After completing this module, you will: - Describe the farm structure of US Production - Explain how US farms operate under federal and state frameworks to combat falling prices - Explain the concept of Farm Management Systems - Recognize the scope of technology adoption by farms

1. Selling to Farmers
e-Learning Module
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2. Learning Objectives
After completing this module, you will:
 Describe the farm structure of US Production
 Explain how US farms operate under federal
and state frameworks to combat falling prices
 Explain the concept of Farm Management
Systems
 Recognize the scope of technology adoption
by farms
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3. Topics
1 Farm Structure of U.S. Production
2 Farm Operations and Combatting Falling Prices
3 Farm Management Systems
4 Technology Adoption
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4. The Boom
The post WWII boom in US farm
productivity was driven largely by:
• consolidation of family farms
• mechanization of farming and intensive
farming
• automation of planting, harvesting and
storage
• higher crop yield achievements through
better irrigation and more powerful
fertilizers
Did you know?
By 2012, 3.2 million farmers
operated 2.1 million farms
covering 915 million acres
that generated food, fuel, and
fiber – however the number
of principal operators
declined by 4.3% from 2007
to 2012 and their average age
rose to 58 years old (according to
USDA Farm Demographics and a new 5
year survey is set for 2017).
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5. US Production
Of this farm population of 2.1m farms,
the largest farm producers control US
production although family farming
remains the industry backbone and
certified organic farming production
value is growing 25% annually but is still
just only 1% of the farm population as of
2014 (USDA). Nearly 90% of US
production value is derived from four
prominent crops:
• Corn ($52.4B)
• Soybean ($40.3B)
• Wheat ($11.9B)
• Alfalfa ($10.8B)
Source: Wikipedia from a 1921 Encyclopedia
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6. Production Diversity at Family Farms
Production is much more broadly diversified at family farms (USDA – 3/5/15):
Food equals family – 97 percent of the 2.1 million farms in the United States are
family-owned operations.
Small business matters – 88 percent of all U.S. farms are small family farms.
Local connections come in small packages – 58 percent of all direct farm sales to
consumers come from small family farms.
Big business matters too – 64 percent of all vegetable sales and 66 percent of all
dairy sales come from the 3 percent of farms that are large or very large family farms.
Farming provides new beginnings – 18 percent of principal operators on family farms
in the U.S. started within the last 10 years.
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7. Topics
1 Farm Structure of U.S. Production
2 Farm Operations and Combatting Falling Prices
3 Farm Management Systems
4 Technology Adoption
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8. Farm Operations
The farm operations of the largest
60,000 US farms are materially different
from the remaining 97% of small farms,
by necessity. Scale allows these
operators to focus on price leadership
and every aspect of their business
processes are automated, adjusted to
market conditions in real time, and
hedged with insurance protection and
Chicago Mercantile Exchange (CME)
options hedging contracts. But all US
agricultural firms operate under the
framework of Federal and State
subsidies, lending programs, and perks.
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9. Adoption of GM Crops
Large farms in the US, however, partnered with oligopoly seed & pesticide firms and
also largely dominate their shared legislative agenda to their near exclusive benefit.
Genetically modified organisms (GMOs) or crops engineered to be herbicide tolerant
(HT) or toxic to specific insects (Bt), or both, have taken over U.S. farming acreage
since their introduction in the 1990s. While recognizing the failure of small farmers to
recover from the 2007-2008 recession, the Obama Administration effectively allowed
large farms to author the 2008 Farm Bill which Senator Charles Grassley (R-Iowa)
explained, “the original intention was to help small- and mid-sized farmers get
through the difficult times. Instead, nearly 70 percent of the farm payments are
received by 10 percent of the recipients, helping inflate land prices, enticing big
producers to get bigger, and discouraging beginning farmers.” An underappreciated
aspect of this bill is that it incentivized GMO seed usage in cultivated cotton and corn
plantings, resulting in a surge towards nearly 80% GMO production like soybeans.
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10. Adoption of GM Crops
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Source: USDA Economic Research Service

11. The Farm Bill
The Agricultural Act of 2014 (“the Farm Bill”) sought to repeal of $4.5 billion in
annual direct cash payments, a long disfavored policy where farmers received a
fixed amount of money for every acre they owned, regardless of whether it was
planted or not. This bill replaced the direct cash payments with a nearly equal
amount of subsidies for crop insurance. The New Republic explained what
happened, “federally subsidized crop insurance programs pay almost two-thirds of
a farmer’s premium, as well as most of the insurance claims, guaranteeing revenue
regardless of crop failure or even price swings. The current farm bill expands the
program to cost the government $90 billion over ten years, an increase of $7
billion. But that’s just an estimate, which may be low.”
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12. Fighting Falling Prices
Small farm businesses get subsidized borrowing rates from the USDA and other
benefits. But, many of them focus on information sharing, best practices, creative
use of organics, and the introduction of new products into a culturally diverse and
vibrant US ‘direct to consumer’ agricultural products market. One diversification
program showing success is ADAPT (Ag Diversification Adds Profits Today), long
sponsored by Successful Farming magazine starting with an expenses-paid farmer
extension conference in the wake of the Farm Crisis of the 1980s where Farmer
Ralph Spiegel listed seven steps he saw as the route to follow when starting a new
farm venture.
Back NextClick the image to enlarge

