55 Years And Counting From The Tractor Seat

By bill whitman 

 Somehow, we must at least cashflow a bare minimum of living expenses along with base operational expenses this year. The question each of us must ask ourselves is, “How?”

I was talking to a friend recently and as usual, his sage thoughts have given me so much to think about. He brought up the fact that the American farmer and rancher are among a handful of businesses in this country that produce new products (new money) every year. Think about this for just a minute. Agriculture produces new crops and livestock every year. That means crops and livestock generate new money to support the American economy. In effect, agriculture puts in excess of $555 billion of new money annually.

According to data from the Bureau of Economic Analysis, agriculture, food and related industries contributed roughly $1.537 trillion to U.S. gross domestic product (GDP) in 2023. To simplify this, each farm/ranch in the United States generates production that expands into $247,903,000 economic value by the time it reaches the consumer. This number, to me, is unreal. I mean, I know that our farms and ranches receive the smallest piece of the agriculture pie with so many others taking larger and more profitable pieces, but I had no idea that the disparity was this significant.

I look at these numbers and struggle to relate. Then I try to understand why we as farmers and ranchers are tasked with accepting table scraps while the big corporations continue to make their profit margins as they sell us fertilizer, seed, herbicides, equipment, meat and poultry, satisfying their shareholders with profits year after year. I want to suggest that these big corporations know that our tolerance has limits, which is why they continue to push mega operations. Ironically, mega farms don’t produce the profit margins to satisfy investors, so they invest in real estate. What happens when they want to cash in on their real estate investment? They sell it.

So, what does understanding these numbers have to do with making money this year? All these businesses with their fingers in the pie understand our financial conditions and requirements better than we do. Most of us do things by rote. We do what we do, year in and year out, surviving by the skin of our teeth. The point though is that these businesses can’t afford to let too large a percentage of farmers and ranchers fail. I feel sure that there will be a raft of subsidies available this year, maybe hitting the 3-400 percent increase forecast by some economists this spring. The point is, we need to become very familiar with what is available to us and take advantage of every opportunity to save or make money so that we can, once again, survive by the skin of our teeth.

Horse Sense: If each day is a gift, what will we do with today?

IndianaAg@bluemarble.net