What one farmer learned from surviving the ’80s farm crisis

Grist

Some basic economic forces are driving mid-sized farms out of existence. First, food prices keep falling. “Ever since World War II, agricultural commodities have trended steadily down,” agricultural economist Otto Doering told me. We are on a technology treadmill: Farmers get a new tech (like hybrid seeds), increase productivity, and make money. But then all the farmers get it, they all produce more, and prices drop, Doering said. Those new technologies cost money, so farm costs go up while food prices fall, leaving farmers with smaller and smaller profit from every bushel they harvest.

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Farmers can either buy land and get bigger, drop out, or get an off-farm job to supplement their income. Forty years ago, when Doering came to Purdue University, 800 to 1,000 acres could give a farmer in Indiana a good middle-class income. Now, it takes 2,000 to 3,000 acres to support a commodity farmer, he said.

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