Farm crossroads

[hurleyjd]

Thanks for the advice everyone!

There are more factors to consider. One is age it happens to all of us do you want to be a slave to the land. Every day you get older the more harder the farm job will be. Look around a lot of people are living without cows or land. I am in the same situation myself. I have more land than I can take care off. A lot of things can happen on the farm that will take you away from things you might be planning to do. Use your head when making the decision instead or your heart.

 

[True Grit Farms]

Question I would have is if your making a profit why would you not reinvest those dividends to pay for what you need. You both have public jobs so if you sell out you get no revenue so your obviously not depending on the income.

We are making a small profit compared to what new equipment would cost. It would take years to pay for the equipment with what we make, even thought it is a nice yearly sum of "extra cash."

I guess I should clarify that when I said sell out, I meant sell farm and all. That would be a nice chunk of change.

You are correct, we are not depending on the income, and we are not in debt. So, does it make sense for us to invest anything more or just sell out while we are ahead? That's what we are pondering.

From what I've read in some of your other posts, if I was you I'd just sell out and move on. Cows and farming are passion and needs a commitment from you to the animal and land. It's really hard to keep something that was given to you in this day and age. Probably has something to do with education, and lack of work ethics. IDK

 

[Bright Raven]

There are many producers at this decision point. I tend to agree with Grit. If it is not a pleasure there is not much incentive to do it.

Joe makes good points but no cattle operation runs itself. My neighbor and I have just finished loading his two bulls that were loose. One on the highway. He is 62 and it has been a tough 24 hours for him. Worried all night about someone hitting the bull on the highway or him doing property damage.

It takes a lot of commitment.

 

[TennesseeTuxedo]

There are many producers at this decision point. I tend to agree with Grit. If it is not a pleasure there is not much incentive to do it.

Joe makes good points but no cattle operation runs itself. My neighbor and I have just finished loading his two bulls that were loose. One on the highway. He is 62 and it has been a tough 24 hours for him. Worried all night about someone hitting the bull on the highway or him doing property damage.

It takes a lot of commitment.

And good fences.

 

[Bigfoot]

Land is scarce. Keep the land no matter what.

 

[Craig Miller]

Any chance of buying him out? Herd and land. Or even just the land and sell his half of the herd.

 

[farmerjan]

It hasn't sounded that you are "IN LOVE" with the farm or the "farming way of life" from other posts that I have seen. So I have a suggestion if no one in your family, children or grandchildren, even nieces or nephews is interested in the place. Find some young person that REALLY wants to farm; has the fire in their belly, and either lease it with a buyout plan, or sell it outright to them with you and your brother holding the mortgage and getting a yearly income. That way there won't be the capital gains taxes, you will have a yearly income that you can put in a Roth IRA if nothing else and your children can benefit from it after you die since there is no minimum age to have to take it out..... There are ways to do it if you don't want to farm it anymore. And maybe some young person will be able to get a start. If something dire happens to them, it can be set up as mortgage holders that you would get it back and then it could be sold conventionally.

I have always regretted that my family did not care enough to want any of us to carry on the farming tradition. My son and I have worked our butts off to establish our own farming life and have listened to several different ones over the years, deride us for all the hard work for no big money gain. You have to love it, some days hate it, sometimes just say 'why are we doing it?', and then keep on keeping on. We would have given our eyeteeth to have had some family support, or an older farmer that cared enough to not want it to get developed and given us a little break. We made our own, and some days we still wonder if it is worth it, but we mostly believe it is. And we hope to find someone who will believe in it as much, to pass it on to, if he never finds the right girl to marry and have kids with. My nieces and nephews are all into money and "things" way too much.... I may hurt and feel the hard years but I am mostly content when I see a new calf or a field of nice hay waiting for me to get raked and baled. And I "became" a southerner by adoption to realize these dreams.

 

[TennesseeTuxedo]

It hasn't sounded that you are "IN LOVE" with the farm or the "farming way of life" from other posts that I have seen. So I have a suggestion if no one in your family, children or grandchildren, even nieces or nephews is interested in the place. Find some young person that REALLY wants to farm; has the fire in their belly, and either lease it with a buyout plan, or sell it outright to them with you and your brother holding the mortgage and getting a yearly income. That way there won't be the capital gains taxes, you will have a yearly income that you can put in a Roth IRA if nothing else and your children can benefit from it after you die since there is no minimum age to have to take it out..... There are ways to do it if you don't want to farm it anymore. And maybe some young person will be able to get a start. If something dire happens to them, it can be set up as mortgage holders that you would get it back and then it could be sold conventionally.

I have always regretted that my family did not care enough to want any of us to carry on the farming tradition. My son and I have worked our butts off to establish our own farming life and have listened to several different ones over the years, deride us for all the hard work for no big money gain. You have to love it, some days hate it, sometimes just say 'why are we doing it?', and then keep on keeping on. We would have given our eyeteeth to have had some family support, or an older farmer that cared enough to not want it to get developed and given us a little break. We made our own, and some days we still wonder if it is worth it, but we mostly believe it is. And we hope to find someone who will believe in it as much, to pass it on to, if he never finds the right girl to marry and have kids with. My nieces and nephews are all into money and "things" way too much.... I may hurt and feel the hard years but I am mostly content when I see a new calf or a field of nice hay waiting for me to get raked and baled. And I "became" a southerner by adoption to realize these dreams.

