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Ranch Musings: ‘Get bigger or get out.’ Really?

Farms adding value capture more revenue
Ranch Musings columnist David Zirnhelt. (File photo)

I believe it was a US Secretary of Agriculture (equivalent of Canada’s Minister of Agriculture) who said to farmers in America: “get bigger or get out.”

Later another US Secretary said “go big or go home.” Maybe he meant that if you don’t expand then you might as well stay home on the farmstead and get another job.

These words were echoed to me during my two-year stint as Minister of Agriculture, Fish and Food for B.C. in the early 1990s. The echo came for the economists working for the ministry. Globalization of trade and the export opportunities meant there were opportunities to sell abroad but that would require that our agricultural production was competitive with other regions of the world.

What has happened over the past few decades, is that the big farms got bigger, the small farms grew in numbers, and the number of medium size farms diminished. Now the producer of basic farm products takes home 14 cents of every food dollar paid by consumers.

In effect those farms adding value though further stages of production are able to capture more revenue. On the local end of things with local direct sales, local farmers are able to contribute to local food security.

On the other hand, more and more of world production of food is controlled by large private corporations, large co-operatives, or sovereign entities (Chinese government, the petroleum producing counties in the Middle East are examples).

Ranch Musings: Reconciling life on the land

Many of these entities are beyond the influence of local communities and their goals are mostly to secure farmland to benefit themselves by making a profit and/or to feed their own populations.

For example, beef exports from ranch lands owned by China in America may well go to feed a growing middle class back home.

Many of these exports are supported by government subsidies to production to keep farmers producing commodities like soy beans, canola, wheat, barley and corn, to mention a few.

Recent forecasts for global and domestic markets have painted a bright picture with process and volumes being fairly high in the face of drought and COVID.

It is the shrinking middle class of farmers who will be losing out in the global trade opportunity for commodities (raw unprocessed food products).

The European community (EU) is forecast to only allow green products into their markets: sustainably raised products not dependent on extensive chemical inputs like fertilizer, pesticides and antibiotics, for example.

However, to sell into this market, farmers will have to scale up to be able to sell multiple container loads of products because transporting product to market is expensive.

I probably have said this before: small and medium size operations can behave like a bigger entity through collaborative or co-operative organizations. This takes effort, determination, and business skills beyond basic production knowledge.

My concluding comment is this: our human resource deficit is not just in labour (including skilled labour like meat cutting) but in the entrepreneurial area (private and community).

Many of our new and existing farmers will have to take the equivalent of a Master of Business Administration in agriculture.

David Zirnhelt is a rancher and member of the Cariboo Cattlemen’s Association. He is also chair of the Advisory Committee for the Applied Sustainable Ranching Program at TRU.

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