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Senior Advisor

Capital Or Labor

What is your tipping point on choosing capital or labor over the other?  If the profits and all else were equal, would you rather have one person making large round or large square bales or a team putting up small squares?  If you made the same amount of money, would you rather have 10 people in a greenhouse or just you on a large farm?

 

Is getting, accounting for, paying back and managing money to get the machinery easier to deal with or is it easier to get a few good hands and paying them to do the work?

 

My observation is that farmers will buy a bigger truck or combine and run it themselves rather than try to hire operators.  What is your experience around where you farm?

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29 Replies
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Honored Advisor

Re: Capital Or Labor

Jim, I think it depends. We have a very automated, capital intensive hog operation. Still, certain functions like vaccinating, powerwashing, etc., are hand labor.
Mike and I did it all ourselves when we started, almost twenty years ago. Impossible, without the systems and type of buildings we built. Now, finding one employee to assist our daughter is our biggest headache.

I think, given the culture of entitlement in our region, I would rightly opt for mechanization.
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Senior Contributor

Re: Capital Or Labor

I have one guy that works for me only because I live a few miles away from my farm. If I lived there I would try to get by with just harvest time help. I cut my own timber in the off season so that keeps us both pretty busy much year round.
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Senior Contributor

Re: Capital Or Labor

I'd take a machine. It'll be there on Monday morning without an attitude or hungover.
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Honored Advisor

Re: Capital Or Labor

There`s still a few olde tyme farmers that feel they need to hire help for everything short of tying their shoes, but yes most farmers look for any excuse to buy more machinery.  Getting good help has always been hard and it won`t be too long and if you don`t have driverless tractors   http://www.youtube.com/watch?v=YFy6ZAjbeew    you might as well be "wire check planting corn"  Smiley Happy

 

People really adopt technology, it used to be my trick to getting out of WallyWorld quickly was to go through the automated teller, because no one else did.  Now, last times I`ve been in there, they were lined up and I had to go through the human check out.

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Veteran Contributor

Re: Capital Or Labor

Any operation requires the right combination of capital and labor.  The machinery is always changing and it's a task just to keep knowledgeable on how it's run and then to be timely in running it.  If it's a one man operation and that man's down, there's a problem.  So having additional labor with multiple people knowing how to operate it is beneficial.  The employees take pride in learning the new and different, and there's some sense of peace in knowing there's someone else who can step in to run it in case of emergency.  Machinery today is complicated and farms operate as a system dependent on everything running smoothly.  Plus, sometimes more heads together make for better decisions.

 

But, no doubt it's becoming more difficult to find competent, reliable labor.  Employees are a necessary and beneficial part of our operation, but it can be a challenge to keep them busy year round.  We continually have a multitude of projects that are worked on. 

 

Furthermore, it's got to be the right blend of machinery and labor.  Man and machine, and man and man need to work good together or there's a problem.  Working with a machine requires a whole different set of skills than working with labor. Probably a main reason some choose one over the other.

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Honored Advisor

Re: Capital Or Labor

My observation & suspecion is there is not much labor in america.  Imported labor just keeps growing.

 

 

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Senior Contributor

Re: Capital Or Labor

Your observations are correct.  We hire mostly first generation hispanics.  They like to work.  Most younger generation americans don't like conditions that are too hot, too cold, too wet, too dry, too dirty, too clean, too many hours a day, not enough hours a week,  too much thought, too repetitive, blah, blah, blah,

I've got a friend that runs the Center for Rural Affairs in Nebraska.  He told me a long time ago that the country would reach a tipping point where the excess kids from family farms and small business were no longer dragging the rest of the workforce along.  I thought it was a little far fetched.  We are there.  

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Honored Advisor

Re: Capital Or Labor

I was the first accountant in my college class to be offered a position even though my early grades had issues.  And when I asked why me, the recruiter told me you are what we look for, a farm kid with a work ethic and communication skills, and there are too few of you left.  That was 1976.

 

 

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Senior Contributor

Re: Capital Or Labor

This is exactgly right. We had the daughter of some friends of ours that got a summer job at Disney World a few years back. She said she got the job because on her resume she listed "detasselilng seed corn." That led to an intersting converstion in her interview and showed she was willing to work hard.

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