this scenario which has little likelihood because of the catastrophic downstream effects that would occur if these subsidies were withdrawn, the farmers who remain who were not taking the subsidies would experience more profit, but your grocery bill will probably be much higher. Right now, every American is paying about 150 dollars per person per year if all of the subsidies were divided out equally at even at a high amount of 50 billion a year in which many years it is lower.
Most people would think that the “Farm Bill” is about farming, but the majority of funding for the “Farm Bill” is normally about 80 percent of funding for the “food stamp” program now called Supplemental Nutrition Assistance Program (SNAP). My family and I have never begrudged helping out needy people and are always trying to help people. However, helping often becomes hurting when government is involved as individuals are not counseled by people knowledgeable about their situation applying healthy doses of “tough love” when necessary, but are categorically eligible. The one problem with all subsidies whether it is to farmers or to needy people is there is never a way in these programs to encourage people or industries to become self-supporting. The current “food stamp” program started out at costing 75 million dollars in 1965 and in 2023 it costed almost 113 billion growing from about a half a million people in 1965 to over 40 million people today. The problem is that they have resulted in more people on them (not fewer), we as a nation have to borrow for these programs, and our nation is over 36 trillion dollars in debt.
President Reagan joked that “nothing lasts longer than a temporary government program.” There is so much truth in that because each program usually starts out as a “pilot” program and then expands eventually to becoming a sacred cow which could never be reduced, only expanded. Feral hogs annually cause billions of dollars of damage to crops across many states. In 2014, funding started for a “National Feral Swine Damage Management Program” and the 2018 “Farm Bill” contained a provision for a “pilot” program on feral hogs. Some new farm bill advocates want to make this program permanent. Over the years, first settlers and then farmers hunted wild animals because their continued presence would reduce crop yields and create problems with farm animals. Advocates of the feral hog funding want to increase the amount to study and “control” it by doubling the appropriation of the 2018 levels.
“Rule 308” still works well to solve issues with feral animals and it is often cheaper than spending hundreds of millions of dollars “studying” problems. We do not have any large dangerous wild animals in our area in large part due to the topography in our area and as these have been hunted and trapped by previous generations. Trapping can be more effective especially in eliminating large numbers, but less glamorous to people who enjoy “the hunt.” Often you will see government create a problem and “pay” for the solution while still allowing the problem. Consider the case of the re-introduction of the wolf to western areas of the United States.
If you tried to explain this to someone from the 1800s, you would not be able to explain the story of the modern wolf to pioneers who would reduce predator populations whenever they had an opportunity as they knew the damage a pack of wolves can do. Now, wolves are “federally” protected in many states (this is a brief comment not covering the whole story of the “re-introduction” of the wolf) with their “meals” being subsidized through the taxpayers in many instances through federal indemnity payments when they are “federally protected predators.”
Farmers do all kinds of interesting things with their grain in an effort trying to get more for it. Some farmers try to guess what the future price will be by getting involved in the “futures” market. No one knows the future. We do not get ourselves involved with the futures market. Some try to hold grain expecting the price to increase (which may or may not happen for years). You can store grain in bins and then truck it to the elevator if the price is higher or you need to pay a bill. Some people store it at the elevator and this also costs money. My dad believes in selling the grain. Many times the price is higher initially and then as more supply comes in it lowers unless there is some type of international event which could cause an increase (supply and demand at play here and everywhere).
Our farm philosophy has been to regard the money that we received from our farm as “seed capital” for other ventures, not constantly trying to see if we can extract every last possible cent out of this investment often risking more money. There is a lot of wisdom in the old saying of “don’t pick up pennies in the path of a steamroller.” Over the years, we have diversified into other businesses outside of agriculture and are not as subject to price shocks as many other farmers.
Never before has been less labor needed to farm, but the costs to enter into commodity farming are extremely high. I see the total amount of labor decreasing further with the growth of fully autonomous farm equipment. The days of a farmer borrowing money going from crop to crop could be numbered if this equipment is able to achieve true autonomy in the upcoming decades. Most labor in the form of muscle applying itself to a task has been largely replaced by mechanization. A “combine operator” in upcoming years for the majority of tasks may become as obsolete as a lamplighter. Each innovation results in job loss where people move to something new. From scholars with quill pens diligently copying the Bible before the introduction of the printing press started making the Bible more accessible in the 1450s to linotype operators replaced by phototypesetting, and eventually to computerized editing, there is always an effort toward efficiency for most commercial production. As individuals living in the country and preppers, we are aware about the complexity of modern life and know how to do things in both ancient and modern ways.
The most successful people that I know in agriculture are always “future-oriented” with a deep appreciation of the past. Over the years, successful people who live debt-free have seen the prices of commodities rise and fall and are not much disturbed by them as they are less subject to price fluctuation. The years of larger checks in farming allowed them the ability to develop a surplus which they were able to invest. Many individuals expand outside of farming in order to diversify while other successful people sometimes enter into farming at optimal times in order to diversify. Productive land has maintained a value to the individuals living on it even during periods of both deflation such as during the Great Depression and during periods of high inflation — seen quite recently and in the 1970s.
To survive and thrive in the 21st Century in farming one must be nimble, avoid debt, have a variety of income sources from businesses that are unrelated to agriculture, have friends, and most importantly to have faith in God that He put you here for a purpose. We enjoy living on our farm and consider each day that we have here to be a blessing. I do hope that someone reading this will know a single young woman who is also looking for a husband and can tell her or her family about me. It is my sincere hope that you have enjoyed this little journey into understanding more about grain farming in the 21st century.
A Concluding Note From JWR: This young man is prayerfully seeking a wife. He is offering a gift of $18,000 to whoever introduces him to his bride, after marriage. For some details, see his recent article: A Quest and a Gift.
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