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Wow, my uncle in the same boat. He actually now rents land back to the large farmers and is making more than when he was farming it himself. The new farm is massive, similar number of cattle, methane collectors, manure pipelines...but the owners are far away and the people doing it are just your rural farmhands doing the work because they like it and it's. All that's available. The owners are making $$$$.

Modern farming is a mess from head to toe, been in the making for 40 years.

One of the benefits of living in a semi-rural area btw is that you can easily participate in changing this situation. During the Spring, Summer, and Fall months I can go and pick up fruits and veggies from a local grower -- just show up on their property during regular business hours, go and pick it yourself if you feel like or just pick up one of the boxes they've prearranged. I can get meat from a good local ranch too. I don't think there's any nearby dairy though.

Mega-agribusiness is one of the consequences of increasing urban living. To support really large, dense cities, everything has to be scaled way up. A dairy farm is no longer producing for the 100,000 people in a 20 mile radius, it's producing for millions, and the waste it creates scales up too.

In an ideal world, these mega-producers would be less harmful to the environment than the equivalent number of small producers, because there would be some benefit from economies of scale. But in this world, the mega-producers largely see regulation and environmental caretaking to be cost centers and they pursue the cheapest solutions, which usually involve hiding the problem or paying somebody off or buying themselves some legislation. Smaller producers meanwhile have a harder time getting away with that.

...economies of scale.

The other thing is local carrying capacity. A small herd might not have anything done to the manure, and through the wonders of bacteria and fungi not harm local streams at all. Once the operation is big enough to more closely resemble a Kansas feedlot, that shit's toxic waste.

If there's an oversupply problem, that suggests that perhaps the point where further industrialization was necessary in order to support the population is somewhere in the rear view mirror.

And if the economics of megaproduction involve externalizing costs of dealing with waste, then somewhere we've broken something about pricing and/or regulation.

There's been an oversupply of consumption in the US of most foods grown in the US for decades of course (witness the endless media stories of giant stocks of us govt cheese surplus). With exports we have soaked up much of that oversupply. There are some years when there is less production but generally we have too much; milk seems to be especially bad. My uncle is a farmer and works for the us govt somehow administering crop price supports. A few years ago, he told me that the price supports mostly guarantee that there is a stable supply for food, almost pushing for greater production, thus keeping us close to oversupply (which keeps the prices lower).

I'm not a farmer, I wonder if this idea that us govt price supports for farming leads us to have constant oversupply? And then what if they went away?

During the Spring, Summer, and Fall months I can go and pick up fruits and veggies from a local grower

City dwellers can do nearly the same thing through farmers markets and Community Supported Agriculture services. (except instead of picking yourself, the farmer does the picking)

Mega-agribusiness is one of the consequences of increasing urban living. To support really large, dense cities, everything has to be scaled way up

Isn't it more a factor of how many people there are to feed rather than density?

A million people in a dense city will need (roughly) the same amount of food as a million people spread over half a state.

A million people will likely have more land each. They’ll be able to have gardens and maybe even raise their own animals.

Is that a net environmental win? Rural housing is much lower density than city housing -- so if these million people each had one acre plots and devoted half that land to gardens (which would feed roughly half a person for a year), they'd have a population density of around 0.4 people per acre (assuming 2.5 people per household). Most of the rest of the land would be covered with houses and landscaping.

And that's assuming that each of these people are willing to work a half acre backyard farm, which is a lot of land to maintain as a hobby.

So they are consuming 400,000 acres (625 sq miles) of land, with half of it replacing dedicated agriculture, but the other ~300 square miles is going to low density housing. (which is impossible to serve effectively with transit so everyone has to drive to go anywhere)

In contrast, San Francisco houses 800,000 people on 49 sq miles of land. (which doesn't include the roughly 250,000 workers that commute there every day)

As a total outsider, I wonder what are the efficiencies that these huge operations get, which let them crush the little guy?

