The triumph of the family farm
Most of farm country knows it already, and the rest of the world is starting to take notice: times are good down on the farm.
Surging commodity prices and booming productivity are boosting farmers’ bottom lines. That, in turn, has lead to ballooning farmland prices – which can both help and hinder farmers. U.S. farmers earned a net income of nearly $98 billion last year, according to the Food and Agricultural Policy Research Institute, an incredible sum when you think about the rough farm times in the ‘80s.
The Atlantic Magazine in a recent piece called it the Triumph of the Family Farm.
Urbanites may picture farmers as hip heritage-pig breeders returning to the land, or a struggling rural underclass waging a doomed battle to hang on to their patrimony as agribusiness moves in. But these stereotypes are misleading. In 2010, of all the farms in the United States with at least $1 million in revenues, 88 percent were family farms, and they accounted for 79 percent of production. Large-scale farmers today are sophisticated businesspeople who use GPS equipment to guide their combines, biotechnology to boost their yields, and futures contracts to hedge their risk. They are also pretty rich.
Sure, it’s hardly ever easy on the farm and there is still plenty of risk in farming. It’s hard to relax when your vocation is so dependent on both unpredictable Mother Nature and volatile global commerce. But high farmland prices have many on Wall Street running out to places like Iowa, Kansas, Minnesota and Illinois to invest in farm land, as the Atlantic’s Chrystia Freeland writes.
Jim Rogers, who co-founded the legendary hedge fund Quantum with George Soros, told me he believes farming is “one of the most exciting professions” in the world—and that the recent boom is likely to continue for a long time. “Throughout history, we’ve had long periods when the financial sectors were in charge,” he said, “but we’ve also had long periods when the people who have produced real goods were in charge—the farmers, the miners … All of you people who got M.B.A.s made mistakes, because the City of London and Wall Street are not going to be great places to be in the next two or three decades. It’s going to be the people who produce real goods.”
As recent history has shown, where there’s a boom there’s always a bust. As farmers know, though, with a growing global population there’s a growing demand for what farmers make. And growing demand for growing leads to a rosy outlook down on the farm.