Week 4 - Everything I Needed to Know About The History of the American Farmer

I don't know if you have thought much about this, I know I haven't until recently, but have you ever wondered how we can always go to a grocery store in America and find almost any fruit, vegetable or grain we're looking for?

Sure, if it's off-season, they might not be as ripe or juicy, but you can usually still find that pomegranate in April.

So, I want to dedicate this week's post to learning about the history of the American farmer. And just to clarify, I know that a ton of the food we find in grocery stores isn't even grown in America, but the idea remains the same. People are constantly growing food, but are they being rewarded and or compensated for feeding nations?

I am using this post to understand what it really takes to be a farmer, the economic benefit (or sacrifice) it entails, and how farming has changed and adapted over the decades.

Also, I'm going to be bringing up GMO's in this post, which I know can be a controversial topic. Just a reminder that I am just summarizing what I learned in specific articles and am not taking a stance on either side.

Before we dive into all the intricacies of farming, let's take a bird's eye view and get some basic data that was collected in the 2012 Census.

Farming Population

In 2012, "3.2 million farmers operated 2.1 million farms covering 915 million acres that generated food, fuel, and fiber for Americans and people around the world."

To put all these numbers into perspective, those 3.2 million farmers were about 1% of the American population and were working around 48% of all farmable land in America. In case you're curious where I got those numbers, I just divided the census information by the American population in 2012 (314 million) and how much farmable land America has (1.9 billion acres). Again, the census isn't 100% accurate but it's at least a place to start.

So, we have around 1% of the American population using almost half of all farmable land in America. Not only is that crazy to think about, but it's also a huge responsibility, both to the American people (and the world) and to the environment.

For those who have an eye for data, you might have noticed that the number of farmers doesn't match the number of farms. This is because there aren't 3.2 million principal farmers, the person who is primarily in charge of the day-to-day operations of the farm. To break down to farming population even further, there are 2.1 million principal farmers, 928k secondary farmers, and 142.5k tertiary farmers. And when it comes to secondary farmers, 90% of them were the wives of the principal farmer.

In general, though, there was a 4% decrease in the farming population since 2007, most likely due to younger adults going to college and pursuing careers in more lucrative and industrial sectors.

Lack of Women

Not even the farming industry has been able to escape this one.

Around 14% of principal farmers were women, or 30% if you counted secondary and tertiary. This 14% counts out to be 288k female farmers, which is a 6% decrease from 2007. So, as you can probably see, there is an overall decrease in the farming population, both in numbers and gender diversity. Based on this census data, however, it is worth noting that there are large percentages of female farmers in Arizona, Oregon, Washington and New England.

An Aging Population

Not only is the farming population decreasing, but it is also getting older.

In 2012, the average age of the principle farmer was 58 and some change. Thirty years ago, the average age was a little over 50. While you might not think that an eight-year change is big, farming is a lot of manual work and an aging population is just physically less capable, in general of course.

Racial Diversity

Even though numbers were down when it came to the population of female farmers, they are up when it comes to racial minority farmers. For example, there was a 21% increase since 2007 in Hispanic-operated farms. Even though there has been an increase in minority-operated farms, including American Indian, Black and Asian, over half of these farms make less than $10,000 in sales each year.

Also, one statistic that caught my eye was this: only 70% of farms had internet access. Chew on that one for a bit.

Holding Back the Tide of New Farmers

Actually, the only tide that is being held back is that pod that your kid is trying to put in their mouth.

When it comes to new farmers and all those gearing to get into the business, there has been a decrease in new farmers. This should come as no surprise, but again, let's look at some numbers.

In 2012, there were 469k farmers who had been on their farm for less than ten years. That is 20% less than when it was last recorded in 2007.

And when it comes to the number of farmers who had been on their farm for less than five years, there was 23% decrease since 2007, coming in at 171.5k principal farmers.

Overall, fewer farmers are joining the ranks each year, and with the population aging, we are going to have an issue on our hands before we know it. Who knows, maybe by that time, we'll have machines automating every aspect of the farming industry and won't need to worry about human farmers anymore.

Go to Table of Contents

When it comes down to the mula, becoming a farmer from scratch is no small number. While most farms are family owned and/or operated, at least according to the agriculture census of 2012, this just means the barrier to entry is extremely high just from a financial perspective.

In this article, the author Shawn Williamson, is assuming that you are a young entrepreneur who has no farming experience and no family farm to begin with. So, when you start at rock bottom, how much does it cost to get to the top?

Education

Well, let's start with an education before we get into the cost of land, equipment, and crops.

For your education, you probably are looking to get an agriculture degree. Assuming you go to school in-state, that will cost you, on average $20k per year or 80k for your four-year degree.

