Friday, March 7, 2014

"living wage" and farm dreams and production

I think that everyone who thinks about farming has a vision of what their perfect farm will be.  Sometimes they can say what it is, describe it, other times they can't, but a common element in a lot of farm dreams that I've heard from people relates to economics.

I think that the majority of people who consider "going back to the country" and living on a farm would prefer, in that perfect vision, to have some sort of product or crop that they can produce that will actually allow them to spend most of the time on their farm, and for some.

This is a pretty powerful vision, and it's actually pretty hard to convey how important it is to some that they reach this goal.  I think that this basic desire on the part of farmers is why things like pigeon king international happen - farmers and people who want to farm seeking a crop of any sort that will allow them to live on their land and make a good living.

This isn't a new thing -- here's a farm boom and bust story from the 1830s in cartoon form.

The biggest questions that you see on blogs are ones that talk about how to figure out profit margins, how to price what you're selling, and even how to price yourself.

It works like this:  in my regular job I got paid $XX per hour.  So on the farm, I should be worth at least that.

No, no one ever says it out loud like that, but it's really there.  I am the same person, so I must be worth the same amount of money in my new enterprise.  And they go about seeing if they can reconcile the two views.

Oftentimes they look at the very low production on the farm, and try to make a wage that way.   "lets see... if I need $10,000, and I sell 10 pigs, I'll need to get $1,000 per pig profit".   Well, again, they're usually not that silly, but I think you get what I'm saying.

So here's the basics as I see them:

1)  You have to have a decent amount of production of whatever it is you're farming for it to make any sense at all.  If you could get a million bucks a pig, you'd only have to sell 1 pig every 20 years, right?

2)  Your time is worth what you could hire someone to do it for, and farm labor is pretty darn cheap.  So if you don't like the wage at what you're doing, promote yourself and hire someone else to do that part.  Not making enough to hire a replacement?  Rethink your farm.

3) People may not be willing to pay much, or at all, for what you really want to do.  Doing something and hoping that customers appear is pretty much opposite of what most people do.  It's a happy time when you find something you like and that people will buy, but most farmers I know have stuff that they don't like doing as the cost of business.  Agritourism, for instance.  Heck, if I wanted a job as a tour guide I'd get one.

4)  Your experience in another industry probably won't be 100% transferrable to  your new one.  So even though you had a great time making widgets, when you start farming, or switch to a new area of farming, you're at the bottom end of a brand-new learning curve.  Please don't write a book about your first 6 months of farming.  How about you farm for 5 years, and THEN write about your first six months.

1 comment:

Jeff said...

I wasn't aware of the PKI story. That's insane. Breeding schemes can be tempting, but they are all variations on the ponzi scheme (although usually they aren't anywhere near as well organized).

Part of the learning curve is learning the importance of recognizing the quantities one needs to move to make significant profit. All farming, but animal production especially, is really just about handling and moving materials--but unlike iron ore, animal and plant materials can get sick and die.