How did farmers respond to increasing consolidation in agricultural markets

Many farmers responded to the increasing consolidation in agricultural markets and their dependence on the evolving railroad system by creating local and regional cooperative organizations.

What led to the consolidation of Agriculture?

III. New systems of production and transportation enabled consolidation within agriculture, which, along with periods of instability, spurred a variety of responses from farmers.

Why are firms consolidating in the Australian agriculture market?

Liberalised markets and Australian agriculture’s high exposure to export markets means that our firms are driven to find scale efficiencies that allow them to compete globally, so there is an understandable impetus for firms to consolidate. There have been significant structural changes in agricultural commodity markets.

How do farms expand and consolidate?

Consolidation can occur through shifts in ownership, as operators of large farms purchase land from retiring operators of midsize farms. However, most cropland is rented, and farms frequently expand by renting more cropland, often from retired farmers and their relatives, but sometimes from absentee investors in farmland.

Is consolidation a threat to farmers in the fertilizer industry?

The data shows that chemical, fertilizer and equipment markets are dominated by a small number of companies. If trends continue, this could be a problem because the largest companies tend to have the highest prices, which makes seed and chemical company consolidation a threat to farmers.


How does cropland consolidation occur?

Consolidation can occur through shifts in ownership, as operators of large farms purchase land from retiring operators of midsize farms.


How much GCFI did farmers have in 2015?

In contrast, farms with at least $1 million in GCFI accounted for 51 percent of all production in 2015, compared to 31 percent in 1991.


How many acres of cropland were there in 1987?

In 1987, more than half (57 percent) of all U.S. cropland was operated by midsize farms that had between 100 and 999 acres of cropland, while 15 percent was operated by large farms with at least 2,000 acres. Over the next 25 years, cropland shifted away from midsize and toward larger operations. By 2012, farms with 100-999 acres held 36 percent …


What livestock grazes on pasture?

Other livestock, such as sheep, goats, and horses, may also graze on pasture and range—but cattle are the major users of what amounts to nearly half of all U.S. farmland.


What is the role of large corporations in agriculture?

Large corporations do operate farms, particularly in poultry and hog production, but their primary role in agriculture is to coordinate supply chains through the provision of inputs to family farms, and by contracting with family farms to raise commodities.


What percentage of farms are family farms?

Family farms account for 99 percent of all U.S. farms and 89 percent of agricultural production, and we see no reduction in those shares over time. Even among the largest farms, those with at least $5 million in sales, family operations accounted for 78 percent of farms and 73 percent of production.


What has shifted over the last three decades?

Highlights: Agricultural production has shifted to larger farms over the last three decades. Technology has been the primary driver of this shift, which has been large and widespread across crop and livestock commodities. Despite the shift to larger operations, family businesses still dominate U.S.


Competition reform in Australia

The implementation of Australia’s National Competition Policy (the “Hilmer reforms”) over the period from 1994 to 2004 fundamentally changed Australian agriculture.


Industry consolidation

NCP fundamentally altered Australian industries’ degree of exposure to competition, in that it opened up the playing field to allow competition from within and outside of Australia.


Future challenges

The digital revolution that we have all experienced and participated in over the past decade is rapidly emerging as the next major challenge for competition policymakers and regulators alike, and the agriculture sector is at the forefront of this issue.


Conclusion

Earlier in my talk I discussed the amount of change that has been experienced in the Australian agricultural sector over the last two decades, and some of the impacts of that change.


Why did poultry farmers benefit from contracts in the 1950s?

In the 1950s, when there were more than a thousand companies, most poultry farmers benefited from such contracts because they were protected from price fluctuations. Now that four vertically integrated firms control 50% of the market, the terms of the contracts are much more favorable to the companies.


What are the negative effects of consolidation?

These include lowering incomes and purchasing power, limiting choices, and harming human, animal and ecosystem health.


Why is CR4 important?

The CR4 is important because economists suggest that when four firms control 40% of the market, it is no longer competitive. This means that the largest firms will have a disproportionate influence on not just the price of a commodity, but also the quantity, quality and location of production.


How many clusters of oligopoly are there worldwide?