Is it that they can arrange huge contracts with distributors/chains/whatever so there is less overhead in the selling part? Is it less scrupulous environmental or animal welfare practices that just mean they are more exploitative and creating more externalities? Is it something else?

I wonder if there'd be some way for the little guys to band together. I'm sure there's already a lot of this with co-ops and such. What's stopping these co-ops from reaching the next level and crushing the big guys?

Economies of scale like everything else. An example is big farms have their own veterinarian staff.

Much of the government management eg subsidies are also favorable to big operations. The expertise of knowing about them, filing and complying correctly, and in some cases even qualifying all are weighted to large players.

> Modern farming is a mess from head to toe, been in the making for 40 years.

Longer than that. The Grapes of Wrath springs to mind.

>>Their story is very similar to this gentleman's: https://www.washingtonpost.com/outlook/dairy-farming-is-dyin....

If I understood correctly the (last) parts of the article mentioning "organic" (here in Switzerland we call it "Bio"), you miss something like this...

The livestock must be adapted to the agricultural area, location and climatic conditions. Livestock may not exceed 2.5 DGVE per hectare of utilized agricultural area in the valley area. At higher altitudes and in unfavorable site conditions, animal stocking must be reduced.

...in your rules/legislation, or am I wrong?

(that's an extract from the BioSwiss regulation https://www.bio-suisse.ch/media/VundH/Regelwerk/2019/DE/rl_2... , at the end of chapter 4.1)

EDIT:

and additionally (chapter 4.2):

Basically, the feeding of the animals takes place with in-house bud food. Conversion feed from own Production may be used up to a maximum of 60 percent of the ration (conversion farms: up to 100 percent). Supplied feeds serve only to supplement the company's own feed basis and are as possible organically grown. Young mammals must be nourished on the basis of unaltered milk, preferably breastmilk become. All mammals are to be fed with unchanged milk for a minimum period. The Minimum period depends on the species. The feed components must be left natural and the techniques of feed preparation used should be as much as possible be close to nature and energy-saving. Feed must not contain traces of genetically modified organisms or derived products of genetically modified organisms that are proportionately above the statutory limits.

No, organic regs in the US are not at all equivalent with Swiss Bio regs.

> I always wanted to move back near my folks but I worry about the drinking water quality due to this CAFO, with the probable high nitrates from spills and the high capacity wells sucking out all the drinking water.

Same. Always wanted to move back to into country farms where I grew up with a small hobby farm, but these mega farms are causing real headaches in that area. 15 miles south of where I grew up, one of them has contaminated most of the wells in a very large radius around the farm and surrounding community. My parents don't have this problem, but it's obvious all of the local farms are being consolidated (and have been for years). Difficult to buy property when you don't know the result of the impact of these mega farms until later.

It is sad to see all the ramifications of these large operations. Between environmental and economical impacts of the area around them, how do we let these get so big? I wonder how many other families are being hurt by the CAFO near your family's farm. I feel for the people who are just trying to run a sustainable business with these huge farms constantly looming in the background.

> how do we let these get so big?

My understanding is there was a big change in policy during Nixon's administration, when agribusiness lobbyist Earl "Rusty" Butz became USDA secretary.[1] His mottos were "get big or get out" and "plant fence row to fence row."

[1]: https://grist.org/article/the-butz-stops-here/

It is because the externalities of such operations aren't priced in. They are allowed to privatize profit and socialize poison.

If you want to fix such problems, fix the incentives that cause them.

> how do we let these get so big

Farm subsidies (artificially cheap grains for feeding cattle) and the inheritance tax (children are forced to sell the land after parents die due to tax obligations)

The 2018 individual inheritance tax doesn't apply to inheritances below $5.6 million per individual ($11.2 million for couples)[1]. I suspect that relatively few small farmers are impacted by it.

[1]: https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-an...

There were 682 estates in 2016 that contained farm assets subject to the estate tax, and on average about 5% of taxable assets on such estates were farm assets, while about 80% of the assets of family farms are family farm assets.

