The first time an owner of a family farm is accused of owning a “factory farm”, that farmer is quite confused. “What do you mean ‘factory farm’? I’m just a little guy in this business!” is often the farmer’s thought. However, to folks that aren’t in agriculture, this farmer’s 250 cows and 2000 acres of land looks like a kingdom. Shows like Green Acres and Little House on the Prairie have given people the idea that it only takes a few animals and a few acres to make a living. The truth is much more complex.
Let’s use the farmer in the first paragraph as our example. Let’s say this farmer is only in cattle ranching, therefore the only product the ranch makes weaned calves (That makes this much simpler to illustrate, but many farms have crops and livestock). In much of South Dakota, it takes 7 acres of pasture just to support one cow each year. Therefore, this rancher has just enough pasture to support his cows and another 250 acres to make hay, which he will feed to the cows in the winter.
As far as how much labor is needed for this family farm, the rancher will probably hire some help on occasion for one job or another, but for the most part the rancher will work alone. He or she may have help from the spouse and kids, but often one partner in the marriage farms while the other works off the farm. Quite frankly this family farm can’t afford to hire any full-time employees in this situation.
Now this is greatly simplifying the example, but I will try to illustrate how much money the rancher can hope to make in one year. Although it varies wildly from year to year depending on selling prices and the cost of inputs, the rancher will strive to make around $100 per calf each year. Assuming 95% of the cows raise a calf to selling size, this means the rancher will make $23,750 for one year’s work. A critical point is prices fluctuate, so some years this rancher might make over $100,000, and some years he might lose $50,000.
This shows why farms even three times this big are still businesses big enough for just one family. When you start taking a chunck out of that take-home pay to hire help, it takes a fairly large farm to make that work. This makes it even more difficult when a son or daughter wants to join the family farm–the farm or ranch doesn’t make enough money to pay both the parent and child.
Now these numbers are based off assumptions that the calves are sold on the commodity market. It also assumes the rancher does not keep his calves and feed them grains to fatten them to slaughter weight before selling them. That is why each farmer tailors his or her farm to what works on that farm–what works for the guy down the road or in a different state might not work here. In part II of this post (which I guess is technically another post, but whatever) I’ll talk about the reasons why everyone can’t just become a grass-fed, organic, or locally producing farmer to make small farms more profitable. They are niche markets for a reason.
Photo credits: https://preaprez.wordpress.com/2013/08/09/chicago-reporters-an-endangered-species-not-dead-yet-but-on-life-support/