Synergy for The Most Profitable Farming

So You Want to Be a Modern Farmer?

most-profitable-farming

By Ken Johnson
Waupaca, Wisconsin

These days, the most profitable farming involves a synergy of economics, land use, and understanding livestock.

Maybe there is a gene in us that tells us there is satisfaction in being self-reliant. For many, if not all of us, there seems to be a certain comfort in the ability to raise and process our own food. It’s like: if other food sources fail at least we have something to eat if we raise our own. For those who do not have access to garden space, they must rely on the efforts of others who attend to seed and soil. Public gardening space (“community gardens”) is an alternative, and for me it is great to witness the trend toward urban style meat and vegetable growing. Raising a substantial amount of one’s own food can go a long way toward relieving a family’s budget. Plus, there are other benefits, like personal satisfaction and even stress relief. It may be a stretch, but wouldn’t it be nice if some two-income families could sustain themselves with one income, a stay-at-home parent, and a productive garden?

I have been a farmer at heart all my life, which has been about two-thirds of a century. Even before becoming a teenager, being raised on a 100-acre farm in northwest Iowa, I realized that farming was in the throes of change. Sometime during the year 1947-48 my parents finally gave up their pair of heavy Percheron horses and bought their first tractor, an Oliver 60. Although kerosene and gasoline farm tractors had been around for some 30 years, work horses had been around a whole lot longer, and although gasoline wasn’t all that expensive, it couldn’t be raised on the farm. Cars were a different matter.

Nobody went to town in a buckboard anymore. Although there were some huge grain farms around the lower Midwest and some in the far western states, most farm tractors in the middle decades of the 20th century were built for farms operated by individual families. A typical farmer might own one or two horse teams, and the typical farm tractor was built to replace them. They were pulling tractors and often pulled the same equipment that the horses pulled, and tractors didn’t have to be curried down after a day’s work. Innovations did come along for the most profitable farming.

Although the technology had been around for several decades, in 1920 International Harvester put into production a tractor engine driven “power-take-off” that provided propulsion for harvesting machinery that was previously wheel driven. Other farm tractor manufacturers followed suit. Improvements to PTO systems continued including a separate clutch for independent operation, different rotation speeds and other innovations.

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The year 1938 saw the inclusion of Harry Ferguson’s three-point hitch hydraulic system on Ford farm tractors. The combination of a tractor with a PTO and three-point hitch system in effect made self-propelled units out of any farm equipment attached to them. Remote hydraulics, which can control a ram for lifting and lowering farm implements from the tractor seat was also a very useful invention. By the 1950s the combination of these inventions and cheap petroleum fuel for the most profitable farming pretty much destroyed the trade in farm horses.

It wasn’t long after Dad’s first tractor that he wanted a different one. He had a nephew who happened to be a farm implement dealer and he sold Dad a newer Farmall C. It had about the same horsepower as the old Oliver and it proved to be more reliable, however, it did not perform well with a two-bottom plow in the heavy soil. One day Dad had delivered a really old McCormick 10-20, probably a late 1920s version. It was a heavy, blocky, vibrating machine. It did have rubber tires though. The fat back tires were of the knobby variety. It had big, wide rusty fenders upon which I could sit as we slowly but steadily plowed the “rounds” (up and back across the field). One round and my entire little body was pretty numb as I recall.

This pair of tractors sufficed for another couple of years, then Dad traded for another Oliver, a six cylinder model 70 which he kept until we bought a farm of our own in central Wisconsin. This was 1953 and I was 10 years old by then. I was aware of what was happening to farmers around our area. They were getting bigger; farm equipment was getting bigger, and farmers were leaving and/or going broke. My parents and our nearest neighbors, my Dad’s brother and his family, and my uncle’s in-laws who also lived just a couple miles away, all moved, the aforementioned to Minnesota, but we went to Wisconsin. At the time I was of the opinion that it was the cost of the machinery that broke so many farmers and the farmers’ incessant desire to one-up their neighbors with newer, bigger, better equipment and most profitable farming. I may not have been that far off in my assessment.