Nicely put farmerjan.

 

[herofan]

It hasn't sounded that you are "IN LOVE" with the farm or the "farming way of life" from other posts that I have seen.

You are not the first to mention that; I'm not sure what I have said to indicate that, but you are probably correct.

The thing is, I'm probably not "in love" with any kind of material thing. I don't live and breathe cows, but then again, I don't live and breathe anything. There is very little I would do on a large scale if I weren't getting some type of positive outcome.

On the other hand, I would hate to see the land go. I'm sure it would be a sad day if we sold it

 

[farmerjan]

Yes there needs to be some kind of positive outcome from doing anything, be it a small or large scale; but farming takes a real love of it to stick with it on the long term, whether the positive outcome is monetary or just personal satisfaction.

Being in love with the farm and the daily personal satisfaction in the little things makes it worth it to most of us. It's not the owning more tractors, bigger equipment, or any of that. It's being able to breathe the air, look at what you have accomplished and feel that you have contributed to the betterment of the land and the animals. Yes we farm for a living, and have full time "town jobs" so that we can farm, but deep inside I hope that I am giving back to the land and the future generations. We do not inherit from our ancestors, we borrow from our children and if somehow I can do something positive for the future, I am satisfied that I have done my small part.

Since you would hate to see the land go, but don't want to put into it what it takes to keep it going in a long term way, at least lease it to someone who can keep it up and get something in return for their work. We have several farms that we lease from older owners no longer able to keep them up, and just can't see themselves stuck in a retirement home or worse, but no one in the family wanting to farm it. The kids are all waiting to get what they think they are due when the parents pass on, but there is no love to hold on to it. Let someone try to keep up the place and when you are gone, it will be up to the next generation to decide if they hate to see it go or if they care what happens to it.

 

[True Grit Farms]

Yes there needs to be some kind of positive outcome from doing anything, be it a small or large scale; but farming takes a real love of it to stick with it on the long term, whether the positive outcome is monetary or just personal satisfaction.

Being in love with the farm and the daily personal satisfaction in the little things makes it worth it to most of us. It's not the owning more tractors, bigger equipment, or any of that. It's being able to breathe the air, look at what you have accomplished and feel that you have contributed to the betterment of the land and the animals. Yes we farm for a living, and have full time "town jobs" so that we can farm, but deep inside I hope that I am giving back to the land and the future generations. We do not inherit from our ancestors, we borrow from our children and if somehow I can do something positive for the future, I am satisfied that I have done my small part.

Since you would hate to see the land go, but don't want to put into it what it takes to keep it going in a long term way, at least lease it to someone who can keep it up and get something in return for their work. We have several farms that we lease from older owners no longer able to keep them up, and just can't see themselves stuck in a retirement home or worse, but no one in the family wanting to farm it. The kids are all waiting to get what they think they are due when the parents pass on, but there is no love to hold on to it. Let someone try to keep up the place and when you are gone, it will be up to the next generation to decide if they hate to see it go or if they care what happens to it.

Your on a roll Farmerjan, another great post.

 

[Bright Raven]

Since you would hate to see the land go, but don't want to put into it what it takes to keep it going in a long term way, at least lease it to someone who can keep it up and get something in return for their work. We have several farms that we lease from older owners no longer able to keep them up, and just can't see themselves stuck in a retirement home or worse, but no one in the family wanting to farm it.

Leasing in my area has more bad stories than good. It is a crap shoot. Nothing worse than giving away a portion of your control over to someone who disrespects your land and creates more problems than the money is worth.

 

[Jogeephus]

Since you would hate to see the land go, but don't want to put into it what it takes to keep it going in a long term way, at least lease it to someone who can keep it up and get something in return for their work. We have several farms that we lease from older owners no longer able to keep them up, and just can't see themselves stuck in a retirement home or worse, but no one in the family wanting to farm it.

Leasing in my area has more bad stories than good. It is a crap shoot. Nothing worse than giving away a portion of your control over to someone who disrespects your land and creates more problems than the money is worth.

Best solution to that would be to give your headache to me and I'll treat it with the utmost respect and relieve you of your burden. I'll insure the waters are clean and there is no erosion and the land is productive. As an added bonus, each year I donate a significant portion of my profits to provide free food, phones, healthcare and housing to those unwilling or unable to work. I also fund schools and teachers salaries and all this is made possible by simply adding value to sunlight and rainfall so its all natural and sustainable to a point. Why do I do this you ask? Might be cause I'm just a good feller or it might be because I haven't figured out a way to keep myself from doing this.

 

[Bright Raven]

Since you would hate to see the land go, but don't want to put into it what it takes to keep it going in a long term way, at least lease it to someone who can keep it up and get something in return for their work. We have several farms that we lease from older owners no longer able to keep them up, and just can't see themselves stuck in a retirement home or worse, but no one in the family wanting to farm it.

