It’s a dreary day here in Uppsala, perfect for spending the day catching up on work, news and listening to podcasts. If the same can be said for your current location, I have a suggestion for you!
Planet Money just rebroadcast a really interesting podcast on the reality of dairy farming in the US. They are well-known to put complicated economic realities into really simple but fascinating stories, and it is no different with this episode. The general topic is how businesses can survive in today’s fast-paced economy. Adam Davidson gives 4 general rules:
1. Stay on top of technological change.
2. Focus and specialize in the things you can do best.
3. Find a way to buffer and protect yourself from unexpected changes and risks.
4. Find something you can provide – a product or service – that your customers will pay a premium for because you have given them something they want that nobody else can give them.
Then, he applies these principles to Fulper Farms, one of the last remaining family-run dairy farms in New Jersey. Spoiler alert – despite following all the four rules mentioned above, the Fulpers still earn less than minimum wage if you consider the hours they put in on the farm. But at least they survive (and continue to do so) while a lot of other small farms are floundering.
I remember listening to the original broadcast in the summer before I started my agricultural economics Master (having only vague notions of how farming works nowadays) and being blown away to hear how industrial the entire approach is – the talk of technology (embodied in the “bio-architecture” of the cows’ bodies), the need for specialization and integration along the supply curve, and it was also one of the first times I heard of futures commodity markets where you can trade wheat and milk contracts like you trade stocks of companies. At the same time, even if you have quite some insight on these issues, it’s great to think about them in this meta-framework of economic change. I can only recommend it!