As the years went on in Wisconsin, we had some learning to do. Dad’s first year of corn turned out to be nothing but nubbins. The sandy loam soil needed fertilizer. The rich Iowa soil needed none. We couldn’t grow 110-day corn either. Eighty-five day corn with its smaller ears and lower yield were more in order. In Wisconsin we had a small herd of dairy cows and replacement stock, so we had to learn how to fill a silo with chopped corn or silage.

My little brother and I went from a big consolidated school in Iowa to a small one-room country school in Wisconsin. We went from picking corn with a tractor-mounted picker to picking corn by hand, and from using a combine, to bundling and thrashing oats. Dad seemed to take it all in stride like he was in his element, and the rest of us went right along with it. Mom still had her chickens. She milked with a milking machine now. In Iowa she milked by hand, although fewer cows. In Iowa my folks had a cream separator, sold the cream and fed the skim milk to the pigs and chickens. In Wisconsin we sold grade B whole milk in 10-gallon milk cans. We had what’s known as a “general farm.” We had a variety of enterprises: pigs, sheep, chickens, sometimes geese, a huge garden, lots of blackberries, gooseberries, hazel nuts, an apple orchard. We rarely seemed to have much in the way of spending money, but I can’t recall ever wondering where our next meal was coming from. Thinking back on it, we worked pretty hard and long hours compared to what’s expected today, but I don’t think we noticed it back then. Some of my fondest memories are of those days and I only wish I could share them in some meaningful way with all children. How different are today’s “farms.”

There was a time during my teens that I wondered how I was going to get a start in the most profitable farming. I divided farming into separate but related businesses. First there was land; then livestock; machinery; buildings; operating capital.

Capital

First, you will need to raise some capital to buy or leverage finance some portion of your most profitable farming enterprise.

Land was and is very expensive. If you own land, you can rent it out or share crop it, but if you do the math, ordinary farmland will never pay for itself, let alone generate an income. Over time your land should increase in value. This is why speculators buy land and drive up land prices beyond the point of anyone making a living on farming it. You can “improve” your land by putting a building on it, such as a house. You’ve got to live somewhere, right? Put a fence around your land, and raise some sheep. The sum of all the parts is usually greater than the worth of the individual parts on their own.

There are substantial up-front expenses when buying land. Can you rent land to farm? Not likely, especially if you are not related to or are a stranger to the owner. I’ve heard of an instance or two where a young person was helped by a relative. One operation rented a large dairy barn from an uncle, and the young woman raised milk cows from calves. The last I heard she was milking 60 cows and growing. She bought all their feed.

Livestock

There’s a lot to raising livestock; there are all kinds of challenges. First you need a place to put them, which requires land and usually some kind of shelter. If you can graze them, so much the better. Buy young stock in the spring, graze them until about snow time in the fall, and market them. Good fences and the ability to rotate pastures is a big plus. Your choice of livestock will determine your profits.

The idea of having to feed grain to finish out livestock has proven not to be absolutely true. Livestock may take a little longer to reach market weight by finishing on forage alone, but the profit margin could well justify the extra time. You can graze sheep, cattle, goats, chickens, geese, ducks, rabbits, pigs and horses. Certain breeds do better on grazing than others. Some pig breeds require grain supplements, others only minimal. There is more to raising healthy animals than just sufficient food and shelter, but that’s a big part of it.

Some countries like Argentina and the U.S. eat a lot of meat, but the trend is changing in the U.S. because of health concerns about cholesterol and heart disease, obesity, diabetes and other issues. Vegetables don’t have cholesterol and have far fewer calories than meat. The more profitable meat animals to raise are currently geese, especially during holidays, and guineas (on restaurant menus). Goat (called “chevon”) and rabbit are becoming more popular, especially in restaurants. Just about any appropriate fish (perch, bass, trout, etc.) raised in tank arrangements is gaining popularity and is apparently lucrative for the moment. These are potential opportunities for the more flexible “general” farm.

There are grazing strategies or synergies that may lend themselves to the most profitable farming. If your grazing land is cross-fenced to allow for rotation grazing, you can graze goats with cattle. The two species eat differently. (Cattle graze while goats browse.) Rotate the cattle and goats out and follow with sheep and geese. Follow the sheep and geese with chickens. Sheep and geese are grazers (geese are vegetarians). Chickens eat almost anything, including larvae left behind by the sheep.

