The face of agriculture has changed. In 1930, there were over 19 million
horses and mules on American farms. Now there are so few that we’ve
stopped counting them. Total manhours required, in farming have
decreased from 23 billion in 1930 to less than 7 billion today. However,
The American Farmer
Modem Inputs Replacing Farm Labor
(Editor’s note: This is the fourth
in a series of articles on
American agriculture. The series
is provided courtesy of DEKALB
Agßesearch, Inc.)
Half a century ago,
agriculture’s major inputs were
land and labor. Higher produc
tion normally brought higher
profits, and the way to higher
production meant putting more
labor to work on more land.
Now, however, land and labor
are both limited and expensive.
And, as such, they have been
overshadowed in importance by
three other inputs - capital,
management and technology.
“Extensive” farming - the
putting into production of more
GJ
output per manhour has nearly tripled in the past 20 years. The industry’s
demand for more capital, better management and the latest technology has
spawned a new generation of farmers. They are skilled professionals, better
educated and more informed than ever before.
acres - has been replaced by
“intensive” farming - getting
more production out of the acres
available. This has created the
demand for capital, management
and technology. These three
inputs hold the key to future
increases in agricultural
production.
The capital requirements of the
Lancaster Farming, Saturday, May 5.1973 —
average American farm are by
no means small. Consider that an
acre of land may cost $l,OOO or
more. Or that the cost of a new
tractor often exceeds $lO,OOO. Add
to this the thousands of dollars
needed each year to cover
operating costs - fuel, fertilizer,
etc. - and the total often reaches
several hundred thousand
dollars.
It’s obvious that most farmers
cannot by themselves take on the
job of financing their operations.
They have to turn to other
sources for credit.
According to the 1971 Fact
Book of US. Agriculture, “In
recent years, credit has been
used to finance four-fifths of all
farm sales. Federal land banks
and life insurance compames are
the largest institutional holders
of farm mortgages, with out
standing balances on January,
1971 of $7.1 billion and $5.6 billion
respectively. Commercial and
savings banks held loans of $4.4
billion.”
The American farmer is also a
heavy user of non-real estate
farm loans. He uses these mainly
to finance seasonal production
costs and living expenses. The
Fact Book reports, “In 1971,
about $12.3 billion of the non-real
estate farm debt was owed to
merchants, dealers, individuals,
and other miscellaneous lenders
and creditors. Commercial
banks, which supply the most
non-real estate credit to farmers,
held outstanding loans of $ll.l
billion.”
It’s an ironic cycle - credit is
necessary if the American far
mer is to maintain or increase his
efficiency. But because the use of
credit increases his operating
costs through interest payments,
it is even more imperative that
his operation be efficient ... to
offset the increased costs credit
brings to the operation.
Management is the second
important new input. In simple
terms, management means
making the right decision at the
right times.
Modern farming is full of
decisions. It’s more than pulling
a plow behind a tractor or
throwing a bale of hay onto a
wagon. It’s deciding when to sell,
what to buy and which way to
speculate. The decisions hold the
potential to keep a farmer in
business ... or to put him out.
They’re often lonely decisions.
(Continued On Page 8)
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