Looming food crisis 2010

[hayekvindicated]

Re: Looming food crisis 2010

Based on all the comments it seems that farming has been a very depressed sector for a long time. From a contrarian perspective, this may be a good thing.

I'd say there are two arguments in favour of buying farm land and using it:

(1) very depressed for decades and this is due to change;

(2) farmers outperform everyone in periods of severe inflation or hyperinflation - which is the most likely outcome within the next decade.

The arguments against are also very strong. the strongest being that I (or anyone in my family for that matter) have no farming experience (I'd probably have to go back to the 1850s to find a farmer in the family).

There don't appear to be any other ways of playing agriculture. And agriculture is one of the few places where there is still value left. everything else rocketed in 2009.

[labasta]

Re: Looming food crisis 2010

What income do you guys want from farming?

I suppose the obvious thing to do would be to talk to farmers who do the kind of farming you are interested in. If it's cattle farming, how much and where is cattle sold. What determines the price? Are you going for standard food production or are you going for a specialised market like organic food? Is it worth it? What does it entail etc.? Does the farmer know other farmers who want to try what you are doing? If you are a wizard in marketing maybe you can sell your food as some kind of unique health food or whatever. Who is buying it from you? The usual common sense questions really. Doesn't beat actually doing it and learning from your mistakes though.

I know nothing about farming, but thinking out loud if I was given a wad of money to invest and was forced to invest it in farming here where I live in Ireland I would probably go into cattle farming.

Livestock farming may not be so land intensive, so maybe spend most of your money on the number of animals rather than the amount of land. You also don't need level land for that kind of farming either. You would have to do the numbers beforehand without a doubt.

If you know a farmer personally (I know three here in the bogland of Ireland which is no surprise), ask him what his income is from his livestock, what is the work involved, and if he had 1000 cattle instead of for example 100, how much extra land would he need and how many extra people to employ etc. Just talk to him.

Leasing land may be the less stress easier option.


PS. My cousin is a free range chicken farmer and he sleeps about 6 hours a day and works the rest. He looked completely drained when I visited him last. And yet, he says he wouldn't swap the life for anything else. Loves it compared to working in an office. May be it's because he is outside most of the time. Not for everyone that's for sure. His wife separated from him because she couldn't hack the life.


One land owner I know of built storage sheds for businesses. His land is on the verge of a major road and he advertises on the side of the road. He doesn't grow anything. The business is very successful apparently. Although I'm not sure about 2009. He used to grow flowers but it was labour intensive (not for him but for his east European workers) and prices fluctuated dramatically from year to year which was a very real problem so he gave that up.

Another "farmer" I know is more hobby business based and sells bulbs to garden centres and the like (husband and wife work full-time as well). Another full time farmer sells shrubs. Business is way way down in 2009 than 2008. He also has 50 acres of land for forestry. There are government perks for this but he says even with the government paying him for doing it he breaks even with it. He uses it mainly to heat his house (wood burner in his garage).


There are quite a few things you can do with land. Decide maybe what you want to do with it first and for what reasons.

[strittmatter]

Re: Looming food crisis 2010

Just curious, I'd like to know the true state-of-the-union as to the farming economics in and around the Quebec, Canada area. Traveling along the St. Lawrence river bottom a few months ago, I was quite taken aback by the seemingly storybook (compared to Texas) beautiful picturesque well kept and manicured farms - one after another.


Question: Where do they "hide" their junk? Don't all progressive/productive farms have a revolving junk pile, or is it just us?

Maple syrup? Sustainable? No clue but boy is it ever tempting. See for yourself..............
http://www.luxuryestatesandpropertie...d_forsale.html

[MulaMan]

Re: Looming food crisis 2010

There will be no food crisis in Amerca nor Canada. LOL.

Do you have any idea how much food these 2 countries already easily produce at an ultra low cost?

Did you not notice how cheap that 28lb xmas Turkey was?

The most profitable farmland in America per acre are Northern California hemp farms.

A few specially organic, create your own specialty market, sell direct type small farms can make a living against the big boys.

