Considering the lessons of Earl Butz
Do you remember Earl Butz? I've been thinking about him lately. Butz was the Secretary of Agriculture under President Richard Nixon in the 1970s. Described in a Feb. 8, 2008, Grist article by Tom Philpott as "blustering, boisterous and often vulgar", Earl Butz was an American original, a character with a vision who — it turns out — had a pretty accurate prediction of the future of agriculture in some respects.
Earl Butz spoke his mind. His supporters found it refreshing, while his detractors found it to be occasionally objectionable. He was an Assistant Secretary of Agriculture from 1954 to 1957 under President Dwight D. Eisenhower, was Secretary of Agriculture under both Nixon (who was Eisenhower's vice president) and then President Gerald Ford from 1971-1976.
Back in the day, the farm program was more reactionary than visionary. For example, if commodity prices began to fall, the federal government would then pay American farmers to set aside land as fallow which in turn (theoretically) would reduce production, which in turn would make prices rise. As a Purdue University-trained agricultural economist, this made sense to Butz (and the rest of the federal government). And before America helped teach the rest of the world how to produce large crops quickly, that kind of policy worked.
Where Butz was visionary was in recognizing the future reality of "consolidation" in American farming. Again, as an educated and trained agricultural economist, he recognized the reality of economies of scale. At universities with agricultural economics programs — like my alma mater, North Dakota State University — the students are taught that farmers only survive if they either maximize profits or minimize loss. The concept of economies of scale is a reference to the fact that by maximizing production, a producer is also able to reduce input costs per unit (in farming, per acre).
So Earl Butz is thus credited with advising farmers to plant "from fencerow to fencerow," to maximize production and reduce cost per unit, therefore maximizing profit. He is also credited with telling farmers to "get big or get out;" a controversial phrase not just because supporters of "family farms" find it objectionable, but also because "getting big" isn't great advice for "minimizing loss" in times of lower commodity prices.
Don't believe me? Check out some of the bigger farms that are "getting out," in spite of the fact that they "got big."
So why is this even the topic of this Agweek column? Because numbers churned out by the U.S. Department of Agriculture's Census of Agriculture and the Agricultural Resource Management Survey seem to indicate that American agriculture is "getting big," or consolidating into larger farms. Stated another way, there appears to be a centralization of farm acres into fewer farms, and that is both interesting and important to certain people, such as those who eat food, which is everyone, but I digress.
In a recent Alternet.org article by James M. MacDonald and Robert A. Hoppe (https://www.alternet.org/food/consolidation-us-agriculture) these trends are illustrated in numbers and raw data. To really do justice to the numbers, one must read the USDA Economic Research Service report, "Three Decades of Consolidation in U.S. Agriculture," which is found here: https://www.ers.usda.gov/webdocs/publications/88057/eib-189.pdf?v=43172.
In a nutshell, the report illustrates that over the past 30 years, farms with less than 1,000 acres have fallen from over half of American farms to roughly a third. And farms with at least 2,000 acres have more than doubled over that same timeframe. The same trend is true for livestock operations.
Where does that leave the American farmer? Well, for one thing, bigger operations require more capital, and more operational sophistication than smaller operations. From a farm policy standpoint, it probably also requires a federal farm program that provides a "safety net" in tough years. Without that safety net, the "circle of life" for farm operations will either result in these operations being either broken down into smaller farms again or growing even bigger. Time will tell.