Future farmer must bargain harder By JERRY WEBB University of Delaware NEWARK, Del.—lf there are a million real fanners today, how many will there be by 1980 or 2000? USDA economists are talking about no more than 200,000 far mers in less than 10 years, depending on how a farmer is defined. Gradually, small farmers are being squeezed out by inflated prices, rising costs and diminishing profits. What can a farmer do to get a handle on this cost-price critter and stay on top - a move that’s necessary if he wants to be counted as a fanner in the next census. An idea that has always fascinated me is that of strengthening one.’s bargaining power-not the union management hassle, that won’t work because farmers are both labor and management, but rather getting a better deal through smart management. There is a lot of bargaining going on among big farmers and their suppliers and buyers. No doubt a fellow who buys 10,000 gallons of fuel or $20,000 worth of fertilizer gets a better price than the smaller operator who still buys fertilizer in sacks and uses one fuel truck full of gas a year. POWER RING DRIVE Jamesway Volumatic® II silage distributor-unloader features new independent ring drive with y 2 hp. motor, has no drive drum to manhandle, no weights to adjust. For you —fewer trips up the silo, fast feeding. We also install cattle feeding, ventilating, and manure-handling systems . AGRI-EQUIP. UHDIS BROTKRS INC. M. S. VEARSIEV S SON RD2, Farmersville. Ephrata. PA 1305 Manheim Pike, Lancaster, PA 114 E. Market St. 717-354-4271 717-393-3906 West Chester. PA 19380 215-696-2990 ROY 0. CHRISTMAN ERB & HENRY EQUIP., INC. RDI (Shartlesville) Hamburg, PA 19526 22-26 Henry Avenue, New Berlinvtlle, PA umnw 1 rnnnn 215-562-7218 or 215-488-1904 215-367-2169 HAnKI L. IKUUr Rt. 1 Cochranville, PA 19330 I R't AR ?AI 215-593-6731 DEPENDABLE MOTORS Rt . 113 pa Honey Brook, PA 215-257-5135 215-273-3131 HENRY S. LAPP CARL L. SHIRK . SWOPE» BASHORE IRC RDI, Cains. Gap, PA 17527 2265 Colebrook Road, Lebanon. PA frystown, & 1 - p 717-442-8134 717-274-1436 / ‘ / Big fanners, and some who are not so big, have found ways to beat down the list price 20 to 30 per cent on many of the items of production. As one economist puts it, “...only the relatively uninformed or those without bargaining power or ability pay the posted price.” The business farmer of this decade is bargaining hard for his deals. He knows the economic conditions-what’s in, short supply, the best time to buy, and that the manufacturer or wholesaler can give a better price than a local dealer. Also, he knows that the best way to sell a crop is not one load at a time at the end of the row. Another Jtool from the business world that’s being used effectively by some of today’s farmers is the written bid. With our sophisticated communications systems and rapidtravel, a fanner is no longer tied to one dealer. He can shop around-write his specifications and ask several qualified, suppliers to bid on the order. Almost every in dustrialist operates this way, yet how many farmers bother to shop more than a couple of places before spending $40,000 for a new combine or $lO,OOO for a supply of farm chemicals? Really, the typical farmer is a pretty big buyer, spen- Lancaster Farming, Saturday. August 6.1977—101 ding anywhere from $50,000 to $200,000 a year for goods and services. It’s not all spent in one place, but it does go in rather large chunks. There’s another side to this thing. Why not two or more fanners teaming up to gain more purchasing power? Instead of two buyers, each bargaining for $lO,OOO worth of fertilizer, there’d be one buyer going for a $20,000 deal. Bring in four more fanners with equal needs and you have an order that will open the eyes of any salesman. Here’s an example that is operating for four fanners in Indiana. They found a buying corporation to gain price advantages on their production needs. Together they till 2500 acres of corn and soybeans and buy large volumes at considerable savings-5 to 10 per cent on almost everything purchased. That may not sound like much until you consider a $60,000 pesticide bill. They bought a used 10,000 gallon gas tank for $3OO and paid for it with the discount on the first 5000 gallon delivery. The corporation also buys fertilizer, seed and propane gas in bulk, getting discounts up to 15 per cent below retail. They shoot for fleet rates on machinery trades and get 10 to 20 per cent discounts on parts. Maybe there’s room in agriculture for the professional purchasing agent who knows the business of buying farm items and can get the best possible prices for farmers. He could be paid out of what he saved for the farmers and would perform a service that would be difficult for in dividual fanners to duplicate regardless of their savvy in the marketplace. A group of fanners who have similar operations could set up a corporation, elect officers and a board of direc tors and hire a purchasing agent. They would need to operate close enough together so a central delivery point could be established, and they would need to be financed well enough so bill payments and credit aren’t problems. The purchasing agent would go about establishing what to buy and how much, work out delivery problems and write up specifications for the orders. He would talk with salesmen, saving lots of time for the farmer, and bring together a wealth of knowledge on prices, delivery, discounts, credit terms and so on. Obviously, some local dealers won’t like this approach, but business is business. A farmer who’s trying to stay alive can’t always afford to deal “local” out of a sense of loyalty to the old hometown. If he does, he may find that by the next decade, he’s no longer a farmer. Group slated at Kutztown jriTTTTnwN Pn - Thp instruments, dancing, iSKV muslcS com . ed y> sin g in g’ and act from the Midwest, will muslca appear on August 16 at the anoeared at Kutztown Fair, show times The group has appearea at being 7 and 9 p.m. Their act numerous comity ana state features instrumental fenrs. national conventions, numbers using 15 different and events. SPECIAL NEW CB 600 FORAGE HARVESTER WITH 2 ROW NARROW CORN HEAD $ 6000.00 A.L. HERR and BRO. 312 PARK AVE. OUARRYVILLE, PA. 717-786-3521 Gets into your system
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