While you'll probably have to take out some loans just to get the degree, it can help in the future when you're talking with investors and trying to take out more loans to buy land or equipment and have a degree to back you up.

Equipment and Tools

When it comes to equipment, you'll be doling out the big bucks, even for some used stuff. For example, this article brought up the following vehicles and tools you would use as a grain farmer:

• a combine with corn head and grain platform for $175k

• a big tractor for plowing and planting at $125K

• a grain truck for $60K

• a planter that runs about $75K

• a grain drill for $40K

• a disk at around $30K

• a chisel-plow for $30K

• a field cultivator at $25K

• a pull-type sprayer costs $35K

• a grain dryer is $30K

• a utility tractor for brush-hogging/ditching/grading at $35K

• a grain cart for $15K

• a trailer at around $15K

• an ATV for $10K

• and a full complement of tools for $15K

Put down your calculator. The total cost just for equipment would ring up at $715k. So, if you had to take out loans for your $80k degree, you'll be taking out a lot more for the equipment. You need all this equipment to cultivate enough land to just break even.

Land and Storage

Oh, and where are you going to store all your crops? You'll need to buy some buildings too, which could add an extra $275k to your bill. And you'll need a lot of land, both owned and leased to make a profit, let's say 1,500 acres with each acre costing $7.5k. For the sake of budget, let's just say that you buy 500 acres and lease the rest. That'll still cost you $3.75 million. So, you've reached the point where you have the education, you have the equipment, and you now have the land to begin planting, and it's only cost you $4.8 million!

Crops and Planting

When it comes to planting, the article kept it simple by just using a corn and bean farm. "To plant, fertilize, and spray 750 acres of beans and 750 acres of corn right now will cost you about $140 an acre for beans and $290 an acre for corn – $322,500 in total. To survive for six months until harvest will cost at least $25,000."

Conclusion

And our grand total is $5,157,500! Of course, this price tag can vary wildly but it is a decent reminder of how much it costs to farm and why less young people are making it a career, at least when it comes to large-scale farming.

For most, corporate farms are becoming the norm (i.e. Monsanto) and not succumbing to them usually ends in lawsuits or settlements.

Go to Table of Contents

Farming is a unique industry because food will always be needed, the with the demand always being people eating enough to survive. But because it depends on nature, i.e. floods, droughts, fires, earthquakes, any natural disaster, the supply can vary wildly.

America, like most countries, gives money to farmers to both increase yield and keep prices low and stable. Whenever there is a disaster, there will hopefully be enough food grown in other areas to offset the lack in the affected areas.

America also grows almost ⅓ of all corn on the planet, not because it's the healthiest and most desired crop, but because it is heavily subsidized by the government. Since it can withstand some damage, produce a lot, and be used both as food and fuel, the U.S. government gives a lot of money to farmers that just crow corn. This is all because it has special properties when it comes to photosynthesis, as in it just absorbs nutrients from the environment much more efficiently than a majority of other crops, especially vegetables.

Farming B.S. (Before Subsidies)

In the 1800's and through the early 1900's, American farmers were able to grow a LOT of corn, at times. As the west was being settled, farmers were able to grab large swathes of land and plant corn to their heart's content. This abundant planting and cultivating of corn caused two issues, however:

1. Whiskey production skyrocketed since they didn't know what to do with all the leftover corn.

2. Prices plummeted

This came to a head in the 1930's because even though the prices were so low, consumers couldn't afford anything due to economic destruction of the Great Depression and Dust Bowl.

Farming A.S. (After Subsidies)

To remedy the agricultural disaster it was in, the United States, led by Franklin D. Roosevelt, instituted the Agricultural Adjustment Act of 1933. This act essentially rewarded farmers who left certain parts of their farm unplanted. The idea was that by planting fewer crops and rewarding those who followed the act, prices would rise and land would stay healthy longer. Over the following decades, different policies and systems were created to give money to farmers in order to maintain production.

Crop Insurance

In 2014, Congress passed a $965 billion bill that will last 10 years. In it, they allocated around $90 billion to crop insurance, which basically works like it sounds. In cases where farmers lose crops due to some disaster, they would be insured and recoup their losses.

How does this affect farming? Well, you can look at it a few ways:

1. Large-scale farmers don't see much need to plan against natural disaster deterrents or plans and might have less drive to innovate their crops or methods.

2. Diversified, mixed-crop and organic farms now have their crop insured.

While this all sounds great, at least the second point, it only works when the subsidies are given to those who need them or will use them in the best way. According to an article on The Hill, "the largest 15 percent of farm operations and the richest farmers and landowners, with incomes and wealth that are many times the national average, receive over 85 percent of all farm subsidies." So, while there is a lot of money available to farmers, the rich tend to get most of it. America!