Pigs are a little different. Some breeds are good grazers, especially the heritage breeds like Large Black, Red Wattle and Tamworth. My dad raised Durocks and Tamworths. Tamworths are rooters, which is what pigs with long snouts are supposed to do, but they can also root up fences and invade your neighbor’s garden or get into trouble with your neighbor’s dog. Large Blacks and Red Wattles on the other hand, don’t need such an impenetrable barrier of a fence.

Goats too, unlike sheep, need extensive fencing unless one opts for the Myotonic breed. There are several varieties of Myotonic goats, some small, some with long silky hair. The Tennessee Fainter or Myotonic is the large, muscular meat goat of some 200-pounds, more or less. Texmaster goats are a cross of Tennessee Myotonic and Boer, another meat goat. Myotonic goats have been crossed with all kinds of other goat breeds with no guarantee of the myotonic feature of not being able to jump fences. Such a cross with a dairy goat that could produce a non-jumping, good-milking dairy goat seems to me to be a good idea. Wethers of such a combination might be worth something for meat too. Newborn dairy goat bucks are worth little to nothing to dairy goat farmers. Check Craig’s List, they are often free if you don’t mind bottle feeding them for a month or two.

Sheep come in different varieties, too. Some are raised for their wool, some for meat, some for milk or a mix of the three. Meat sheep can be of the wool variety or hair variety. The hair variety do not need to be sheared. There’s lots of readily available information about sheep.

The wool our sheep produced, without the government subsidy, would have run our operation in the red. The sheep had to be sheared, but there was no market for the wool. Our wool competed with cotton and synthetics and cheap wool from overseas. Cottage enterprises using wool have remained for specialty markets and there is some renewed interest. We need a new use for wool.

Milk from sheep is not yet very popular in the U.S. Commercially, it is usually collected, frozen and shipped to a processor for cheese. Milking sheep can be quite lucrative in the U.S., and sheep are usually a pleasant animal to work with. Milking sheep also are wool bearing sheep and need periodic shearing. A cross between a hair meat sheep such as the St. Croix and a dairy sheep such as the East Friesian, could produce a high milk-producing hair sheep.

Cattle: dairy and meat choices. Holstein dairy cows dominate the milk industry in the U.S. There are markets for special cheeses made with milk from specific breeds of cattle. Jersey milk is known for its high fat content in small globules. Jerseys are small cattle compared to Holsteins and are easier to handle. Dexter cattle are smaller still. Dexters are a heritage breed with an interesting history and like Jerseys are very productive for their size. Raising purebred heritage breed cattle can be a lucrative enterprise. Google ALBC (American Livestock Breed Conservancy) on the Internet for heritage breeds.

Learn how you can register the progeny of your purebred bull and grade cows. Raising beef cattle can be interesting too. Dexters are considered to be either beef or dairy cattle. They are a stocky breed, with smaller cuts of meat. There is some interest in miniaturized cattle, but so far I think more as a novelty and not for the most profitable farming. (Some can be quite pricey.) Some meat and some dairy cattle have retained their genetic ability to thrive on forage alone. These are the cattle I am most interested in.

Chickens: We can talk about chickens and other poultry including water fowl. Eggs have traditionally been very cheap at the grocery store. If you know the story behind most grocery store eggs, you probably feel a bit squeamish about using them. Despite their high cholesterol content, eggs are a convenient source of animal protein and a key ingredient in many dishes, cakes and breads. There is not much profit in raising chickens and selling their eggs.

The profit from organically produced eggs is only marginally better. If possible, buy from a local producer and buy fresh. I have purchased organic eggs at a supermarket only to have flat yolks and runny whites. Not very appetizing. If you want yolks that sit up and thick whites that don’t run, buy duck eggs. Selling fresh duck eggs vs chicken eggs to bakeries and restaurants can be lucrative.

Factory farm meat chickens do not appeal to me either. The chicken is crossbred to produce fast growing, oversized breast portions. The chicken breasts grow so fast the chicken’s legs and internal organs can’t develop fast enough to support it. Life expectancy of these birds is measured in weeks. A normal chicken can live several years. Do the research, find out the rest of the story behind factory chicken.

