John Phipps: Will Farm Consolidation Consume U.S. Agriculture?

September 23, 2017 08:00 AM

The Des Moines Register was the latest publication to put out an article warning of a decline in the number of mid-sized farms. It is hard to argue with their analysis except we’ve heard it too many times before. The often-prophesized consolidation of farms into gigantic operations has been a standard prediction in farm magazines for my entire career. And it’s always just around the corner.

To be fair, farms like mine have gotten bigger, but not as fast as we have perpetually forecast. Compared to other sectors, such as pork or poultry, grain farming is taking its sweet time getting huge. You can read more details on my thoughts in the latest Top Producer magazine, but I’ll skip to the bottom line today.

Grain farms reflect farmland ownership, more than farm economics. It’s really hard to operate huge farms in the absence of huge landholdings. We had a recent example. A landowner with a modest farm dies, and being without children, she leaves her acreage to 5 nephews. It took extraordinary effort from the one nephew who was farming the land to buy out or rent the other four shares. This disaggregation occurs constantly across farm country. Most grain farm acres are rented, not owned. When owners change, the operator often changes too. So not only does ownership fracture, tenancy is up for grabs. Also, my impression is big operations don’t have longer lifespans than smaller farms either. Big Time Operators come and go.

Listen to John's final thoughts in this week's John's World. 

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Spell Check

Grand Ledge , MI
9/24/2017 07:48 AM

  Those who pee hard don't pee for long. Boreson farms, $150,000,000 belly up in 2017, stamp farms $58,000,000 in 2014. This is just in Michigan. Bigger they are, harder they fall. Mid sized farms are manageable. The ability to manage your fields is important to good stuartship. Being a good farmer lies in crop management. Even the biggest checkbooks dry up when the land is too vast to manage.

Memphis, TN
9/25/2017 08:41 AM

  Add in the labor issue and you know why so many large operations stumble eventually. Roundup ready made farming large tracts possible for what was then medium size operators. Now Spray and forget until harvest isn't working anymore. Plus it has helped indirectly to empty out the countryside of residents since labor wasn't needed like it was in the past.

Lincoln, NE
9/25/2017 09:50 PM

  Corporate farming is coming. There is absolutely no insentive for a young person to farm.Corporate farming will control the market some day and the price of food will go up. Can't wait to get rid of my 5,000 acer farm, tired of spinning my wheels.