Monday, August 06, 2007

Meandering through Indiana

Last week I meandered through Indiana on a sales trip to agricultural accounts. The agriculture was pretty typical of the Midwest. Corn, corn, corn, soybeans, corn, corn, soybeans, etc. The tiny towns I went through were cute as could be with Amish clotheslines with rows of brown overalls and white shirts. At one of those towns my appointment fell through, so I thought, “what the heck, I’ll just go over to that realtor over there and tell him about Farmseller.”

Turns out he didn’t have any farm properties for sale. He was obviously upset about that. I asked why there were not properties for sale, expecting to hear something about stability. He threw a stack of papers at me and told me to look at the numbers. It was a list of farms around his area and how much money each of them got from government subsidies. Each one was between $200,000 and $500,000. So he doesn’t think people are hanging on to their properties because of the good corn prices. No, he says farmers are getting rich off of subsidies. There is still more and more consolidation of farms, so they are getting bigger and bigger. And so are the subsidies. The only farms being sold at all are small 20-acre parcels, and many of those are 1031 exchanges.

So the middle-sized farm is becoming obsolete. I heard this again from an implement manufacturer. His product was best for the middle-sized farmer. It is a good quality product and lasts a long time. The giant corporate farm doesn’t use this implement (too small) and the small lifestyle farmer buys a cheap one because they will only need to use it once.

He had other woes having to do with what’s happening to corporations as well as farms. Some of his best distributors are being bought by a Chinese company. They will surely kick out his product from the line, since they have their own. Big fish keep gobbling up the little fish. In a healthy ecosystem that situation is offset by the little fish multiplying at a faster rate – more little fish. In this case, the little fish are going extinct. No point in making more little fish if there is no incentive to exist.

Technorati tags:

No comments:

Ag in the West social media watch

Capital Press videos on YouTube

Our most popular videos