About Me

My photo
As an Agriculture Extension Agent for Texas AgriLife Extension Service I have had an opportunity to be involved in just about every aspect of agriculture. From the 5,000 cow dairy to the types of trees to use in a home landscape I have had a chance to learn how the different parts of an agriculture systems work together. Seedless watermelons, drip irrigation, pecan orchard management, fruit crop development, dairy nutrient management, environmental issues confronting agriculture, producer tours, field days, research projects and more have been a part of my life for over 30 years as I lived and breathed agriculture. Since 2004 I have been actively involved in consulting internationally working in Honduras, Guatemala, Egypt, Jordan, Iraq, India, and China. I have worked with missionaries and other groups dedicated to alleviating poverty among third world farmers. I lived in the Middle East in 2007-2008 working on a project for the Borlaug Institute of International Agriculture at Texas A&M University. In this project I was the Chief of Party and Team Leader for a $5.7 Million dollar effort to train Iraqi Extension agents and specialists in all aspects of agriculture.

Monday, March 1, 2010

What Do Things Cost?

I ran onto this article from Bob Sakata, who is the National Onion Association President and I enjoyed it so much I want to share some of the details with you and let you make some comparisons on what things cost now versus 50 years ago.
A 40 hp IHM cost $2,400 50 years ago or $60 per hp. Today a 40 hp John Deere costs about $46,000 or $1,150 per hp. The multiplier would be 19 or 19 times $1,150 equals $46,000. Minimum wage was 30 cents per hour 50 years ago and today it is $5.15 and moving higher. The multiplier would be 17. A pickup truck 50 years ago was $750, today $12,000 or even higher with a multiplier of 22. Onion seed $4.50 per pound, today $100 and the multiplier would be 22. Land was $200 per acre while today good land for onions would be $4,000. The multiplier would be 20. 50 years ago a bag of onions was 75¢ per bag. Take the multiplier of say 19 times 75¢ that would equal $14.25 per bag at today’s prices and unfortunately for onion producers they are not anywhere near that price.
Okay that sounds well and good but we don’t grow onions around here. What about the crops we grow. I just happen to have a book called Texas Historical Crops Statistics and it has prices back to 1909 on many crops but I will just use 1950's data to get close to onions.
In 1950 corn brought $1.26 per bushel and that times 19 would equal $23.94. Hay in 1950 brought $21.70 per ton which would equal $412 per ton today. Peanuts brought $206 per ton in 1950 times 19 would equal $3,914 today. Pecans were 26¢ a pound in 1950 and today they should bring $4.94 a pound but they only bring $2. Wheat was $1.96 per bushel fifty years ago and today it should bring $37.24/bu.
Now I know that this theory can be shot full of holes because things are different now, farmers are more efficient. Every time a new more efficient variety or machine or practice came along farmers implemented it and as a result they made more crops or had better livestock. This in turn produced more “units” so that the price went down. Farmers have in essence produced more than we need and the government has promoted a policy of cheap food. All these new innovations have caused farmers to get bigger and bigger until we now have less than 1% of our population involved in full time agriculture. Along with this increase in size and decrease in numbers, we have folks who want to shut down the “factory farm” which is what they call these large, efficient farms. The very thing that drove farmers to be larger (the drop in the cost of onions or wheat or hay or milk to the consumer) is the thing none of the consumers could stand to see change. How much would bread cost if wheat was $37 per bushel versus $3.
Bob Sakata puts it best when he says “the major concern today is whether additional efficiencies can be found in agriculture to offset continuing cost or expense increases.” He worries that agriculture may have reached the “road of no return”, since increased efficiency is harder and harder to come by.
Well let me finish by saying that Bob Sakata may have put in print what you can hear from any farmer in this county. Just stop one and ask and then be prepared to stay awhile.

No comments: