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Comment by htag | Hacker News Reader

There is a massive difference between a 100 acre farm and a 11k acre farm.

A 100 acre farm (producing generic commodity crops) won't have be able to afford fully modern equipment described higher in the comment chain. Even with mostly 20th century equipment you'll be surprised at the ratio of total assets to annual profit for a 100 acre farm. The numbers might be $3M-9M of assets for $100k-300k profit.

The economies of scale conspire to push farms to consolidation. The equipment that increases productivity will receive higher usage rates, so capital investments are more efficient. If you have anything between 80-5000 acres you will clearly be better off liquidating everything and playing the markets. It'll be less work, safer, and more profitable. The family farm died in the dust bowl.

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You are correct.

The 580 acres we rent was enough for my grandfather to support a family of 10. Today, I could support my family of 3 with that many acres if I ran a show farm near an urban center. But as a working farm it is unfeasible to support a family.

It's sad. 500 acres used to be a decent sized operation. Now, 10k is a starting out size.

Are you saying that it takes more land to support the same number of people? If so, why?

Edit: maybe I'm mixing up the meaning of support here. Do you mean support as in financial support through the farm's profit, or sustenance support, i.e. feeding the family from the farm?

Profit, in dollars, per acre has gone down. You need more acres for the same profit. Modern ag-tech is much more efficient.

I assume you're getting at the major corporate farms exerting a downward pressure on prices, which is thus lowering the profit per acre?

The biggest factor is technology. The same capital can produce more food. I think that’s what you’re talking about but not really sure. It’s a good thing for everyone but the farmers. The cost of food is one of the few things that has significantly gone down relative to minimum wage in the US.

Supply has gone up more than demand. Profit margins have gone down.

No need to reinvent the wheel:

https://en.wikipedia.org/wiki/Economies_of_scale

Your last sentence doesn't make sense. You would expect yield to go up if ag tech is efficiënt. Profit going down is a sign of organisational change.

For commodity products, profit always trends to zero.

Becoming more efficient tells you that yield is going up. It doesn't tell you anything about profit: that depends on the market.

No, efficient technology will reduce profits to nothing and eliminate an industry/role entirely in some cases.

Note that the profit and profit margins are highly dependent on crop.

I believe he is saying the COGS doesn’t work out in favor of small farms against bigger ag-corps.

Those bigger operations can afford to reinvest in technology and evolve to do more with less (people).

I'm going to slightly disagree with "it's sad" part; understanding it's unfortunate on local / personal scale, food getting cheaper is what allows all of us here at hacker news to do something else rather than cultivate food as primary preoccupation of majority of population :-/

I don't think food has gotten that much cheaper in the last 50 years. Don't believe the fake CPI. Just take the average hourly earnings and divide it by something like the big mac index or a basket of food commodities.

Sure, so if I ignore the fake CPI, how do I do that? I can only easily find price of milk from 1995, not earlier; bread from 1980, somewhat dubious sources.

I'm assuming in most countries also, subsidies, formal/official cartels, price controls and other policy instruments would make it very hard to compare apples to apples.

If you don’t think the cost of farming has gone down in 100 years because of better tools, equipment, automation, irrigation, etc, I’m very surprised. You don’t need statistics. Just look at farm implements from 100 years ago.

It's less that it's got cheaper and more that people spend a smaller % of their income on food these days. In terms of personal budgeting it's Amdahl's law at play.

I did that. BLS CPI components which don't change much are available from 1988, some of them even longer.

In the 35 years since 1988:

- dairy has gotten 20% cheaper in terms of wages

- bakery/cereal products have stayed roughly flat vs wages (cheaper since the 90s but more expensive since the 70s)

- fruit/veg products have gotten 5% cheaper in terms of wages (though the same level as in the late 70s/early 80s)

- rice/pasta/cornmeal has gotten 15% cheaper in terms of wages

Caveat: Over time frames this long, average hourly wages don't mean like for like hourly wages for the same job... the number of low-paid "deliveroo driver/amazon delivery guy" low paid part time jobs has increased, pushing averages down. (I.e. things have gotten more expensive as measured by minimum wages, but things have gotten much cheaper as measured by the wages of a skilled professional.)

I ran the numbers average wages/big mac index. And it was showing a decrease in cost untill about 2000 but ever since then the cost of the big mac index has increased in the US, relative to average wages. Not that we should be eating big macs, but it's supposed to take a variety of inputs into account.

Otoh - surely you could feed a family on a fraction of that?

https://www.urbanhomestead.org/

These folks were (are?) doing it on 1/10 of an acre - although that number comes with a caveat that I think they're getting a lot of compost and organic inputs from elsewhere. Plus they're in California growing under ideal weather conditions.

Well, they say they've donated 8 tonnes of food in a year - for 4 people, that's 5.5kg a day. Depending on raw weight VS serving - and at roughly 2.5 kcal/gram [?] - that sounds like it should be in the right ballpark?

[?] guesstimate: https://vegfaqs.com/the-50-highest-calorie-vegan-foods-per-s...

Is there an issue with automation costs on a small farm or is it that margins are too low? Not sure if that’s a good opportunity for companies or startups to target.

It sounds like the problem is that the capital costs associated with automation don't scale down well. Fixed cost equipment like tractors don't scale down well to smaller farms. At a cost of several million dollars for equipment, if you only have low five figure of profit a year you're not going to be able to realistically make interest payments on the capital loan.

