Is Harmful Integration

HELLO FOLKS — One of the farmer's biggest enemies as far as hurting his income, today, is the feed company that has gone into the financing business and aims to tie the farmers into a program that assures the company of a ready market for their products.

Such firms started with the broiler business and from that went into egg raising. I have an idea that they are mostly responsible for the plight the turkey raisers are in today.

Now they are in the swine business. They encourage the farmers to go heavily into debt on a big setup that will keep him tied down for years.

They paint a big glowing picture of the huge profits to be made under such a program. They take what amounts to the most favorable years there are and use these as an example to convince their prospective victims of the advantages of using their program.

Naturally the feed companies are interested in their own well-being. The sharecropper, for that is what the farmer becomes, takes the risk. The fact that these companies are still hard at it is proof enough that they are coming out alright on it. What is bad is that it upsets the supply-demand balance and causes hardship to the whole industry.

Wherever and whenever these companies have have gone into this program they have ruined the markets. I think it is well for anyone interested to be very cautious about going into these programs. It is best to use local credit, start a little smaller and be more sure of doing the right thing.

I think it would be well for farmers to do business with companies that have not gone into the finance business and thereby are not injuring the farmer financially. There are lots of good brands of feeds on the market and it is easy to find one as good and perhaps cheaper than the ones who follow the integration pattern.

These companies are hitting heavily on swine integration now. A lot of this pressure is being done outside the regular swine raising area, probably because it is easier for them to convince their prospective customers where they know less about it. If they have as much success with this venture as they have had with broiler, eggs and turkeys we are in for trouble here in another year or two. This is apt to come at a time when the market is in it's bottom anyway.

This reminds me of the time when the farm implement companies went into the business of convincing the farmer to switch from horses to tractors. They encouraged the homesteaders to plow up the prairie sod and plant crops, showing with glowing pictures how much more could be made that way than by grazing the land. The farmers and many ranchers bit on it and spent years in bankruptcy. The dealers had taken the farmers' and ranchers' horses as down payment on the machinery. Then when the land started to blow and the added supply on the market broke the price the farmers were in a pitiable condition. The dealers and companies, for many years, had equipment on hand that they could not dispose of.

This all took place about the time that row crop tractors came out and probably had a lot to do with precipitating the big depression.