[codingdave]

You are assuming that the markets and economy even play a role in small scale agriculture. Most people I know who do small scale do it for themselves only. The cost at the stores is irrelevant when you just step outside and grab free food.

Also, the cost of produce at your stores is more about the cost of transportation. The current cheap gas prices are due to fracking, which in turn produces wells which taper off far faster than traditional drilling. That will end, and prices will go back up. And food costs will increase. Just like they did back when gas was twice its current cost. Even in the past few years, there have been specific shortages in commercial ag, such as eggs last summer, when many commercial chicken farms had problems with disease, which is another cost factor. Large-scale ag means large-scale transportation and logistics and THAT is where costs come from, not the labor cost of digging up dirt.

That is also why the micro-ag folks can undercut prices despite higher labor costs (if they even hire out labor at all) -- they sell locally, and their transport costs are minimal. Often as simple as throwing produce in your truck and just delivering it across town, or to a local market.

And on the labor question, the next 4 years may change costs if Trump really does cut down on illegal aliens. Wherever you stand politically, they are the source of cheap agricultural labor in the USA.

All of this does not mean that tech won't change things in the future - it very well might. But that same tech will be available to small-scale ag, so there is no reason to assume that production gains will only apply to commercial farming. The disruption that could change the picture is cheap, renewable energy propelling self-driving trucks.

[akiselev]

What is your source for transportation costs in agriculture? According to the USDA, transportation accounts for less than 5% of what consumers pay for food in the united states [1]. The farm itself and labor account for 60% of the cost so even if transportation accounts for 25% of the cost of fresh produce (the USDA data is aggregated over restaurants and grocery stores), it still wouldn't make up for the cost of losing the economies of scale. Without a critical density of farmers producing the same crop in a region, many of the cost savings in automation and distribution are simply out of reach. Agriculture needs these savings more than most because of razor thin margins and natural volatility in yield.

I shop from local farmers in California all the time but they are rarely as inexpensive as SuperKing or Vons except when their produce is in season and they cut out all the grocery store middle men like the produce stands peppering the California freeways. I know that a lot of our best produce is exported because the farther they travel, the higher the profit even when accounting for transportation costs, so Id be surprised if transport is ever particularly significant. The cost of energy (electricity and fuel for equipment) is also higher than cost of transport so fuel costs will have an impact regardless of how far you move the end product.

[1] https://www.ers.usda.gov/data-products/ag-and-food-statistic...

[codingdave]

Exactly which chart on that page you linked are you looking at?

I see nothing that matches the numbers you gave. The only one I see that even talks about farm costs vs. other costs shows the farms at just over 10%, not 60%. And this is 2016 data, not a historical comparison over years to see how the costs change as energy prices fluctuate.

[ska]

   You are assuming that the markets and economy even play a role in small scale agriculture.

Markets and economy play a role in nearly everything - they just aren't all the same markets, or the same effect. The mistake isn't thinking that there is a market effect, it is thinking that it is homogeneous.

[nl]

A lot less than you'd think. And we've known this since the 1970s

https://scholar.google.com/citations?view_op=view_citation&h...