It all depends on your living style and how expensive the bare living is. I could hypothetically sustain a family of modest lifestyle (nowhere near poverty, but limited expensive entertainment and gadgets) at least 6 with 200 acres here in Europe. 10k acres would be a giga mega super big farm here, somewhere near 1000 acres people usually consider it exceptionally large and essentially just a business and not a traditional farm anymore.

Are those hectares or acres? One is significantly larger than the other.

Your land must be poor?

500 fully owned acres of grain production would net you several hundred thousands of dollars around here. If you can't support a family on that kind of income, I dare say you are doing something horribly wrong.

The math changes if you are carrying debt or renting, of course.

This is only true if we are only talking commodity crops. But the average farm in the us is still only ~400 acres.

For food crops you can still do pretty well on a 100 acre farm. Berries/fruits/vegetables/etc. Especially if you live in a community with access to distribution for said crops.

I live in an area with a lot of food ag and it's not uncommon for farms of just a couple dozen acres to pay the bills.

If the things I've seen are right, most of the smaller farms like this are side-gigs: the household adults have day jobs.

Sure. My parents have a couple of acres of orchard on their property they pay someone to professionally manage. If they get $5k a year from it they are pretty happy.

There are also a lot of small farms that are run by teachers (works well with the summers off).

But I think you would find that anything over 50 acres in an area with distribution options (either close to a packer for that product or urban area) CAN be a full time job if you know what you are doing and are willing to work that hard.

I know, like, one farmer whose only job is farming, even those who are farming like 60+ hours a week.

> This is only true if we are only talking commodity crops. But the average farm in the us is still only ~400 acres.

This metric is misleading because of how it's calculated. Since you're weighting each farm equally, a 1M acre farm gets the same amount of weight as a 100 acre farm. Therefore, if in a country you have 100 acres of farmland in total, and the farm sizes are 90, 2, 1, 1, 1, 1, 1, 1, 1, 1, you'd end up with an "average" farm size of 10, but in reality most of the farmland is actually part of a megafarm.

425 is just the mean. The median is only like ~40 acres!

While, farm consolidation is a growing concern (pun very much intended), the current reality is that large mega-farms are still the minority. Family owned farms still account for 89% of all agricultural product in the US. 47% of production is coming from farms grossing less than $1 million annually.

Sources: https://www.ers.usda.gov/data-products/ag-and-food-statistic... https://www.usfarmdata.com/percentage-of-small-medium-and-la...

Given a fixed amount of land to distribute, it makes sense that mega farms are a minority, no? :)

Imagine a family that lives on 1/2 acre with two or three goats. The goats breed. The family sells a few kids each year. They are required to register their farm and tag each goat so that certain diseases can be tracked. Their children next door do the same.

The neighbor across the street farms 400 acres of crops. The average farm on their street is 134 acres. The first two families don't even consider themselves farmers.

There are market gardeners making a living with 2-5 acres and a bit of open source DIY tech.

Yup, over last ~25 years my dad (on ~10 hectare/25 acre of land, mix of fruits/vegetables/grains) went from "well off" to "barely getting by", to "just sell off land for housing development and get a normal job".

Kinda sad how the the government subsidizes farming in a way that basically small farmers don't have place in the market.

No one is pulling $100k profit from 100 acres, that’s basically impossible

Oh its possible, just not with non organic corn/soy. 100 acres of pumpkins might clear $1M though (yes, decorative pumpkins)

Pumpkins man!

I helped out a guy from church once who had just switched over two acres to pumpkins. He said he netted 10k an acre that year selling them to local pumpkin patches with almost no work.

Next year he had 20 acres.

Good for him, but I highly doubt the "with almost no work" statement. And besides, having just an acre of pumpkins and noone to buy them can be hazardous. Specialty crops can offer good profits on good years if everything goes right (which usually requires a ton of work, though you can get lucky for a few years), but the risks are significantly higher even if you did everything right.

I grew a dozen pumpkins last year in my backyard. “Almost no work” makes no sense unless he’s got everything automated.

My first job when about 14 was working a pumpkin field/farm, every day, for the entire summer with (debatable) 2 other people.

It's non-stop work. Eventually, it folded and became ... A development.

Of course they are. Raspberries[0].

[0]https://www.canr.msu.edu/foodsystems/uploads/files/Economics...

Many of them are - because the land is long paid off (often been in the family for 100+ years). If you have to make payments (other than taxes) then you need a lot more land to extract a living wage.

As an aside, you can some browse supporting information at https://www.nass.usda.gov/Statistics_by_State/

For example, Wisconsin - https://www.nass.usda.gov/Statistics_by_State/Wisconsin/Publ...

> The number of farms in the United States for 2021 is estimated at 2,012,050, down 6,950 farms from 2020. The number of farms increased in all sales classes except $1,000-$9,999, $100,000-$249,999, and $1,000,000 or more. In 2021, 51.0 percent of all farms had less than $10,000 in sales and 81.5 percent of all farms had less than $100,000 in sales. In 2021, 7.4 percent of all farms had sales of $500,000 or more.

That 51% with less than $10k sales suggests a lot of hobby farms.

You can with cheese. Think of something like Jasper Hill.

100 acres of farmland only requires 1 Ox 100 days of a year!

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