Tending to the Farm, Part 1: Farther Out of Sight and Smaller, Agriculture Remains a Major Regional Force
Despite popular wisdom, family farms aren't disappearing. Small farms outnumber large corporate operations, but these days the big money is in big farms.
Yet agriculture is a complex business. Consider something as seemingly straightforward as commodity prices. High prices are generally good for farmers. In the past couple of years, corn prices have plummeted some 40 percent—bad news for corn farmers. On the flip side, cheaper corn means big savings for livestock growers because the crop is the main ingredient in their animal feed. For example, at Fieldale Farms Corporation of Baldwin, Georgia, corn and soybeans constitute half of total annual expenses, or roughly $300 million to $400 million a year, says Fieldale president Tom Hensley.
So generalizations about a business as layered as agriculture are tricky. But the following slideshow provides a few basic points about today's farming industry.
Although agriculture has shrunk dramatically as a source of employment and a share of the economy, it remains a formidable business. Farm revenues in 2015 totaled nearly $40 billion in the Southeast and more than $400 billion nationally, according to the U.S. Department of Agriculture. The nation's farms generated more revenue last year than the U.S. passenger airline industry and nearly as much as Google, Microsoft, Apple, and IBM combined.
Agriculture still has a big footprint—though smaller than it had in years past. As the Southeast's population almost tripled since 1950, development gobbled up swaths of farmland. The region's land in farms has dwindled from a peak of 114 million acres in the early 1950s—an expanse bigger than Florida, Georgia, and Alabama combined—to roughly 58 million acres today, still an area bigger than Georgia.
The notion of the disappearing family farm doesn't square with the data. Although the number of farms has steadily declined, roughly 99 percent are still owned by families. They may be family partnerships or corporations, but family operations still predominate. What's more, farm families in 2014 had average incomes of $132,000, which is more than twice the nation's median household income. But the average income from farming alone was just $29,000, with the rest coming from off-farm sources. The bigger the farm, on average, the bigger the income.
Farming is a volatile business. Since 1929, the most profitable year nationally and in the Southeast was 1973, as trade agreements with Russia and China opened new global markets and exports surged. Times had been good again until the past couple of years. Inflation-adjusted average annual farm income from 2010 to 2014 was stronger than in any full decade since the 1940s. But income fell in each of the past two years and will fall again in 2016, according to U.S. Department of Agriculture and other projections.
Photograph by the United States Department of Agriculture
Agriculture always has been shaped by global economic and technological forces. Dramatic improvements in farm productivity resulted from the invention of the cotton gin in the 1790s, widespread mechanization after World War II, and more recently the adoption of advanced seed hybrids and "precision ag" equipment like satellite-guided driverless tractors. Growers face intense pressure to lower costs as commodity prices are determined by worldwide supply and demand.
Since the early 20th century, overseas sales have been critical. "Surging exports spurred rising farm incomes, while plummeting export activity weighed heavily on farm incomes," says a 2011 Kansas City Fed Economic Review article by Kansas City Fed economist Jason Henderson and Purdue University agricultural economists Brent Gloy and Michael Boehlje.
Economic pressures have largely doomed the yeoman farmer who eked out a living from the land. As economies of scale became paramount, the number of American farms declined while average farm size grew. Yet most farms are still small. In the Southeast, two-thirds of farms—nearly 175,000 of them—generate less than $10,000 a year in sales and government payments. Those small growers earn most of their income from jobs off the farm. A relatively few big farms make most of the money in agriculture.
Photograph by the Farm Security Administration, courtesy of the Library of Congress photographic archives
As cotton planting took hold after the invention of the cotton gin, the South became a vital cog in trans-Atlantic trade. Between 1815 and 1860, cotton accounted for more than half of all U.S. exports, according to Empire of Cotton: A Global History, a 2014 book by Harvard historian Sven Beckert. Much of the crop went to textile mills in England. As the Civil War disrupted the cotton trade, by early 1863 more than 500,000 people in the factory towns of Manchester and Liverpool were out of work, according to Beckert. Underwriting the production and trade of cotton also fueled the rise of global financial institutions including the ill-fated Lehman Brothers. Lehman was founded in Montgomery, Alabama, in 1844 as a dry goods store and cotton brokerage.
