This is why so many farms are not making it, and why we need alternative
farming systems that can survive without constantly getting bigger (while
driving others out of business).
Richard Olson
At 03:40 PM 8/24/98 -0400, you wrote:
>In a recent posting, Richard Olson wrote:
>
> "Also, the $80,000 is for gross sales. Given the 80% overhead
>typical for
>farms and ranches, that translates into $16,000 net income -- not a
>large
>amount."
>
>This is off the subject of Oregon land use laws, but I was shocked to
>hear the average overhead for American farms and ranches. The reverse is
>true for me. I pay out about 25% of gross farm sales and retain about
>75%. (That 25% includes buying hand tools which are listed on schedule F
>as repair costs since the IRS must consider their life only one year. I
>buy quality tools and use them for decades.)
>
>I don't know what the figures are for overhead in other small
>businesses, but I bet it's lower than 80%. I 'm having a hard time
>figuring out how most farms and ranches can operate. This must be the
>rationale for the "get big or get out" myth that's been repeated now for
>the last few decades. I say (along with Gene Logsdon) "get small or get
>out."
>
>If you're losing money or barely getting by, it doesn't make sense to me
>to borrow money to do either of these on a larger scale. It reminds me
>of the 2 guys who decided to sell watermelons. They bought a truck and a
>truckload of melons for a dollar apiece and sold them for a dollar
>apiece. After the first day, they counted their money and had the same
>amount they started with. While trying to figure out what to do, one of
>them said, "We need to buy a larger truck."
>
>Alex McGregor
>Walden Farm
>High atop Walden Ridge
>
>
Richard Olson
Center for Sustainable Agricultural Systems
225 Keim Hall
University of Nebraska
Lincoln NE 68583-0949
Phone: 402-472-0917
Fax: 402-472-4104
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