That suggests that the number of family farmers caught by the estate tax each year can be counted on your hands. And even then, farmers (unlike everybody else) get 15 years to pay off the estate tax. So, yeah, politicians claiming to hate the estate tax because of its negative impact on small farms are lying their ass off.

==children are forced to sell the land after parents die due to tax obligations==

Do you have a source for this? If true, wouldn't they just sell a portion of the land to cover the tax, as it only kicks in over $5.5 million?

I'm in this situation -- when my mom passes, me and my brothers will inherit the family farm of 320 acres in central VA. As far as I can tell there's no inheritance tax involved.

Just in case, decades ago my dad put the land in a family partnership of which me and my siblings each own 19%. So even if inheritance tax was a thing for family farms, there are ways around it.

We'll have to pay property tax on it, but that's around $3000 per year.

> Just in case, decades ago my dad put the land in a family partnership of which me and my siblings each own 19%.

Is it that easy to bypass the estate tax? I'm surprised it collects basically any money at all, if all you have to do is make your children "co-owners" before you die.

It absolutely was a thing in the 1970’s. I saw neighbor’s farms destroyed by the inheritance tax. The law was changed, so now the inheritance tax kicks in at a much higher level. Most farmers set up trusts now anyway.

It wasn’t only farmers that got clobbered by the inheritance tax. The children of the local shoe store owner were in the same inheritance tax hell.

Was this in the 70s or more recent? I can't imagine a shoe store that costs more than $5 million.

My family ranch was in North Dakota.

Most ranches and farms are set up so that there isn't much value if you don't sell the whole thing.

You need land, the homestead (house, barn, shop, corals...), a water source (ideally multiple), roads in and out, fences carved the right way...

Yes, you could likely sell a portion of the property, but the parts aren't worth the same as the whole. You'd likely eat the cost of adding in new windmills, water storage tanks, and developing the land in order to get it to sell if you were to carve out a part of your existing pastures and put it on the market.

We basically ended up carving off the farm land and selling that, but we had to pay to put a road in... and fences on either side of the road, cattle guards, and it ended up costing $100k in materials and labor (since we had to hire people to do it given nobody lived out there any more)... all just to make $300k.

TL;DR: Ranches are set up to be units, and while you can sell part of the land, it sucks to do so.

Disagree BTW. Subsidies are an easy target. Affect very little to the bottom lines I've been privy to (managing input price is biggest factor IMO).

Subsidies are an artifact of scale--optics look bad when a big operation is getting 100K USD when they farm 10k acres

Is corn not an input?

In dairy farms yes. Was trying to generalize.

Would you be interested in publishing this on AgFunderNews? A lot of your target audience will be there. Ping me and I’ll connect you with the editor.

Sorry to hear about the farm. Can you talk a little about the financial aspects...cost, milk price etc of your small farm? Do larger farms make a little on each cow but multiplied by 5000 ends up being a decent sum? I guess buying tractors, building sheds etc might be more cost effective with larger farms--spread over more. Also pricing power.

Thanks. I had asked my folks about that as well because it didn't make sense to me they could just "make it up in volume."

They didn't know the secret sauce, but said they are able to negotiate better prices with the creameries due to their volume, and they use their own milk hauling trucks. It's also an open secret all their regular farmworkers are illegal aliens (i.e. cheap labor).

With their volume I believe they're also able to pay better rates for other contracted work like feed harvesting, fertilization, etc. as well. But I don't fully comprehend it myself.

I have a friend who farms some dairy plus corn & beans. He says that the big operations can get better prices on supplies and equipment, while getting paid more for their crop. He doesn't know how to crack that puzzle. Collusion is certainly a possibility.

They can negotiate better prices for the feed they buy as well. Or they just own a feed supplier. That's by far the largest single operating cost they have to deal with.

> all their regular farmworkers are illegal aliens

How do they keep an arm's length away from that hot potato? Contracted through a temp worker agency?

A sizable proportion (half?) of the seasonal agricultural workers in America are undocumented immigrants and have been for 2 generations.