In a Remote Corner of Georgia, a Rancher Comes Full Circle
Returning to the methods of his forefathers, Will Harris evangelizes for the Southeast's small but growing organic farming movement
Will Harris is tired of preaching to the choir.
From the converted Methodist church that's headquarters of Georgia's largest grass-fed livestock operation, Harris declares his White Oak Pastures Farm "an outlier."
For starters, White Oak uses no chemicals and practices what Harris terms "humane stockmanship" and sustainable land management. The farm employs 130 people—an unusually large number for a modern farm—from as far off as Silicon Valley and upstate New York. These 2,500 acres in southwest Georgia encompass a converted silo known as the "earth ship" that's home to a White Oak employee, an array of solar panels, an on-site restaurant, thousands of roaming cows, hogs, chickens, geese, goats, guineas, and ducks, and even guardian dogs to keep coyotes at bay.
But Harris is no rural Willy Wonka. What might seem an eccentric experiment is a true business. "This is not a rich man's philanthropic effort," Harris says of his 150-year-old farm. "We gotta make a living here."
It appears to be working. Harris says White Oak generated gross sales of $28 million last year, turns a profit, and continually reinvests in land, people, and an endless array of projects. Beef is where the bucks are. Each week, White Oak kills about 135 cows on the premises—on-site slaughtering is a key to making a comparatively small ranch viable—and sells thousands of pounds of meat through Whole Foods Markets, Publix, and Kroger supermarkets, numerous restaurants, and its own website. Harris and White Oak have achieved sufficient renown that a New York Times reporter wrote in 2015: "If the Southern organic crowd were made up of teenage fan girls, he would be their Justin Bieber."
Harris, 61, doesn't much look or talk like a pop idol. And while grass-fed beef has found a solid niche market, he is ready for his message, and humanely raised protein generally, to reach beyond the organic crowd. "We sing to the choir," he says. "We go to these conventions where like-minded people get together, and we think, ‘Whoa, this is a tsunami.' Then you go to a [mass market retailer]. The truth is probably somewhere in the middle."
Cheap chicken is hard to compete with
Chicken is the main challenge for Harris's business. The price gap between standard chicken and White Oak's pasture poultry is so wide—more than triple the cost in some cases, much larger than the price difference between standard and grass-fed beef—that the success of the farm's poultry business remains unclear.
Its success depends entirely on consumer behavior. White Oak's task, Harris says, is to convince enough shoppers that the health and environmental benefits of pasture poultry justify a higher price. "And not only can I not predict when it's going to happen," he says, "I can't predict if it's going to happen."
Still a small niche, but an expanding one
If the true market for naturally produced food lies somewhere between committed devotees and cash-strapped discount shoppers, that middle is expanding. Some 14,000 organic farms certified by the U.S. Department of Agriculture (USDA) sold $5.5 billion in organic products in 2014, up 72 percent from 2008, according to the USDA's 2014 Organic Survey. Organic farm sales grew at nearly double the rate of overall gross farm receipts.
Still, 2014 sales of organics amounted to just over 1 percent of overall farm sales, according to USDA data. It's likely that organic farm sales actually exceed $5.5 billion, as that statistic includes only USDA-certified organic products. The process for earning that certification is complicated. For instance, a farm must own or manage land for at least three years for the acreage to be certified as organic. And many farms don't go through the process to get leased land certified. Also, the Agriculture Department data reflect prices received by farmers. At retail, consumers bought $43 billion in organic farm products in 2015, including nearly 13 percent of all produce sold in the United States, according to the Organic Trade Association (OTA).
So far, much organic growing is concentrated in a few locations. In dollar terms, the top 10 producing states—led by California, Washington, Pennsylvania, and Oregon—accounted for 78 percent of the market in 2014, according to the Agriculture Department. No state in the Southeast was close to the top 10.
