At the end of every year we do a thorough review of all on-farm enterprises, to figure out what is making economic sense and what isn’t. A couple of years ago, for example, I had planned to increase the size of our laying flock, because we were consistently selling out of eggs. But when we ran the numbers we found that we were losing money on eggs, so adding more hens would only have increased our loss. Obviously it wouldn’t make sense to sell at a loss. That’s like paying someone to eat your food.
The USDA is projecting that in 2016 farmers growing corn, soybeans and wheat will lose money on all three. The projected losses range from about $57/acre on corn to over $90/acre on soybeans.
So why would anyone grow a crop, knowing it won’t be profitable? If those projections are correct commodity farmers will end 2016 with less money, more debt, or both, than they began the year with. Maybe it’s because they need cash flow to service debt. Maybe it’s because subsidized crop insurance and government subsidies will erase their loss. But still, wouldn’t the sensible course of action to be to take the year off, let the land rest, maybe take a vacation?
Instead industrial agriculture will produce mountains of commodity grain that will be dumped on the world market at less than the cost of production. That’s one of the primary ways our industrial machine destroys indigenous agriculture throughout the rest of the world.
It makes no sense to encourage production at a loss, but lots of things about industrial agriculture make no sense to me.