It used to be that they would migrate seasonally and go back home during the off season. But since the 1980s it has gotten increasingly expensive to cross the border, which means that migrant workers must stay in the US longer to pay for the crossing, which means that during the off-season those migrants find other jobs (in factories, restaurants, as janitors, gardening, ....) which they then keep instead of going back to agricultural work the next season. Agriculture then needs to recruit a fresh batch of immigrant workers every season.

Ironically, making the border harder to cross thus works as a kind of ratchet which prevents seasonal workers from moving back and forth, and ends up increasing the total number of undocumented immigrants in the country.

No, it's more of a don't-ask don't-tell policy. Workers provide fake social security numbers that the CAFO is under no obligation to thoroughly vet. The workers with fake SSNs will never be able to collect their benefits on those wages, either - they end up in the IRS's suspense file.

I know this because I married the daughter of the (Mexican) guy who started the Mexican immigrant labor pipeline at that CAFO, when they first were starting to get big and transitioning to large milking parlors.

> Workers provide fake social security numbers that the CAFO is under no obligation to thoroughly vet.

AFAIK unless something has changed in the past few years, it is worse than that. It is illegal for employers to challenge documention that is at surface level in order. Source: a friend that is a resturant owner told me that if a dishwasher applied for a job using suspicious but superficially consistent documents with all the blanks filled in, he could be penalized for asking for further proof. He knew he had illegals working for him, but had a file drawer full of correct documentation in case the INS came calling.

>>a friend that is a resturant owner told me that if a dishwasher applied for a job using suspicious but superficially consistent documents with all the blanks filled in, he could be penalized for asking for further proof. He knew he had illegals working for him, but had a file drawer full of correct documentation in case the INS came calling.

Ya think? :) Of course he knows, everyone knows. Even La Migra knows. Who is going to wash dishes for $x an hour and not complain? In US that's slave wages. So every once and a while they do a little raid here and there but otherwise close both eyes and ears. Good for them, good for USA.

FWIW, I believe business owners can opt into eVerify now and it wouldn’t be illegal to deny workers on the basis of an eVerify failure.

https://www.greenindustrypros.com/business/article/12121235/...

Of course outside of the 19 states where eVerify is required, you’re hurting your bottom line by opting into the program. Not only are you shrinking your labor pool but you have to go through extra steps even to hire a legal worker.

>the workers with fake SSNs will never be able to collect their benefits on those wages, either - they end up in the IRS's suspense file.

And some unfortunate American can't finish their taxes because they end up with an extra W-2 they don't claim, because they didn't earn the money. Or when they go to claim SS benefits and the Social Security office notices that 25 people have been using their number and that they need to produce the last 40 years of their work and pay history to quickly resolve the matter. More victim less crimes.

There have been big waves as big distribution chains have started vertically integrating portions of the dairy industry.

https://www.dairyherd.com/article/dozens-more-farmers-lose-m...

https://www.nbcnews.com/news/amp/ncna887941

It works for large scale operations, because they can use milk as a loss leader. That means they can squeeze producers for the lowest price possible, rendering margins so thin that you basically have to be a hyperoptimized producer to even be able to compete.

It's an example of large businesses creating value deserts, and unfortunately, the political/economic climate hasn't been terribly up to the task of doing anything to slow or stop it.

A value desert is the situation created where an actor corners and optimizes so much of an industry such that meaningful competition in that vertical becomes dead from the start. This puts the actor in an advantageous position since there is no rational reason to disrupt that vertical, which makes it easier to coast along as a major player.

Google/Alphabet has been used as an example of the phenomenon with regards to the digital advertising market. Wish I could find the citation, but I think I first heard of it from an NPR spot.

Not OP, but work in Agriculture. Margins are so thin, you either need crazy scale (5000+ head/acres) or crazy specialization (think organic). Without scale, one bad year and your out of business.

The thing that has always been terrifying to me about those CAFOs are the fact that there can be 5,000 head of dairy cattle and you'd _literally_ never know it unless you were told.

Any thoughts on the feasibility of vertical farming in the future?