But the Southeast's organic production is rising. From 2008 to 2014, acreage in organic production doubled, and sales climbed 65 percent in the Atlanta Fed district's six states. Organic farm sales more than doubled in three of the six states.
For the time being, organic food production will likely remain a niche in the ag industry. As John McMillan, Alabama Commissioner of Agriculture and Industries, says, world food production needs to double by 2050 to feed a growing population. Organic farms are a welcome development, he says, but are simply too few and too small to close much of that gap.
That said, increasing numbers of shoppers are concerned about the origins of their food, according to OTA surveys. Consumer influence is fueling organic sales in America and is perhaps even more powerful in Europe, points out Nathan Kauffman, an agricultural economist and head of the Kansas City Fed's Omaha Branch. Largely as a result of consumer pressures, the European Union maintains stringent restrictions on the sales of genetically modified organisms, or GMOs. (Some in the U.S. agriculture industry contend those rules are also motivated by a desire to shield European farmers from international competition.)
Some in the agriculture industry see the emerging interest in the origins of food as a wellspring of hope for growers. Although most children don't care about where their chicken nuggets come from, that attitude changes as they get a little older, says Jill Stuckey, the Georgia director of the USDA.
"This is the most exciting time I've seen in agriculture in my lifetime," says Stuckey.
She points to the proliferation of farmers markets and other avenues for buying locally grown food as evidence of the spreading interest in the origins of food. Nationally, the number of these avenues nearly tripled between 2006 and 2014, and the number of school districts that acquire locally grown food rose nearly five-fold between 2006 and the 2011–12 school year, according to a 2015 USDA report to Congress on local food. Although the share is steadily rising, food sold locally accounts for only about 1.5 percent of all farm sales, according to USDA estimates.
Keeping food close to home
In recent years, the USDA has devoted more attention and dollars to organic farming and the development of locally centered food networks. A census of agriculture dates to 1820, and the USDA now conducts it every five years. However, the agency carried out its first survey of organic farming in 2009.
In April of this year, the agency announced a separate survey to gather data on food that is locally grown and sold. Not all food sold locally is organic, and not all organic food is sold near where it's grown, of course. Yet according to the USDA, nearly half of all U.S. organic products are sold within 100 miles of the source farm.
Advocates of local food networks believe bringing the food supply closer to home can boost public health, the economy, and farmers in places like Mississippi. More than 90 percent of the food Mississippians eat comes from outside the state, according to Crossroads Resource Center, a Minnesota-based nonprofit that researches food networks. A 2014 Crossroads study noted that against difficult odds, "many small but potent collaborations" are emerging across Mississippi in response to the billions flowing out of state for food and to public health concerns including diabetes and obesity.
One example of a small collaboration in the study is Native Son Farm in Tupelo. Amanda and Will Reed started their operation four years ago with 10 acres and signed up 150 neighbors to invest in their organic farm and receive weekly deliveries of produce.
A new approach that's 150 years old
The Southeast is home to about 450 USDA-certified organic farms. And experiments with unconventional crops and growing methods appear to be spreading. Growers in Georgia are cultivating olives, ginger, a type of holly tree whose leaves make tea, and even citrus in the southernmost part of the state. A former Alabama first lady is trying to launch a bamboo farm and processing operation and create jobs in the impoverished but agriculturally productive region known as the Black Belt.
Some nontraditional growers are prospering. Peggy Sutton founded To Your Health Sprouted Flour Company in 2006 in Fitzpatrick, Alabama, about 25 miles east of Montgomery. She grows sprouted grains, which are germinated in a highly controlled environment. During a presentation at Auburn University, Sutton says her sales surged from $8,500 in that first year, when she sprouted grains in Mason jars in her kitchen, to a projected $6 million in 2016. She employs 35 people and counts among her customers well-known brands such as Kashi, Kellogg's, and Amy's Kitchen.
Typical of the zeal of many organic growers, Sutton is trying to launch a statewide organic farmers' cooperative. Alabama, according to the USDA organic survey, had only 28 certified or exempt—essentially very small—organic farms in 2014.
