Yes Virginia, There is a Future in Agriculture
Here at the Center for Rural Affairs, we're constantly asked if there really is a future for farmers in agriculture. Usually, this question comes from somebody who lives in an urban area, or a jaded activist who has lost too many battles on the policy front. The answer is simple. Yes, there is a future in agriculture. But it is not easy. Farming and ranching are a tough business. Maybe one of the toughest around, when you think of all the government policy that favors a particular type of farming that offers little opportunity for young people, especially those not in line to inherit a substantial amount of land. Then you look at the difficulty of finding health insurance, securing credit- the list goes on and on. So it ain't easy.
But you can make it work. To do so, you really need to embrace two broad themes- innovation and customer service. These aren't revolutionary, but for a long time most farmers and ranchers have grown what processors demand, not what customers actually want, and those two are diverging ever more rapidly. And don't get me started on what farm programs do to innovation. Here's an example, from today's Des Moine Register:
Vande Rose Farms, which consists of three century-old farms near Oskaloosa, ships 40,000 pounds of premium Duroc pork and Hereford beef products to California each week and twice that amount to restaurants and retailers on the East Coast.
The company expects to hit $25 million in sales this year and is banking on 15 to 20 percent growth in each of the next few years.
To help sustain and increase sales, the company is concentrating on three new initiatives:
- Opening a Vande Rose Meat and Seafood retail store in California.
- Launching online sales of its meat products.
- Creating a customer base in Malaysia, Korea, Saudi Arabia and Japan.Vande Rose Farms has hit on a hot market, said Gary Huber, food system program specialist with Practical Farmers of Iowa.
"Specialty pork products are being sought after," Huber said. "Consumers and food service workers are looking for quality products that taste good." [Full Article Here]
This sort of innovation isn't seen much in commercial-scale farming today, but it should be. Being the low-cost producer doesn't cut it anymore. This is the future.
Comments
Getting started full time.
I keep wondering if there's any hope in getting started full time. I have some 50 head of cattle now, but being and having lived in Wyoming my whole life, I'm looking at land prices getting higher and higher. It's extremely discouraging. I've long wanted to be full time in agriculture, but its beginning to seem like a pipe dream.
Any suggestions?
Full Time
Yeoman,
Well, first you have to understand you're asking a guy who sits around thinking and talking about policy all day on how to become a full time farmer and/or rancher. So I have to say that I'm probably not the best person in the world to provide suggestions. Luckily, though, I work with some people who certainly know more than I do, and please feel free to email me directly for more information- dano at cfra.org.
Additionally, www.attra.org is a great resource for sustainable agriculture and marketing information.
But I do have a few suggestions, from a sort of policy angle. You mentioned land prices. I don't think land is going to get cheaper anytime soon, which means that if land is the single largest capital investment in your expansion plan, it will be very difficult to be successful unless you're already rich. Obviously, any competitors you have who are better financed will be able to outbid you for land. On the policy side, this is something we try to address through farm program reform, but may not be as relevant in Wyoming.
So I believe the key is finding a market that you can be successful in that will minimize your land costs- and minimize the number of competitiors. It is my belief that many if not most farmers and ranchers need to figure out how to make more money on fewer acres, at least until some decent policy is enacted that stops giving the big guys a ridiculous competitive advantage. Such markets are usually referred to as a value-added or niche market. Many farmers and ranchers have had success in markets such as organics, locally grown, hormone-free, antibiotic-free, "natural", or other areas. There are a ton of labels that try to allow farmers to capitalize on those consumer preferences.
I think the biggest obstacle that many have to entering a value-added market is the lack of infrastructure. For instance, if there is not a packer within a reasonable distance of the producer that will slaughter 100% grass fed cattle and keep them separate during processing, the producer will never receive the price premium he/she deserves. So that is something that has to be assessed at a local level. I think all producers have to do some research in their area and find out if there is the infrastructure to support value-added activities. That would include direct to consumer retail outlets (farmers markets or stores that will sell your product); processing facilities, transport, etc.
For many producers in the most rural areas, direct to consumer is very hard to make profitable because of the distance from major markets and associated transport costs. Those producers will have to look into other opportunities, especially along the lines of co-ops or marketing agreements with many other producers to achieve a level of volume necessary to overcome the distance and processing barriers. Niman Ranch is an excellent example, and even they have difficulty at times. Again, I think researching the opportunities at a local/regional level is of the highest importance.
I hope this is at least somewhat helpful, and again, please feel free to email me directly- dano at cfra.org.
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