Ag Recession ?

[Stocker Steve]

Seeing some continued downward trends here. Several neighbors have sold their cows and rented out their land. Most tenants are not replacing the nutrients removed, and/or insurance farmers, so this is not sustainable... Neighbors then follow a year or two later with an equipment auction and/or a land sale. Basically cashing out over about a three year period.

Lenders are threating to cut off some credit lines after several years of no operating profit. I got a call this spring asking for leads on borrowing input costs against a promissory note. :help: This trade war will be the death of some.

Interesting thing is land prices are holding up due to a mix of old family money, optimistic deer hunters, and FSA Beginning Farmer loans.

Traditional thinking is that one should be looking for opportunities here. Do you see any for not beginning farmers?

 

[Bright Raven]

Good post.

Locally, all the farmers are aging - probably in their 60s. I cannot see incentives that will put younger farmers in their shoes.

I often wonder if I should cash out while there is some remaining market for farm land. Land prices are stagnant. The deer hunting market keeps marginal land almost as high as pasture land.

 

[Stocker Steve]

No need to replace farmers if other operations expand, or the land is converted to a hunting lease. Our hunting land is much higher priced than pasture land. At least a 25% premium.

We do have some young farmers expanding here. They are the third or fourth generation of families that are able to work together. They have never been to the city. They enjoy FWA cab tractors. Girl friends seem to be their biggest challenge.

Our extension agent's wife has a reputation for match making. i suggested sponsoring speed dating for farm hers (I would pay to watch this) but got shot down immediately.

 

[sim.-ang.king]

Maybe it's time the government gets out of Ag. They are the ones that have been proping up the prices of land rent and input cost. Getting rid of federal funds will cut input cost almost in half. Since the seed companies, and banks will no longer have the insurance of the federal government backing farmers.

 

[Bright Raven]

Girl friends seem to be their biggest challenge.

Our extension agent's wife has a reputation for match making. i suggested sponsoring speed dating for farm hers (I would pay to watch this) but got shot down immediately.

The girlfriend issue to not unique to farmers. I have been trying for 2 weeks to get four loads of gravel hauled. The trucker keeps putting it off because his girlfriend runs his life.

 

[Stocker Steve]

Maybe it's time the government gets out of Ag. They are the ones that have been proping up the prices of land rent and input cost.

Government subsidies increase the price of land. No CRP signup right now, but I expect that to change.

 

[Stocker Steve]

I searched for ag investment opportunity. I found land investments in Africa and Brazil. Which continent should I focus on?

 

[Bright Raven]

I searched for ag investment opportunity. I found land investments in Africa and Brazil. Which continent should I focus on?

Africa. I would look at Tanzania.

 

[Stocker Steve]

Green Hills of Africa?

(my Kudu is much much bigger)

 

[Bright Raven]

Green Hills of Africa?

(my Kudu is much much bigger)

Wonderful book. So many good books on Africa. Robert Ruark! Hemingway, etc

 

[Brute 23]

Seeing some continued downward trends here. Several neighbors have sold their cows and rented out their land. Most tenants are not replacing the nutrients removed, and/or insurance farmers, so this is not sustainable... Neighbors then follow a year or two later with an equipment auction and/or a land sale. Basically cashing out over about a three year period.

Lenders are threating to cut off some credit lines after several years of no operating profit. I got a call this spring asking for leads on borrowing input costs against a promissory note. :help: This trade war will be the death of some.

Interesting thing is land prices are holding up due to a mix of old family money, optimistic deer hunters, and FSA Beginning Farmer loans.

Traditional thinking is that one should be looking for opportunities here. Do you see any for not beginning farmers?

Their debt is killing them not policy. It was just a matter of time. The weak will get out and the strong will get stronger. That's basic business.

 

[Stocker Steve]

Their debt is killing them not policy. It was just a matter of time. The weak will get out and the strong will get stronger. That's basic business.

Yes, leveraging cuts both ways and it is difficult to earn your way out of a recession. Downsizing might work, but a government bailout is better. :banana:

The local sell outs here are not deep in debt. They don't have successors and don't think it is worth the effort to keep going... They are just tired. One was farming with his son - - when Dad said he had to quit due to health issues, the son sold out too. I think he is looking for a girl friend now.

 

[1982vett]

:2cents: Can't say this is a recession problem...agriculture has been on this path for a long time. Doubt anything will change in the near future.

 

[ALACOWMAN]

Their debt is killing them not policy. It was just a matter of time. The weak will get out and the strong will get stronger. That's basic business.

time to kick it back into hobby mode , and ride it out...

 

[Stocker Steve]

:2cents: Can't say this is a recession problem...agriculture has been on this path for a long time. Doubt anything will change in the near future.

Unfortunately, I think you are mostly correct.
A few are doing well with organic or direct marketing or seed stock.
The ethanol fueled boom jacked up a lot of commodity expectations, but I don't think E15 will bring it back.

 

[ddd75]

next year i'll be looking for a new farm. Hopefully $$$money will talk if land isn't as hot.

 

[Caustic Burno]

Good post.

Locally, all the farmers are aging - probably in their 60s. I cannot see incentives that will put younger farmers in their shoes.

I often wonder if I should cash out while there is some remaining market for farm land. Land prices are stagnant. The deer hunting market keeps marginal land almost as high as pasture land.

I was at an agriculture workshop couple years ago not one group of producers averaged under 60.
It was a TAMU workshop demographically they had it broke down no matter the commodity.

 

[Redgully]

I think you will end up like here in Australia, farms just keep getting bigger and bigger and the small ones can't compete. It's a double edged sword, a tractor aloud someone with 100 acres to farm 500. But instead of being better off all of a sudden he needed 500 acres to make the same as he used to on 100. Then new chemicals, bigger tractors, electricity, better breeding and better varieties etc and all of a sudden anything under 5000 acres and you are a hobby. But the bigger you are the harder you fall. Now all the small farms are looking for that niche and from what I have seen lots spend a lifetime trying to find it and when they do so does everyone else. The worst part is the big farms have killed local communities and caused a lot of isolation issues and suicide is now a major problem. It is our generations challenge and as it has happened so fast, maybe over 40 years, no one really has answers yet. They tried having quotas here with boards but people don't like being told they can't grow more. With the world turning to city dwellers who have no idea what life is really about I feel the organic movement is probably the way to go. That sort of feel good warm fuzzies city folk like. That would force farms to return to small operations because organic is hard work. But it isn't for me!

 

[sstterry]

next year i'll be looking for a new farm. Hopefully $$$money will talk if land isn't as hot.

400 ac farm with multiple barns and a big house going up for auction next to me next month (Estate-Federal Income tax sale). Should go pretty cheap and most of it is prime land. Ten years ago I would have been bidding, but now I am not sure I can make the commitment!

Shoot me a message if anyone is interested. Really nice farm with many buildings.

 

[haase]

It goes in cycles, just like other parts of our economy.