When what would become White Oak Pastures Farm started, pretty much all food was local and organic. Fresh out of Mercer University (and the Civil War), Harris's great-grandfather moved from nearby Quitman County and started raising cattle in Bluffton in 1866. The way Harris runs White Oak Pastures today is closer to what his great-grandfather began than to the industrial ranching his father practiced in the years after World War II.
To be sure, Harris—who runs White Oak with two of his three daughters—didn't always prize sustainability. In the mid-1970s, he returned to tiny Bluffton (population 100) from the University of Georgia with a degree in animal science and a belief in the credo of the day—essentially, he says, to use whatever chemicals would make cattle grow bigger faster.
Harris began his conversion to sustainable land management and humane stockmanship in the mid-1990s. Over time, he says he became increasingly distressed at what he calls the unintended consequences of the farming methods he practiced. Chemical fertilizers killed microbes in the soil and degraded the land. Watching his cows herded onto trucks for 30-hour rides to be slaughtered in the Midwest helped Harris decide to break with his father's farming ways.
White Oak today is one of very few farms in the country with its own USDA-inspected abattoirs, or slaughterhouses, for poultry and mammals. The renowned professor and pioneer of humane stockmanship, Temple Grandin, helped design the facilities, Harris says.
The abattoirs sit amid pasture and woods populated by a menagerie of critters, ponds, and plants, all with a role in Harris's grand design. Eventually, he'd like to expand White Oak to as much as 10,000 acres to further stabilize the farm financially.
In the present, during a bumpy tour in his mud-spattered SUV, Harris discourses passionately on topics directly and tangentially connected to his trade, from the "real symbiosis" exemplified by dung beetles, to the economic plight of rural America, to natural land management. Next to an old pecan orchard that's been invaded by undergrowth, Harris stops to explain that pigs are at work clearing underbrush. He produces a pad and scrawls a diagram showing several categories of land: savanna, open pasture, hardwood bottoms, cropland, planted pines, and so on.
"Every one of these, through animal impact, can be made into savanna," Harris says. "You use hogs to accomplish certain things, goats to accomplish certain things, sheep, cows, poultry—everybody's got a role. I don't want to wax poetically, but it's almost like a canvas, and you're painting with different species."
Rice Country on the Cajun Prairie
An urbanized South still includes pockets where agriculture anchors the economy and lifestyle. Southwest Louisiana rice country is one
On a rainy July day, John Morgan spots an iceberg headed for Crowley, Louisiana.
This mass is intangible, a large transaction in the rice commodity market visible on a monitor in Morgan's office at Louisiana Rice Mill LLC. Morgan is a former commodities trader, and, as vice president of a company that processes truckloads of rice every day, he closely follows global rice markets. This "iceberg" is a trade with the potential to move the market. He tells a visitor about the iceberg, so-called because only a small part of the transaction is apparent, as the buyer or seller aims to mask his intentions so as not to influence market prices too much.
Morgan and his visitor, landowner and rice broker David Bertrand, discuss the looming iceberg before moving to other news du jour: the area's biggest rice growers—the Thibodaux brothers of the Thibodaux Ag Group—have switched from "green to red," meaning they've shifted brands of farm machinery. And earlier that morning, Bertrand answered a phone call in his home office like this: "Hey man, how's your moisture running?"
He was referring to the caller's rice crop.
This kind of chatter is common in southwest Louisiana. The flat expanse known as the Cajun Prairie is among the nation's top three rice-producing regions, and rice growing and milling have been foundations of the economy and culture for more than a century. It's why Crowley bills itself as the rice capital of the United States. Rice, talk of rice, and signs of rice are everywhere. Crowley's 77-year-old downtown movie house is called the Rice. The city is home to the Rice Palace restaurant, casino, and truck stop, which houses a photo of then-Senator John F. Kennedy visiting the local Rice Festival of 1959. The local Chamber of Commerce website advises that in Crowley "life is rice and easy."