Healthy chickens are easy to raise, colorful and fun to watch. Dual-purpose chickens have not been crossbred for heavy breasts and quick growth. You can have both meat and eggs from the same chicken. Just because it says “free range” on the egg carton doesn’t mean the chicken has access to an outdoor environment or pasture. Geese are grass and weed eaters.

Have you priced a frozen supermarket goose lately? Geese used to be more popular than turkeys for holiday meals. They may be somewhat noisy but there is no domestic animal prettier that a flock of geese grazing in a pasture, and the potential for most profitable farming is encouraging. Geese need protection from predators, especially at night.

Organic turkeys are not cheap but still a better value than factory turkeys in my opinion. Guineas anyone? A dark meat bird, guineas are more difficult to raise because they are flighty and may decide the best roosting place is the roof of your house. Having a broody chicken hatch and brood guinea keets can solve several problems. Guineas don’t usually attend to their young like chickens do. Most keets are usually lost if left for their parents to raise them. Keets who think they are chickens behave more like chickens, at least initially. Clipping some flight feathers of young guineas will keep them grounded, but also make them more vulnerable to predators. Guinea meat can serve as wild fowl or pheasant in restaurants.

Buildings

The question becomes, “What am I going to use the building for?” One barn building can suffice for all your animals, or you can build several animal-specific buildings. Even during inclement weather, horses and most cattle can get by with a three-sided structure that faces south or southeast. Highlander and Galloway cattle often prefer to remain outdoors during any weather. Sheep do not like to get wet, especially wool sheep, but they do fine in snow if it’s not too deep.

Buildings can be expensive to build, and then there are the property taxes that also discourage putting up buildings. There is a tendency of late to keep livestock outdoors regardless of the weather, including dairy cows. Such a practice would have been unheard of during years past. Not only do I think livestock suffer while out in inclement weather, they undoubtedly are less productive because what they eat has to provide more energy for just survival alone. All livestock need shelter at least some of the time for protection from the elements or predators.

most-profitable-farming

Ken has a seven-foot International Harvester sickle mower for which he paid $325. He also has a back blade, three-point quack digger, and a few other pieces for the tractor.

Machinery

This may be an area where a beginning farmer may be able to skimp, to achieve the most profitable farming. New machinery depreciates quickly. Older farm equipment may still get the job done and may already be more or less fully depreciated. There is lots of old machinery available at close to salvage or scrap iron prices, and lots of parts available to keep them going. If you don’t mind doing the maintenance, it’s pretty hard to lose a lot of money on old machinery. Fixing up and using old machinery has its own rewards, but if your farming operation is kept as simple as possible, you won’t need a lot of machinery.

As mentioned above, your operation could be as simple as having access to grazing land that is well fenced, buy grazing stock in the spring, graze and water them until the snow flies then sell them. If you would rather not work with animals but like working with machinery, buy or lease some equipment and rent yourself out. You may want to choose between tillage, planting or harvesting. The scale of your operation will depend on your initial resources. Modern tractors used for tillage are all diesels of several hundred horsepower. The tillage equipment they pull is often of the one pass variety and you are done. The concept of no-till has been around for decades where seed drills or planters are designed to work up the soil enough to plant without any other seedbed preparation.

There are a lot of large old 60- to 150-horsepower fuel guzzling tractors available that represent cheap horsepower. A good portion of these tractors are diesel, which are less costly to operate than gas tractors. Although they can’t measure up to modern tillage horsepower requirements, they are still capable of a good day’s work, and because they can be found for a comparatively small investment, the potential for the most profitable farmimg with them is there. For hobby farmers, smaller tractors are much more practical. One 25hp tractor could suffice for up to about 100 acres. Anything above 45hp is probably overkill. The larger the tractor the more fuel it consumes, so it should be matched to your requirements. New tractors within the above horsepower range may run $15,000 to $20,000, and that might include front wheel assist and a loader. I chose a 1966 Massey 150 diesel with three-point hitch for $3,600. I could have chosen an older tractor without three-point for less than $1,500. Old tractors look great when they’re all fixed up and painted! They are a part of Americana. (Google “old iron” on the Internet. Check out www.tractorhouse.com and Craig’s List for local sales).

