February 7, 2024 | By: Jeff Nunley
Guest Author Spotlight:
“We feed the masses.” That was the response of one of my farmers to our Uber driver who shared with us that he was an organic “farmer” that had recently bought 15 acres in Pennsylvania to grow his own organic food.
I was impressed with the insight of my farmer’s comment and how it relates to the war on “big” agriculture by many who have the misguided belief that a farm should be small, diverse, and focused on the wants of the wealthy elite rather than the needs of ordinary Americans who work hard to support their families and put food on the table.
U.S. Agriculture has evolved over decades to be the envy of the world in its ability to provide safe and abundant food and fiber for our country and the world. No other country enjoys a food supply that costs consumers on average less than 10% of their household income. Consumers take for granted that grocery shelves will be full of the items they want at prices that are reasonable and predictable.
Empty store shelves during the Covid pandemic, and more recently rampant inflation following the pandemic, brought into sharp focus how sensitive consumers are to scarcity and increasing food costs. More than anything else, these events reinforced the importance and strategic value of maintaining a strong, stable, domestic agriculture industry and providing a safety-net for the farmers that underpin the entire system.
The marvel of our U.S. food and fiber supply system is due to constant improvements in efficiency throughout the supply chain, but particularly due to improvements at the farm level – where it all begins.
When soldiers returned home after WWII, many pursued other opportunities rather than returning to the farm. For those who remained, farm size grew. Improvements in farm equipment, like tractors and harvest equipment, allowed farmers to cover more ground with less labor. Advances in agricultural science and technology along with the adoption of advanced farming practices have provided a constant pace of improvement that has evolved into the production agriculture we know today.
Today’s farmers produce more output with less inputs than ever before. Farmers use less fuel, fertilizer, water, pesticides, and labor for unit of output today than they did just 10 years ago. The average U.S. farmer has less environmental impact and produces more sustainably than anywhere else in the world. As a result of the constant improvements in efficiency on the farm, food prices have decreased over time.
When I was in college in the mid-1980s, food costs were $1 of every $5 of household income. That number today is less than $1 of every $10 in household income, even factoring in that away-from-home consumption has increased over the same time. As farmers have increased efficiency, the gains have not translated into improved profits. Rather, these gains have been passed through the system to the ultimate benefit of consumers – this is the nature of commodity markets. Affordable food and fiber made possible by efficient, full-time farming operations underpins our economy by allowing consumers to spend more of their income on goods and services other than food and clothing.
Farming has always been a high-risk, capital intensive, and low profit margin business. Farmers’ income is a function of their yield (which depends on timing, weather, and skill) and the commodity price (subject to global supplies and the actions of foreign governments).
U.S. farm policy has evolved along with the changes in production agriculture with the consistent goal of providing a safety net that helps farmers survive weather and market conditions beyond their control. Farm Bill programs like counter-cyclical payments and crop insurance are intended to preserve the strategic resource of domestic agriculture knowing that farmers cannot enter and exit the business like gamblers at a roulette wheel.
Recently, Secretary of Agriculture Tom Vilsack has lamented that 84% of farm program payments go to only 12% of farmers in our country. What’s wrong with that? When you consider that 12% of farmers (roughly 240,000 farms) are responsible for over 80% of agricultural production in this country, it sounds like the support is going where it should. Keep in mind that this 12% are not “mega-farms”, rather the overwhelming majority are family farming operations with gross cash farm income above $350,000 that have grown to keep pace with the economics of low margins and high capital costs.
It troubles me that this USDA has decided the scales should be tipped in favor of small hobby farms like that of our Uber driver, who would qualify as a farmer in the eyes of USDA. But his livelihood does not depend on his farm like those full-time farmers that USDA has decided to penalize.
It also troubles me that this USDA and others have decided that the economic realities that created the marvel of our modern agriculture and food system are wrong, and they know better. I fear that the well-meaning, but ill-informed who believe we should divert support away from full-time farmers and instead target them to fashionable, feel good social engineering that benefits folks like our Uber driver will undermine an industry that provides the foundation for our country.
Finally, I fear that this increasingly popular notion that “big” agriculture is bad could lead us down the road to less efficient, more costly agriculture. The biggest loser of that will be American consumers, especially those who already struggle to put food on the table.
“We feed the masses.” Yep. That’s us. The 240,000 farmers that are the workhorses of our industry. We deserve to be treated fairly.
This opinion piece was originally published by AgriPulse Communications. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Texas Farm Credit.