Louisiana Rice Mill, with 200-plus workers, is the biggest employer in town. Louisiana Rice and a handful of other processors form a small skyline of silos and grain elevators, while the 14 miles of two-lane between Crowley and Mermentau are lined with defunct mills, hulking ghosts along the railroad track that date from an age when the ag business was less consolidated. Bertrand, a member of the Atlanta Fed Agriculture Advisory Council and an amateur historian with encyclopedic knowledge of his native southwest Louisiana, recalls when 40 rice mills operated in the area.
Fewer farms, but rice is still the kernel of local culture
Times have certainly changed. Crowley's population peaked in the 1970s, and there are fewer than half as many farms as there were 50 years ago in the adjoining parishes of Jefferson Davis and Acadia, home of Crowley. Economies of scale are critical, as farmers must spread their volatile costs across bigger operations to achieve efficiency. So the average farm keeps growing larger.
Yet even as the Southeast has rapidly urbanized, pockets of the region like this one remain economically and culturally rooted in the soil. Jefferson Davis Parish has more farms—656—than businesses with employees, according to figures from the United States Department of Agriculture (USDA) and the U.S. Census Bureau. A bit southeast of Crowley, sugarcane fields stretch virtually unbroken for 40 miles along U.S. Highway 90 from New Iberia to Calumet. Along with rice, sugar has been one of Louisiana's signature crops for 200 years.
Bertrand's family goes back a century in Louisiana farming. He has land deeds to prove it. Alan Hebert, who farms rice on 1,600 acres including land he leases from the Bertrands, is at least the fourth generation of his family to grow rice on the Cajun Prairie. In the 1940s Hebert's father, Bobby, rode mules to deliver water to field workers, including German prisoners of war.
"Rice and sugar cane are really a part of the culture of south Louisiana," says Michael Deliberto, a Louisiana native and agricultural economist at Louisiana State University.
Among the 50 states, Louisiana ranks third in rice and second in sugarcane acreage and production. Combined, the most recent USDA data show Louisiana with roughly 800,000 acres, or about 1,250 square miles, of land in the two crops.
Ag smaller, but still vital to the nation and region
Agriculture as a business has shrunk in many ways. In 1930, agriculture accounted for 8 percent of the nation's total economic output, as measured by gross domestic product (GDP). Now it makes up less than 1 percent of GDP. Still, it remains important to the Southeast and the nation. Gross farm receipts—essentially revenues—totaled $39.3 billion in the Southeast and $422.8 billion nationally in 2015, according to the USDA. It is no longer a labor-intensive business. Fewer than 2 percent of workers today are employed on farms, down from about 40 percent in 1900.
As far fewer people work on farms, far fewer live on them. In 1910, about half of U.S. households were on farms. That share plummeted to 10 percent by 1950. The Southeast remained unusually agrarian, though. More than a quarter of people in the region still lived on farms in 1950, including half of Mississippians. Then tractors and other farm machinery proliferated, and operators of ag businesses such as rice mills and slaughterhouses, once scattered across rural America, found it efficient to concentrate in specific geographic areas. The population of the Southeast—the six states that make up the Atlanta Fed's district—has more than tripled since 1950. Yet today fewer than half a million people in the Southeast live on farms, compared with 6.5 million in 1940 (see the chart).
Railroad brought land speculators, farmers to the Cajun Prairie
Southwest Louisiana first saw widespread cultivation in the 1880s after a rail line was completed from New Orleans to Houston. The tall grasses that once covered the Cajun Prairie were nearly gone by the 1920s because of overgrazing and clearing for farming, according to a 2001 paper by a group of Louisiana biologists.
French Acadians who were exiled from Nova Scotia settled the prairie in the mid-1700s. Over many decades, a distinctive culture flourished, as the people who would come to be known as Cajuns were largely isolated, surrounded by vast wetlands and thick forests. After the railroad opened, many settlers of German descent, including farmers from the Midwest, responded to land speculators' enthusiastic sales pitches.
In short order, a "rice revolution" struck the Cajun Prairie and southeastern Texas, the late Gilbert Fite, a historian at the University of Georgia, wrote in Cotton Fields No More, Southern Agriculture 1865–1980. "By the early twentieth century, rice farmers in Louisiana and Texas, joined by growers in Arkansas after about 1904, were the most modernized farm operators in the South," Fite wrote.
