Doane Spotlight: More ‘MegaFarms’ in the future – and why
Of all the “megatrends” in U.S. agriculture, the one that has persisted with only one exception since the “peak” during the Great Depression is the trend toward larger and larger farms but fewer and fewer of them! Take a look at the chart dating back to 1850 showing the number of farms in millions. Isn’t it curious how the “first” peak developed at the very beginning of what became known as “the Roaring 20s”? World War I had ended and people were singing “Happy Days Are Here Again” as the U.S. economy sizzled on two driving engines: The industrial revolution and the fact that Europe was in rubble while the infrastructure of the U.S. was largely unscathed and ready to roar.
But as the chart shows, the Crash of ’29 led to reverse migration of the unemployed back to their roots on the farm as hard scrabble subsistence of the Dust Bowl years unfolded. It caused that brief “spike” to a record 8 million farms in 1935, but then resumed in earnest with a steep, steady slide in numbers to the early 1970s, where farm numbers stabilized and held steady for a decade during what we now look back on as “the Roaring 70s” in agricultural history.
The Vietnam war was ending, but the “guns & butter” mantra of the Lyndon Johnson era, with its “war on poverty” raised deficit-spending to virtue status.
You may notice one other “aberration” in the decades-long trend to fewer farms—the most recent Census of 2007 picked up a 4 percent increase! Could it mean farm numbers have finally bottomed at just more than 2 million, less than 1 percent of the U.S. population? Or will it prove to be just another “blip”? Demographers and historians of U.S. agriculture think it may mark a low, tied to three realities:
- The need for generational turnover of America’s farms by retiring baby boomers; where the average age of today’s farmer is pushing 60! Think about that. If the average age is 60, there has to be a substantial number of farmers well past retirement age.
- The fact that crop farming has become very lucrative with grain prices launching to yet another “new era” of price levels in 2007-08, rising land values and rising net worth; this one was also fueled by soaring demand and easy money at record low interest rates.
- With the urban economy in the U.S. still sputtering, many younger folks with farm backgrounds may suddenly “discover” they want to farm after all, but lack the necessary backing unless parents finance the purchase—and divide larger farms among two or three sons or daughters as “starter farms.”
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