13. Fighting Falling Prices
Recognize
a need or
market.
Learn
about the
product,
its uses,
and
production
.
Talk to
other
producers
about
problems,
solutions,
costs.
Secure
adequate
capital.
Be
prepared
to work.
Be
prepared
for errors.
Hope for a
bit of luck.
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14. Topics
1 Farm Structure of U.S. Production
2 Farm Operations and Combatting Falling Prices
3 Farm Management Systems
4 Technology Adoption
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15. Farm Management System
The concept of a farm management system is now widely adopted in the US
agriculture sector, even among the typical 400 acre farms run by small farmers.
Inputs from preferred suppliers are specified, including the cost of full time and
seasonal labor, and the associated costs are all mandated to be reported in the
required Schedule A tax forms required by all self employed workers. Farmers also
must file forms with the Occupational Health and Safety Administration (OSHA).
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16. Topics
1 Farm Structure of U.S. Production
2 Farm Operations and Combatting Falling Prices
3 Farm Management Systems
4 Technology Adoption
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17. Slow Adoption
The agriculture sector in the US has been slow to engage in technology adoption
due to a number of key issues. Certainly, the Federal Government regulators have
been anti-progressive about farming and have even discouraged “truth in labeling”
such as with GMOs.
State programs are widely divergent and range from being highly restrictive (i.e.
California) to meaningfully promotional (i.e. Georgia). Equipment suppliers like
John Deere have acted like prestige automakers, as the improvement of the
industrial scale systems has occurred steadily- so has the cost of these “platforms”
and the focus on selling farmers attachments and add-ons.
Finally, the prudent farm management profile has been to be risk averse given the
major uncertainties of weather, market pricing and crop-specific demand profiles.
In fact, many banks even discourage crop swapping by farmers as they extend only
enough business credit to continue pre-planned production to fit into their
existing cash flow models.
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18. Changing Times
Over the last eight years, weak national economic growth coupled with a strong
dollar has depressed crop prices and farm margins. Proposed solutions from various
parties has spanned:
• The US government has urged farmers to diversify their crop production. And
groups like ADAPT strengthened that message with assistance on niche
marketing.
• Equipment suppliers promise higher productivity from increasingly fully
automated systems and many can indeed be programmed to self-drive harvest,
self-clean, measure the volumes harvested, and even initiate product
processing.
• Agricultural Technology (AgTech) firms encourage the embrace of Internet of
Things (or IoT) to add connected devices to monitor crop condition, production,
threats and yields. Readwrite pointed out this summer that, in the next year, we
expect the cost of the devices and software to even out to the amount saved in
labor and other inputs.
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19. Human Labor vs Technology
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20. Fighting Falling Prices
AgTech entrepreneurs are already beginning to deliver advanced farm management
systems involving smart field-located fertilizing and anti-pest drones, real-time
kinematics (RTK) navigation systems, GPS-based field monitoring drones, and 24x7
automated machinery- all profiled in this PBS documentary.
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21. Knowledge Checks
The post WWII boom in US farm productivity was driven largely by
__________.
Back Select the correct option.
⃝ consolidation of family farms
⃝ mechanization of farming and intensive farming
⃝ automation of planting, harvesting and storage
⃝ higher crop yield achievements through better
irrigation and more powerful fertilizers
⃝ all of the above

22. Knowledge Checks
The post WWII boom in US farm productivity was driven largely by
__________.
Back Next
 consolidation of family farms
 mechanization of farming and intensive farming
 automation of planting, harvesting and storage
 higher crop yield achievements through better
irrigation and more powerful fertilizers

23. Knowledge Checks
To combat falling prices, many small farms focus on information sharing,
best practices, creative use of organics, and the introduction of new
products into a culturally diverse and vibrant US ‘direct to consumer’
agricultural products market.
Back Select the correct option.
⃝ True
⃝ False

24. Knowledge Checks
To combat falling prices, many small farms focus on information sharing,
best practices, creative use of organics, and the introduction of new
products into a culturally diverse and vibrant US ‘direct to consumer’
agricultural products market.
Back Next
 True

25. Knowledge Checks
What does advanced farm management systems involve?
Back
⃝ smart field-located fertilizing and anti-pest
drones
⃝ real-time kinematics (RTK) navigation systems
⃝ GPS-based field monitoring drones
⃝ 24x7 automated machinery
⃝ all of the above
Select the correct option.

26. Knowledge Checks
What does advanced farm management systems involve?
Back Next
 smart field-located fertilizing and anti-pest
drones
 real-time kinematics (RTK) navigation systems
 GPS-based field monitoring drones
 24x7 automated machinery

27. Congratulations
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