Rice growing has continued to evolve. The past decade or so has brought rapid advances in seed technology, including the development of "clear field" varieties that are more resistant to herbicides and thus produce fields clear of weedy "red rice," LSU's Deliberto says. Increases in yields have been dramatic. On average for the three years of 2013–15, Louisiana growers produced 51 percent more pounds of rice per harvested acre than in 1997–99, according to the USDA Economic Research Service. That increase was more than double the improvement of the previous 20 years.
Even with advanced seeds and fancier equipment, rice farming is still hard, hot work. Hebert says it's all but impossible to find locals willing to do it, so he imports workers from Mexico.
And he sweats and frets.
You learn to deal with it
It's humid, 90 degrees, and piles of white clouds drift over the prairie. At the wheel of his 19-year-old combine, Hebert mows foot-and-a-half high rice plants. Gangly egrets take flight just ahead of the combine's spinning blades.
Hebert is working during a window of dry weather. Too much rain, and the rice is too moist to mill. Too little rain, and Hebert and the Bertrands must spend more money to pump water up from the Chico Aquifer 250 feet below ground. Hebert's 13-year-old son, Kane, runs a combine "like a grown man," his father says. But Hebert is determined that his straight-A-student son will get a college degree. Hebert left nearby McNeese State University after a year to return to the farm. He loves farming but regrets not earning a degree. His brother became a chemical engineer in the petroleum industry, as he couldn't handle the precarious farming lifestyle.
It's easy to see why. On top of the vagaries of weather and physical work are wild swings in commodity prices. Average prices for unmilled or "rough rice" fell more than 25 percent over about the past year, according to Nasdaq.com. Farming is a volatile business. As agricultural economist Nathan Kauffman of the Kansas City Fed explains, high prices lead to greater production, which leads to oversupply, which lowers prices, which results in less production, which ultimately sends prices higher, and so on. Some years, Hebert says, he clears as much as $200,000. Other years, he loses $50,000. He borrows more than $1 million each year to finance land leases, equipment, inputs like fuel and fertilizer, and the nine migrant workers he hires and houses.
Where Hebert's work once was steady for 10 months out of the year, now with the introduction of double-cropping with crawfish, it's all year long. In the 1970s and '80s, Louisiana rice farmers realized they could supplement their income by managing the crawfish that already lived in the flooded rice fields. More recently, the practice of raising the crustaceans has become an important economic ballast against the peaks and valleys of rice farming. "Our crawfish is the only thing saving us," says Hebert.
For rice growers who "double crop," crawfish can be the difference between a $50-an-acre profit and a loss of $20 or $30 an acre, says Greg Lutz, a professor and extension specialist in the LSU AgCenter's Aquaculture Research Station.
A few weeks after the late summer rice harvest, growers dam up their fields and flood them. Crawfish then swim out after spending weeks burrowed in the mud. But if it hasn't rained much, lots of crawfish die during their hibernation. On the other hand, plentiful rain yields meaty crawfish, Hebert explains.
Pyramid-shaped wire traps catch the critters, and workers guide custom-equipped boats to empty the traps, rebait them, and drop them back in the water. This brand of crawfish farming has become sufficiently widespread that a local iron-working shop has become a prosperous builder of the boats, some of which travel on land and water. The practice has also helped push Louisiana's average annual aquaculture crawfish harvest up more than 50 percent during the past 10 years, according to statistics from the LSU AgCenter.
Crawfish were underground as Hebert cut rice one day in late July. Rumbling along, the combine "chokes" as grain jams the workings that thresh kernels from stems. Among the trials of rice farming, this is a minor annoyance. Hebert describes his life's work as "a whole lot of sweating, and a whole lot of no-money-making."
"You get what the good Lord gives you," he says. "If we get rain, we get rain. If we don't, we don't. You just learn to deal with it."
Next in the three-part series, Tending the Farm: Economy Matters explores the rise of the poultry industry.