Farms Are Getting Bigger In The U.S. in Direct Response to Trade Wars
When Donald Trump ignited his trade wars with China last year, farmers weren’t moving their products as fast. North Dakota farmer Mike Appert at the time had a lot of soybeans to plant but not enough room to plant them.
Selling what he had wasn’t going to be an immediate problem solver. Appert said prices for soybeans were at an all time low. He looked into temporary storage places, but that he felt wouldn’t solve his problem either. North Dakota is bitterly cold in the winter, stored soybeans in plastic bags get ruined in extreme cold temperatures.
Appert at that time had over 48,000 acres of farm land. He decided to invest $800,000 so that he could build permanent steal storage bins. That way what ever product he stored in those bins, would be safe through winter and beyond. Mike could wait for prices to recover before he sold product again. He had stored 456,000 bushels in those bins, and was able to sell half of them for a $1 more per bushel. He also was able to avoid storage fees at CHS Elevators, where he previously stored products.
Most Farmers Don’t Have An Extra Million Laying Around To Build Storage Bins
Mike Appert considers himself very lucky, because he had the money to solve his space problem, He said ‘he knows lots of farmers that struggle to keep their livestock fed and the lights on’. Farmers ‘are in the fight for their lives now’.
Extreme weather events, and trade wars, have forced many farms to go under. Still other farmers have been forced to retire early and file bankruptcy. There were 12,800 less farms in 2018 with the number of farms being 2,029 million total. This is a very small number of farms operating compared to years past.
Indiana Farmer Roger Hadley has a 1000 acre farm but wasn’t able to plant corn or soybeans due to the rain showers of 2019. Hadley spent the summer planting a variety of grasses, which is called ‘cover’. His plan is to apply for federal emergency aid and try again next spring. Hadley said ‘the guys that got rich from farming, just got richer through all of this’. He believes ‘the frustration level is at an all time high’. he said.
Size Does Matter In Farming, The Ones That Survive All The Setbacks Will Be Some Of The Biggest Ever Seen Before
Very large farms have been able to survive all the setbacks facing the farming industry around the country. Apperts various operations are 100 times larger than the average American farm.
The strength and resources these farms have just by their sheer size, is mandatory in surviving another year of trade wars. The shrinking number of U.S. Farmers is spelling trouble for ancillary issues in the industry.
Grain merchants such as ADM and BGN are feeling the pinch from less demand, due to weather and people folding their farms. Silo rentals are also feeling the sting of less demand, as smaller farms disappear. Big farms like Appert’s have their own land to store product on, they don’t need to rent silos. ADM said it will change the way they do business to stay ahead of the curve, and be competitive.