Monsanto = Exxon. Perhaps even more powerful.

Oil is not the key to farming. Farms needs both energy and water. Energy can be replace by human / animal labor as it was a zillion years, but if you can't get water...you don't got no farm.

Water.

[chr5648]

Re: Looming food crisis 2010

Most have forgotten that the US government and the EU and individual european countries subsidize their farms and farmers to keep them from rioting. Search for articles of milk dumping by EU farmers last year. Most of these subsidized farms are small family farms from 10-50 hectacres. Yet they account for a substantial absolute number of actual farms. They are unprofitable except for the subsidies.

In todays world, the only farming that can really be profitable is large scale, economics of scale farming, By that I mean THOUSANDS of hectacres, top of the line equipment, well trained workers. And most importantly weather and environmental conditions that do not screw up everything else.

Just look at NFP the major employment report, its called NON FARM PAYROLL for a reason.

The number one complaint that I hear from farmers, the expense of diesel fuel, since that is what drives tractors and other equipment.

Sources: My experience as a farm helper for a few summers in eastern europe, and conversation with pennsylvania and southern new jersey farmers.

[strittmatter]

Re: Looming food crisis 2010

Oil is not the key to farming.

Wrong.

Where I come from, it has always been common knowledge that the single most important factor for profitable farming is to have one or two of these steel horse-head looking things on the place, and they have to go up-and-down all day long:

chr5648
In todays world, the only farming that can really be profitable is large scale, economics of scale farming, By that I mean THOUSANDS of hectacres, top of the line equipment, well trained workers. And most importantly weather and environmental conditions that do not screw up everything else.

Mostly agree. A growing number of young adults who aspire to follow in their farmer parents' footsteps (more and more do not) are discouraged from doing so. Saddening trend in my book.

[grapejelly]

Re: Looming food crisis 2010

organic farming can be reasonably profitable for a small farm because of the lack of the need to buy inputs.

Joel Salatin runs a great example and I've seen others. For that matter, the cows grazing on free ranges, grass fed through slaughter rather than feedlot fattened, are a model for small scale ranchers. They can market direct to small retailers and customers via the Internet and make a decent living.

[doom&gloom]

Re: Looming food crisis 2010

I will be meeting with a big US farmer who runs and manages contract
farmland in Brasil on Jan 20th. see: www.carrollfamilyfarms.com

Land is running about $1875/ac at present. Two crops a year of cotton
or soybeans. Returns to low teens at present.

If you have serious money to invest let me know.

[iyamwutiam]

Re: Looming food crisis 2010

Hayek - I have some friends in India and they have done quite well in farming. One guy I met 10 years ago- actually let his ground lie fallow for years so he could be organic certified (or something like that) and he has done very well.

Dunno about you -but a lot of Indians came from agrarian based families with small farms (under 5 acres). The way I see it is -you can eat and have aroof over your head. If your a simple person -you will rarely have to deal with the inundation of toxicity that modern society sees as requisite.

My college buddy has a 100 acre farm in Chikmanglur and he is one very happy dude.

[iyamwutiam]

Re: Looming food crisis 2010

Oh and for all the food crisis people -see Food Inc. -worth your while -you will see why the US has the cheapest food prices in the world . Hint -cuz its not real food!

[raja]

Re: Looming food crisis 2010

Please feel free to comment.

Some America-centric comments . . . I don't know much about conditions in other countries.

America will become poorer.
Less money for I-Pods, tanning salons, big-screen TVs . . . but there will still be the same need for food every day. Agriculture may not be a "growth" industry , but it will seem that way as everything else goes down.

Oil is running out, and modern agriculture relies on lots of oil. Food shipped long distances will be replaced by that locally grown. Agricultural products produced with less oil input and not too far from metropolitan areas will do well.

Consider grass-fed livestock . . . .
If you have adequate land, all you do is provide water, mineral supplements and protection from predators. The animals eat grass, and procreate automatically. Your profits grow with minimal input.
If you do it right, you don't need medications or all that other crap typically used in commercial farming.

Choose a location that's not too hot, not too cold, and has plenty of water.

