Mid-sized farms caught in a bind.

Mid-sized farms, those with sales of about $250,000 per year, are being squeezed more than smaller or larger farms by today's tight margins in farming, according to a recent report by Michael Moskow, president and CEO of the Federal Reserve Bank of Chicago.

Mid-sized farms face a difficult choice, whether to scale back operations or to expand into larger operations. Moskow said the farmer's predicament starts when he borrows money to purchase new technology, be it the manufactured fertilizers of the 1960s or GMO seeds today. Because investments lower unit costs and increase production levels proportionately faster than demand, commodity prices fall. This causes the farmer to have to borrow, invest and expand even more, heading down the path to success that requires him to expand his farming business to a size that enables him to continue investing in expensive new technology.