Go to Table of Contents

What happens to chemical companies that used to produce weapons once the war is over? They turn to agriculture of course! And while it always hasn't been this way, once the big chemical companies started profiting off of their pesticide sales, there was no going back, especially since "going back" means to start spraying arsenic on crops.

But let's take a step back.

The Beginning of Chemical Crops

Using chemicals to protect or aid crop growth is not some new invention or idea. We've been doing that for thousands of years, though the degree to which we use and change those chemicals has increased dramatically.

According to this article, the real catalyst for the modern pesticides we have now is through the research of Paul Müller, a Swedish entomologist (studies bugs). Through his research, he discovered a highly effective way to kill insects, using a chemical compound called dichlorodiphenyltrichloroethane (DDT) in 1939.

Due to this compound's highly effective usage, America bought into the idea of using it to protect all their crops and livestock and the benefits that chemicals bring to the farming sector. Just make sure you don't feed your cows hay that has DDT on it, or else it'll seep into the milk. Delicious.

Side note: before DDT was used to kill crop-destroying insects, it was used by the military to prevent louse-borne typhus. Again, swinging back around to the relationship between war and chemical farming.

The 1940's saw increased marketing campaigns for DDT, basically saying that it was the best thing since sliced bread and that it was the "benefactor of all humanity". And as DDT became more popularized and accepted, other companies, both pharmaceutical and chemical turned to the agriculture industry.

• Penicillin producers would turn to antibiotics for livestock

• Napalm bomb manufacturers would turn towards pesticide production

Then, as World War 2 began to favor the Allies, some of the German research secrets in chemical warfare came to light. This research led to the development of some of the most potent pesticides, like parathion and malathion.

The best thing was that people knew that these chemicals were toxic. Should be fairly obvious since they're made to literally kill bugs. The problem was that nobody knew how it was affecting "bio-accumulation in humans, development of birth defects, creation of algal blooms in the oceans, and destruction of the stratospheric ozone layer" and wouldn't even be discovered for another decade.

People were so happy though that plants were growing so well that they almost didn't care or want to think about what was happening at the chemical level. This could have been because there was just a blind faith in science, or fear of searching for truth. At least now we're starting to really look at what's happening.

Go to Table of Contents

The GMO vs. Organic debate has been raging for as far back as I can remember. For those who don't know about this issue, the sides that are being taken are as follows:

Pro-GM: "We need to produce GM food to feed the growing population of Earth and keep it healthy. Also, they are completely safe to eat."

Anti-GM: "GM foods could have potential long-term health effects and messing with nature is going to cause trouble. There isn't enough research to definitively say that GM-foods are safe to eat."

The issue is that both sides are pretty dug in and finding the middle ground is going to be difficult. Let's look at both sides as explained by this article though and see what the middle ground turns out to be.

Pro-GM Foods

Even though many scientists, backed by wealthy chemical corporations, state that there is no actual evidence that GM-foods are unsafe to consume, many parts of the world reject them completely, even in times of famine. But even with the theoretical dangers that GM-foods bring to the table, the benefits are considered worth it. These benefits include:

• More vitamin enriched foods

• Higher yields

• Lower prices

• Less need for pesticides

As people live longer and have easier access to medicine, the population shows no signs of slowing. By 2050, we will have almost 10 billion people on the planet to feed. Not only will we need to grow more food, but we will have to do it using less farmable land.

For the planet to survive, and thus us too, we need innovations in the agriculture sector, both in growing healthier and more abundant food, and just finding new ways to do it, like vertical farming and aquaponics.

Also, humans have been genetically modifying crops for thousands of years. It's just that now we're able to insert certain genes across species with precision. And if you didn't already know, basically all corn and soy grown in the United States is genetically modified.

The U.S. historically has been more accepting of GM-food, whereas European countries, and thus many African countries who follow their lead, work to ban or dissuade consumers from purchasing GM-foods.

GM-foods carry with them a stigma of unsafe and dangerous, and even when you can use them to feed a country plagued with malnutrition, that stigma ruins any chance of getting that food to people who need it to survive.

Anti-GM Foods

When it comes to fighting against GM-foods, the argument basically boils down to this (don't you love blanket statements?): there is not enough evidence or research to prove that consuming GM-foods doesn't have any long-term health risks and that inserting a specific gene into a crop could produce toxic proteins in future generations.

With so much of our food being genetically modified to some degree, there just hasn't been enough in-depth and long-term studies done to verify that they are safe. But they will never be proven to be 100% safe, just like everything else in life.

It also breaks down into realizing that while GM-related incidents might have already happened, but we just haven't noticed it yet or can't differentiate the problem from the thousands of other environmental factors that could cause some health problem.