.

[Rajiv]

Re: Looming food crisis 2010

I thought Kunstler was at his best this week

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Whatever you thought our economy was the past thirty years -- whatever model of it you have in your head -- that is definitely not what we are going back to. Like one of Dickens's Yuletide ghosts, Reality is leading us by the hand into new circumstances. We resist like crazy. We throw our hands over our eyes. We don't want to look. We want to return to the comfort of our dreary routines -- living in places that aren't worth caring about, weaving endlessly in freeway traffic, drawing a paycheck at the air-conditioned cubicle, inhaling Buffalo wings by the platterful, with periodic side-trips to the state-chartered casino where there's always a chance of scoring a lifetime's income on one lucky bet. And at the end of the day, you can retire with a simulated prostitute on your laptop screen! And not even have to fork over a dime -- except perhaps for the Internet connection fee.

Reality is taking us out of that familiar, if sordid, realm, whether we like it or not. Our destination is an everyday economy where you rarely travel far from the place you live, where you have to make provision for you own health, your own old age, your own income, your own diet, your own security, and your own education. If you're really fortunate, some or all of these necessities can be obtained in conjunction with your neighbors in the place where you live -- but don't expect an increasingly mythical federal government to supply any of it. Expect a new and different way of organizing households based on extended families and kinship groups. Be prepared for agriculture to return to the foreground of everyday life, where farming is back at the center of the economy. Think about how you will cultivate your best role in a social network so the things you do will be truly valued by the other people who know you. Learn how to make your own music and write your own scripts. Try to study history. Resist cults. Keep your mind clear and your senses sharp.

Even if you have a dim sense that this is where we're headed, most of you probably want to stay where you are. The investments we've made in the current mode of existence are so monumental that we can't imagine letting go of them. This will be the theme of American life for the next couple of years as we struggle mightily to escape the confining armor of the Futility Economy and move closer to ways of life that have more of a future. Right now, all the power and authority in our culture has dedicated itself to remaining inside that old armor.

The Master Wish around the country, including among people who ought to know better, is that we can "solve" our economic problem by finding some other way to run all the cars. Even hardcore environmentalists yammer incessantly about hybrid and "plug-in" cars as the "solution" to our blues. One of Barack Obama's first acts as president was to "save" the giant car companies. This is exactly the kind of signature behavior of a Futility Economy. It's based on the idea that we have to continue driving cars all the time and for everything, at all costs.

The religion of the Futility Economy is Techno-Triumphalism, which is the belief that an endless sequence of magic tricks performed by shaman scientists can defeat the Second Law of Thermodynamics, which rules the universe -- which true scientists ought to know cannot be defeated. Their colleagues, the shaman economists believe in parallel magic tricks, such as the idea that increased borrowing can "solve" a problem of runaway over-indebtedness. These are the actions that currently engage the people in charge of things in our society.

Given this current state of things, and the current course we're on, my guess is that when the falsity of these ideas and actions are exposed, they will become evident not gradually but very rapidly and shockingly. The people in charge of things will lose their vested legitimacy in a flash, and the institutions they command will become irrelevant overnight. The process would be traumatic for all of us as routines we counted on for a thousand particulars of everyday life vanish or collapse. A Great Indignation will rise across the land over the perceived swindles involved. A lot of effort will go into avenging the swindles instead of rebuilding an economy out of the ashes of futility.
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[Serge_Tomiko]

Re: Looming food crisis 2010

Once you bought cheap, profit is sure.
IŽdont think farmland is cheap, by historic standards, nowhere in the world.

while not discussed extensively on this site, farmland has been the best performing real estate asset of the past decade on average. Nationally in the US, prices have increased by about 2.5 times.

[Serge_Tomiko]

Re: Looming food crisis 2010

Oil is not the key to farming. Farms needs both energy and water. Energy can be replace by human / animal labor as it was a zillion years, but if you can't get water...you don't got no farm.

Water.

1) desertification is a real problem.

2) draught animals also need food. Millions upon millions of acres in the US were once used to grow animal feed. We now use that land to grow food.