Saturday, May 03, 2008

I don't think we'll get a pass on this one...

One reason I have been seemingly brutal when answering hopeful young farmer wannabees about how to make it in the Bigs today is the conviction we are just beginning to unleash the forces of technological productivity advances. In short, we're about to send more machines to do men's jobs. And the people we do employ may not look like typical ag college graduates.

And to do that we're going to need a profession filled with specialists: finance, management, technicians, even (gasp) public relations. [Did you note that BTO poster boy, Rick Rosentretter employs people simply to source rented acres?] These folks will earn their living with knowledge skills. And that puts us in common with the rest of the world.
The central process driving this is not globalization. It’s the skills revolution. We’re moving into a more demanding cognitive age. In order to thrive, people are compelled to become better at absorbing, processing and combining information. This is happening in localized and globalized sectors, and it would be happening even if you tore up every free trade deal ever inked.

The globalization paradigm emphasizes the fact that information can now travel 15,000 miles in an instant. But the most important part of information’s journey is the last few inches — the space between a person’s eyes or ears and the various regions of the brain. Does the individual have the capacity to understand the information? Does he or she have the training to exploit it? Are there cultural assumptions that distort the way it is perceived? [More]
We are seeing many formerly in-house tasks like machinery maintenance increasingly outsourced, finances handled by the family accountant, marketing by the hired guru - I think the list is growing. This trend can only go so far before the farmer becomes little more than a general contractor - and is entitled to only an appropriate slice of the farm profits.

The next big boost I believe will bring all these skills in-house, which will require operations large enough to employ them essentially full-time. If you want to know where the BTO's are picking up profit gains that's one big area. As vendors realize we have money to spend, their margins are expanding with their pricing power. It's good to be a machinery dealer right now, for example.

Farmers will have to stop outsourcing profit possibilities because it doesn't fit our job description. That's what David Brooks is talking about, I think - and he's talking to us too.

4 comments:

Anonymous said...

John
What did you tell your son? Are there BTO hopes in Crisman?

Doug

Anonymous said...

I woked for a farmer who farmed 6000 acres in a 150 mile radius of his home farm. the only difference between him and me (farming 600 acres) is he has bigger more complicated problems. I am perfectly happy to see these BTO's push each other out of the way to rent the last acre, they don't impress me much. I am much more impress by a a friend of mine who farms 2000 acres and owns it all.

Ol James said...

Could it be that young people are heeding the advice given to them by their folks and generations past?? "Work Smarter, Not Harder". I can't tell you how many times my dad said this to me, and his dad to him and probably your dad as well. With technology advancing day by day it seems to be a reality coming true. When you think about it, as you mentioned in a previous post, trying to explain to your son about adjusting the planter to compensate soil density and depth and the like. Now you just push a button and the planter and tractor know what to do. Before long you can do it all from a laptop at the breakfast table.
A lot of the "Ol Timers" are feeling like the wheelbarrow with the flat tire, just sitting out back of the shed a rusting away. The kids have moved off to the city and have no aspirations of returning to the dirt. Thank Goodness there are prospective young Farmers who want to do it. They may not get as dirty but they still have the dream like..Oliver Wendall Douglas of Green Acres.

Jim said...

At $100k to $900k PER ACRE, John's gross revenues on 1700 acres would be... significant. See Urban Farming But I bet that he hardly nets even half that amount, even in a good year. Maybe young farmer wannabes should go East, young man. I tried to post this before, but it ended up in the wrong place.