Although predictions are very difficult, based on other industries that have formed global oligopolies rather than monopolies (such as automobiles, pharmaceuticals and oil) there are likely to be as few as four to six clusters worldwide. Effects Of Consolidation.


How many multinational corporations control GE crops?

Grain and vegetable growers may soon find themselves in a similar situation. Genetically engineered (GE) crops are controlled by just six multinational corporations, and the technology is being used as a tool to consolidate the seed supply.


What are the three processes of food production?

There are three processes by which this is occurring: 1) horizontal integration, 2) vertical integration . and. 3) global expansion. Horizontal integration refers to consolidation of ownership and control within one stage of the food system, such as processing, for one particular commodity.


Which supermarkets have organic products?

Fast growing natural foods chains such as Whole Foods (currently the 21st largest supermarket by sales10), Wild Oats and Trader Joe€™s have had success with their own brands of organic products, prompting mainstream retailers such as Kroger, Safeway, Piggly Wiggly and Harris-Teeter to introduce organic brands as well.


What was the consolidation of cropland?

The consolidation of cropland into larger farms was persistent over time and widespread across most crops and most States. Major consolidation in livestock production continued to affect dairy, hog, and egg production; in contrast, the cow-calf sector, along with associated pasture and rangeland, showed little consolidation. …


What is the shift of acreage?

The shift of acreage to larger operations has been widespread across nearly all crops. To track consolidation in specific crops, ERS researchers considered changes over time in the midpoint of harvested acreage for a crop. At the midpoint, half of all harvested acres of a crop are on larger operations and half are on smaller.


How many acres of corn were harvested in 1987?

In 1987, for example, the midpoint acreage for corn was 200 acres—that is, half of all harvested corn acres were on farms that harvested at least 200 acres of corn, and half were on farms that harvested no more than 200 acres. The corn midpoint increased steadily, and by 2017 had reached 685 acres. Embed this chart.


How many cows were in the midpoint in 1987?

Some shifts have been dramatic. For example, the midpoint for U.S. milk cow herds in 1987 was 80 cows. By 2012, the midpoint herd size had increased more than tenfold to 900 cows—and it increased again to 1,300 cows by 2017. Similar dramatic transformations continued to occur in egg layers and hogs.


When did pasture and rangeland shift?

As cropland shifted to larger operations between 1987 and 2017, pasture and rangeland moved the other way, shifting away from the largest farms and ranches toward smaller operations. Farms and ranches with 10,000 acres or more of pasture and rangeland held 43 percent of all such acreage in 2017, down from 51 percent in 1987, …


What is a midpoint for livestock?

For livestock feeding industries like broilers, turkeys, cattle feeding, or hogs, researchers used a sales midpoint based on the number of animals sold or removed from a farm or ranch during a year. For egg layers and cows, researchers used midpoint flock or herd inventories. Some shifts have been dramatic.


Is livestock consolidation episodic?

Livestock consolidation is episodic, and dramatic in some sectors. Source: USDA, Economic Research Service estimates compiled from USDA, National Agricultural Statistics Service, Census of Agriculture. Other livestock sectors, such as broilers and cattle feeding, showed substantial but more gradual consolidation.


Competition Reform in Australia


Industry Consolidation

  • NCP fundamentally altered Australian industries’ degree of exposure to competition, in that it opened up the playing field to allow competition from within and outside of Australia. This has increased the amount of competitive pressure within Australian industry, and promoted more efficient production practices, and the supply of goods and services…

See more on accc.gov.au


Future Challenges

  • The digital revolution that we have all experienced and participated in over the past decade is rapidly emerging as the next major challenge for competition policymakers and regulators alike, and the agriculture sector is at the forefront of this issue. Some sense of the significance of the digital revolution can be gained from the fact that in the second quarter 2017 Financial Times lis…

See more on accc.gov.au


Conclusion

  • Earlier in my talk I discussed the amount of change that has been experienced in the Australian agricultural sector over the last two decades, and some of the impacts of that change. For those of you hoping that the rate of change might slow down, I’m afraid you are going to be disappointed. Some are already referring to the digital revolution we are seeing emerge in agricu…

See more on accc.gov.au

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