My Hobby Farm

Not long ago I bought 20 acres of beautiful rolling hills in west central Wisconsin. About 14 acres was rented out for cash crops while six acres remained in a mixture of pine and hardwood trees. The farmland is now in the process of recovering. It is seeded with grasses and clovers. My plan is to fence it and graze it with a variety of animals, mostly of heritage varieties. The wooded area has a sloping southern exposure ideal for a basement building open to the south. My Massey Ferguson has a three cylinder Perkins diesel engine that is very efficient and so far reliable. I have an old eight-foot Van-Brunt seed drill in good shape that I paid $350 for. Behind it I pull an old Brillion packer: $150. I have an old Danuser posthole digger: $150, that I reworked for the three point on the tractor. I have a seven-foot International Harvester sickle mower: $325. I have a back blade, three-point quack digger and a few other pieces. What I intend to buy is some hay equipment: a mower-conditioner or just a conditioner, hay rake and a baler, probably a 4×5 round baler, because they are simple, don’t use a lot of twine and I can handle the haying operation by myself.

As you can see, my machinery is pretty minimal, old and inexpensive. I enjoy working on old machinery. I prefer trailer equipment with a hydraulic lift as opposed to tractor mounted three-point. Trailer equipment (attachment) has its own chassis on wheels that are positioned at the proper lift and pivot points. When mounted on the tractor’s three-point, the pivot point ( the tractors rear wheels) is in front of the attachment which has to be continually monitored and adjusted for depth etc. With trailer attachments you just back up, hook on, plug in the hydraulic hose and go. With three point (or two point on some tractors) it can be a struggle, especially for one person, to get an attachment mounted. The advantage of three or two point is the ability to get into tight places. If you have a lot of post holes to dig, a three-point digger is almost a must.

If you are in the market for trailer equipment be aware that older models may have a clutch lift and not a hydraulic lift. Clutch lifts usually work just fine but with a clutch lift the wheels must be turning for the lift to work. If you are plowing with a plow with a clutch lift and you get stuck (hung up on a rock or something) and can’t go forward you will have to unhook the plow and pull it off the rock (or out of the mud or whatever) with a chain. With a hydraulic lift chances are all you have to do to get unstuck is move the hydraulic lever mounted near your seat and the plow pops right up, (you may have to back up a little first).

There are all kinds of older wheeled hydraulic implements available of 1940s-50s vintage. My seed drill has a clutch lift. My quack digger is three-point, but I want to trade it for a trailer type. My sickle mower is of the trailer and hydraulic variety and it works just fine. A side-mounted mower is easier to watch because you don’t have to be looking over your shoulder to see it but they are also a pain to mount under the tractor. Once mounted, side mowers are handy machines, they are also not nearly as common as other styles.

One other neat thing about trailer attachments is you don’t need a modern tractor with three-point to use them. Some of the old vintage 1940s and early 50s tractors are simple to work on and fun to drive. Many are available for under $2,000. Salvage price is in the $500–$1,000 range. If the old tractors don’t have hydraulic pumps (and some do) it is possible to retrofit a pump on the front of the engine or on the tractors PTO, or some other place. If you use implements with clutch lifts then you don’t need hydraulics. Some of the old tractors have clutch lifts built on them that raise and lower implements like cultivators and other side mounted or rear mounted equipment.

most-profitable-farming

Ken has an old Danuser posthole digger: $150, that he reworked for the three point on the tractor.

There is a movement today for people who want to get closer to nature and to the food it provides. There are many reasons for this, perhaps the main reason being it’s in our genes. It‘s only been recently in human history that we have separated ourselves so far from the land. My parents were perhaps among the last generation of mainstream general farmers. The last 10 years before he retired at age 70, my dad worked for two farmers who owned or were in control of several thousand acres. These farmers were not general farmers, they were potato and green bean farmers. One of these farmers reintroduced potatoes into central Wisconsin in a big way after previous potato failures had diminished their production for many, many years. As a result, two giant potato corporations from Idaho became interested in central Wisconsin. The rest is recent history. With innovation it’s not too late for small farms to grow and thrive once again with the most profitable farming.

Whatever turn your operation takes, always maintain a ledger of your expenses. Take encouragement from old-timers like Gene Logsdon who have lived close to nature, and listen to what your own genes tell you about the most profitable farming.

Originally published in the March/April 2012 issue of Countryside & Small Stock Journal.

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