Rise of the mega-farms: American farms have swelled, and North Dakota is leading the way
MOORETON — You can’t just fix tractors anymore.
Today’s tractors, though, are packed with electronic equipment. Specialists need to hook them up to computers to diagnose problems. And they’re huge — five to six times larger than the ones in Ward’s collection.
Like tractors, American farms are getting bigger – and North Dakota is leading the way.
Thinning margins and expensive machinery have forced more and more farmers to go big or get out. In North Dakota, the relatively small population and open landscape have accelerated the process.
About 35 percent of all North Dakota farms were 1,000 acres or larger in 2012, according to the Census of Agriculture recently released by the National Agricultural Statistics Service.
The share of farms that large in the state actually peaked in the 1990s, and has fallen from about 46 percent in 1992. But North Dakota is still well above the average for the country, where about 8 percent of farms were 1,000 or more acres in 2012.
A number of factors have caused the large size of North Dakota farms, and farmers and industry experts don’t always agree on what it ultimately means. But many say it’s unlikely the trend will reverse.
Why the increase
Allen Ward said he’s lucky he got into farming when he did. Now, he said, it takes help to make it.
“You need to have somebody that’s willing to cut you a break,” he said. “You couldn’t just wake up one day and say, ‘I want to be a farmer.’”
North Dakota has essentially seen a more aggressive version of a national trend toward bigger farms. The barriers to entering the industry keep climbing, and maintaining an operation is becoming increasingly expensive.
Modern farm machinery is many times more efficient than the simple equipment of earlier generations, and it’s much more costly as a result. These days, a mammoth combine harvester can run a farmer $500,000.
The technological arms race feeds into a cycle: To turn a profit, a farmer needs pricey equipment. To justify the equipment’s cost, the farmer needs more land.
“To farm all these acres, you got to have huge machineries,” said Alan Woodbury, who owns a grain elevator in Dickinson. “The small farmers just can’t do it.”
The average North Dakota farm had about $300,000 worth of machinery and equipment in 2012, according to the census. That’s almost three times the national average.
Experts say the abundance of sparsely populated land here is another part of the equation.
Years of migration to cities have left fewer people to farm, said Juan Murguia, an assistant professor in the Department of Agribusiness and Applied Economics at North Dakota State University. The remaining farmers have picked up more land as a result.
North Dakota is also drier than some other states, which hurts farmers’ yields.
“So you need more acres to survive as a farmer,” Murguia said.
And farmers here focus heavily on wheat — almost 8 million acres of it in 2012, about a third of all cropland harvested.
While it brought in about $2.5 billion for farms across the state in 2012, wheat hasn’t seen the technologically aided jumps in crop yields like corn and soybeans have, making it more likely and logical for farmers to go big to maximize their profit margins.
What it means
There’s some debate over how the rise of big farming has affected the industry.
Bigger farms can lead to a lack of oversight, which in turn could cause food safety issues.
“When you’re a small farm, everyone’s in it together. They’re going to shed their blood, sweat and tears a lot harder,” said Mriah Ehmke, an associate professor in the University of Wyoming’s Department of Agriculture and Applied Economics.
But food safety concerns will likely force a company out of business, so it’s not a long-term issue, said Bret Oelke, a retired Extension educator for the University of Minnesota.
And since large farms are generally more efficient, they can produce more at a lower cost. That means lower prices for consumers, Oelke said.
There’s a gap between farms and retailers, Ehmke said — more efficiency at one end doesn’t always translate to lower prices at the other. Prices tend to creep up anyway, she said.
“Once prices go up, you don’t see prices go down so much,” she said.
Larger farms are also at a bigger risk for severe weather, simply because their holdings cover more land, said Bob Kuylen, who farms west of South Heart.
“I think the more and more bigger you get, the less quality you’re going to have,” Kuylen said.
Kuylen said it’s almost impossible to get into farming these days without knowing someone because the barriers to entry are so high.
The statistics haven’t quite caught up with that trend — the average North Dakota farm operator was 57, according to the most recent census.
Still, Kuylen didn’t seem concerned.
“I’m seeing more and more young guys in the elevator line,” he said. “It’s a good sign.”