Farm consolidation key to increasing yields

WINNIPEG, (MarketsFarm) – Consolidating farms – going from numerous small operations to fewer, but much larger farms -is central to improving crop yields, according to the grain industry’s Neil Townsend and Jason Newton.

Townsend is the chief market analyst for FarmLink Marketing Solutions, while Newton is the chief economist and head of marketing research for Nutrien. They discussed consolidation during the Big Picture Outlook at Grain World in Saskatoon, Sask on Nov. 28.

“The reason why yields have grown and people focus on yields, it’s what you can control, depending on the weather,” Newton said.

“Get big or go home is definitely an attitude in a lot of industries. I think farmers are investing lots of money and prices haven’t co-operated,” Townsend commented.

He cited a news report from Des Moines, Iowa, that stated “44 per cent of Iowa farmers have significant debt concerns.”

Newton attributed that situation, which has burdened farmers across the U.S., to increasing land prices that have driven up debt levels. Also, both speakers believe the United States/China trade war forced lower commodity prices on U.S. farmers. Townsend noted another factor, that of U.S. exports, such as for corn, have dropped because major importers have turned to other sources.

Townsend took note of the improved yields in Ukraine and Russia. He said Ukraine’s corn yields are increasing four to five per cent per year and Russia’s wheat yield have climbed to 80 percent of Canada’s. Part of that he said was the drought in the Black Sea Region that resulted in the loss of numerous small to medium farms, which were consolidated into larger operations.

Also, Newton gave credit to the higher yields in both countries to efficient use of fertilizers, especially nitrogen

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