One specific experiment done against GM-foods was conducted by a French molecular biologist, Gilles-Éric Séralini, and found that after feeding GM-foods to rats for two years that they developed tumors and an accelerated rate. While this experiment was heavily criticized for being biased against GM-foods, by using rats that are known to develop tumors quickly and just using a small sample size, it did receive support by man scientists and caused a ban of GM-foods in Europe.

In the end though, if a scientist publishes something either directly or indirectly stating the dangers of consuming genetically modified foods, they are more often than not met with heavy backlash and criticism. Many scientists might not publish their findings out of fear of that backlash or the slashing of funds to their research.

The Middle Ground

Luckily enough, there is some hope for the future. All the peacemakers of the GM world are seeking a middle ground where we continue to introduce and grow GM-foods but do it after extensive research. One suggestion is to test GM-foods using the same practices that the FDA uses for new drugs.

While increasing testing would take longer for new and improved crops to be introduced to the public, it would come under the banner of being thoroughly tested and approved. By having more long-term and unbiased research backing it, it could help countries who are suffering from malnutrition to not burn the GM-foods they are currently receiving.

Go to Table of Contents

When it comes to understanding the farming landscape, there are 10 trends that you need to understand.

1. Lower Land Prices ≠ a Crashing Market

Even though land prices are declining, they are not dropping as fast as people expected. This is most likely due to the stabilization of commodity prices, which are adding a more solid foundation to those land values.

2. There is Not a Mass Selling of Farmland

While some farmers are selling land, it is mostly to just accommodate for declines in "working capital". They are looking for a way to adjust their balance sheets (a fancy accounting term) but aren't selling off large chunks of their land.

3. The 1980's isn't Repeating Itself

Some quick background information: the 1980's farming crisis was a point in history where interest rates rose from an average of 6.8% to 21.5%. Obviously, this had massive repercussions on the farming community who generally had to borrow money to pay for almost everything. This caused a massive decline in rural farming since many farms defaulted and families moved to work in other industries.

Don't fret though, since interest rates are not spiking to the levels that we saw in the 80's and we now have certain safety nets that will (hopefully) prevent that from happening again.

4. Low Crop Prices ≠ Land Crashing

Basically, a repeat of number one, but basically even if crop prices remain low, there won't be much change unless you and farms around you all run out of money.

5. Farmers are Buying Land

Even though more funds/outside investors are buying land, farmers remain the top buyers and owners.

6. Big Data, Big Impact

As technology gives us easier and more accurate access to information, farmers can use it to understand their land better and purchase more. From soil nutrients to a land-purchasing application, large amounts of data are making a big impact.

7. Government Influencing Prices

When it comes to money from the government, farmers can also receive extra payments if they are enrolled in the Conservation Reserve Program (CRP). Farmers enrolled in this program essentially block off environmentally sensitive portions of their land and only grow plants that will help improve environmental health and quality. With this program, certain portions of land are more optimal for CRP while others have no chance.

8. Importance of Soil Health

You could have all the acreage in the world, but if the soil is dead, you just have a pile of dirt. Farmers need to focus on soil health if they want to maintain or improve the value of their land. Following best practices when it comes to conservation, management, water and nutrient interplay, and stewardship will pay off in the end.

9. Land Value can be Ambiguous

The reason why land in one county is valued higher than the neighboring country could be for a variety of reasons. Finding the exact reason for why land values change is an art, not a science.

10. The Next Farm Bill

The agriculture sector is not immune from the bills of Congress. While it might not get as much attention as health care or the military, certain legislation might pass that will heavily affect the farming community. Elements like crop insurance and conservation are sure to remain key parts.

Go to Table of Contents

According to the Agriculture Census of 2012, the farming population is consistently getting older and smaller. While the female population has decreased, it has grown when it comes to racial minorities.

When it comes to starting your own farm from scratch, assuming you just plan on planting grains, you'll be shelling out over $5 million. Obviously, this isn't a low-barrier to entry for rising generations, hence the lack of young, traditional farmers.

For those who didn't know, farming operations are heavily subsidized by the United States government. This began as the solution to fight inflation and to prevent more economic disasters. The government also eventually came out with crop insurance, which helps farmers recover loses in times of natural disasters.

Humans have been using chemicals to aid and/or protect crops for thousands of years. It came to a headway in 1939 when a chemical called DDT was found to kill harmful insects. It quickly became the standard for pesticides, and chemical and weapon companies turned to making pesticides soon after.

Closely related to the use of pesticides is the integration of genetically modified organisms (GMOs). While we have also been genetically modifying plants for thousands of years, modern science has allowed us to do it at a much more specific and accurate level. While supporters of GM-foods argue that they are the only way to feed the growing population, opponents believe that there isn't enough long-term research to deem GM-food safe to eat.

Go to Table of Contents