The evolution of farming is amazing, startling, crazy, and scary.
You can pick the word which best suits your view, but regardless, things on the farm have changed a lot since our forefathers first arrived on the Canadian Prairies, taking 160-acres of virgin land, and began to carve out a living for themselves and their families.
I still find it difficult how a mere 160-acres could sustain a family, especially in an era when families often hit double digits in terms of children but it did.
But the quarter section farm was a short-lived thing.
From the end of the First World War until now, farms have trended ever-larger.
The reasoning has always boiled down to the belief that with added acres comes an economy of scale.
To a point that makes sense. The cost of iron; tractors, seeders and combines, have always been significant to a farm operation, and there was a sense in trying to maximize the acres covered to in essence extend those costs over more acres.
But that reasoning has long ago maxed out, and most farms today have more than one large tractor, one combine, one seeder unit.
And still farm size grows.
Maybe nowhere, at least on the Canadian Prairies has the growth been any more significant than in the case of Broadacre Agriculture which recently requested bankruptcy protection.
Broadacre was incorporated in 2010 as a company with a mandate to purchase large tracts of land and exploit the aforementioned economies of scale.
The goal was to farm more than 200,000 acres, but had amassed only 9,000 acres of owned and 56,000 acres of leased land in Saskatchewan, when it filed for protection under the weight of some $14 million in debt.
The issue with farms of such scale is two-fold.
To begin with there is a need for new management skills that are not easily found. The sheer scale of dealing with cropping rotations, timely seeding, spraying and similar in-crop operations, mass marketings of grains, and even finding staff, change the dynamics of a farm of such size.
The second issue is cash flow.
A downturn in prices, a subpar crop, or other factors can impact any farm’s bottom line.
But the more acres and bushels involved the greater the gross dollars.
A thousand acre farm losing $50 an acre is $50,000 and while substantial to the operator is not a threatening amount to the money lender.
That same $50 loss per acre on the Broadacre $3.25 million, and a lender gets antsy. A 200,000-acre farm would be $10 million in the red.
Overcoming those two issues will be the limiting factor in terms of viable farm size.
