Production vs. Profitability

Technology has made it possible for us to nearly double agricultural production in the last 60 years.   That is quite impressive until you realize our net profits have decreased during the same time period.   How can that be?   The cost of our inputs has increased much faster than the prices we receive.   Consequently, today’s status-quo producers are working harder and harder for less and less pay.

 

I have talked to many producers and so-called “experts” within the beef industry – and I have yet to find anyone who believes this trend will not continue.   A cow-calf producer’s net profits are becoming more and more dependent on inputs – or lack thereof – than on anything else.   Producers who are unable and/or unwilling to substantially reduce and eliminate inputs are slowly but surely going broke.