Leasing in my area has more bad stories than good. It is a crap shoot. Nothing worse than giving away a portion of your control over to someone who disrespects your land and creates more problems than the money is worth.

Best solution to that would be to give your headache to me and I'll treat it with the utmost respect and relieve you of your burden. I'll insure the waters are clean and there is no erosion and the land is productive. As an added bonus, each year I donate a significant portion of my profits to provide free food, phones, healthcare and housing to those unwilling or unable to work. I also fund schools and teachers salaries and all this is made possible by simply adding value to sunlight and rainfall so its all natural and sustainable to a point. Why do I do this you ask? Might be cause I'm just a good feller or it might be because I haven't figured out a way to keep myself from doing this.

That sums it up. :hat:

 

[WalnutCrest]

Variable stock densities ... a better idea than year round calving.

Cow / calf operation with a reasonably tight window ... with variable number of stockers depending on forage quality and quantity.

 

[True Grit Farms]

Variable stock densities ... a better idea than year round calving.

Cow / calf operation with a reasonably tight window ... with variable number of stockers depending on forage quality and quantity.

Stockers scare me on the bio - security side of things. You never know what kind of diseases you might bring into your herd. Year round breeding isn't for everyone, but it sure works good here in the south if you like making money.
Do you remember 2015? My fall calves averaged $400.+ a head more than my spring calves. That right there taught me to not put all your calves in the same market. You can have the tight calving window, I'll take the extra cash.

 

[Jogeephus]

Variable stock densities ... a better idea than year round calving.

Cow / calf operation with a reasonably tight window ... with variable number of stockers depending on forage quality and quantity.

I can see your point but I don't know how well stockers would fit with someone who has a regular job and limited time for cattle. Till straightened out, stockers can be pretty demanding on your time.

 

[dieselbeef]

im in cuz this is the best thread ever on here...ill die here. put every post and every nail in everything I look and see everyday. 19 yrs ago it was a dream. today ive got 14 calfs on the ground..cows just bought us a brand new Kawasaki mule. thye cant always pay their way without borrowing from me but they always pay me back....cept for my time....and I wouldn't have it any other way
idk if I could ever sell it..i could lose it somehow I guess. thought we were gonna when my wife passed this past summer. but things have turned for the better and we're doing ok.
how much history do you have there...
if youre managing to get by just keep doing what youre doing. you've gotten this far.
hard part seems to me like youre not a inclined to sell as your brother..or you wouldn't be asking for advice here....why does he want out?
couldn't you just keep it and not run cows on it. its paid for. if the work is the problem just do less..downsize.

 

[Son of Butch]

My brother and I currently have a 20 cow/calf beef herd on about 134 acres. Does anyone here have any suggestions?
I'm wanting suggestions purely from a financial standpoint.
I'm just looking at the financial aspect.

Consult with an Ag. Tax accountant for how much your brother and you can expect to NET after taxes from selling out.

Then you can plan on how you would invest that money.
Example:
Vanguard Total Stock Market Index Fund has averaged 9.3% return since 1992
The last 10 years it's averaged 7.37% return
It's lowest 5 year average return was 4.5%
lowest one year return was 2008 -36.99%
Highest one year return was 2013 33.52%
year to date as of 5/26/17 is 8.21%

You can reasonably expect to withdraw 6.5% per year with no loss to your principle balance.
Comparing current/previous and expected farm income performance to an alternative no work investment income
should help you and your brother to look at it from a realistic and purely financial standpoint.

 

[herofan]

im in cuz this is the best thread ever on here...ill die here. put every post and every nail in everything I look and see everyday. 19 yrs ago it was a dream. today ive got 14 calfs on the ground..cows just bought us a brand new Kawasaki mule. thye cant always pay their way without borrowing from me but they always pay me back....cept for my time....and I wouldn't have it any other way
idk if I could ever sell it..i could lose it somehow I guess. thought we were gonna when my wife passed this past summer. but things have turned for the better and we're doing ok.
how much history do you have there...
if youre managing to get by just keep doing what youre doing. you've gotten this far.
hard part seems to me like youre not a inclined to sell as your brother..or you wouldn't be asking for advice here....why does he want out?
couldn't you just keep it and not run cows on it. its paid for. if the work is the problem just do less..downsize.

The farm has been in the family for many years. My grandfather bought it from his relatives in the 1930s and farmed it as his only occupation until his death in 1987.

Because we did have a love of the land, we have retained it all these years, but we all have public jobs and are not full-time farmers; therefore, the land has been cowless at times, but we have currently had cows again since 2010.

We have gotten to the point that it is going to take some money to update things and keep going; however, since we are only hobby farmers and never plan to do it as a. If operation, we are wondering if it is worth the money.

My brother is not more inclined to sell, we have just been doing a lot of thinking out loud and I just thought I would ask for opinions here.

It still takes money to keep it up if it just sits there with no cows, and leasing can sometimes be a headache. It's bad enough sometimes just telling someone they can cut up a downed tree for firewood without some kind of drama before it's over.

Everyone has different financial personalities as well. There are savers, spenders, borrowers, you name it. I guess we aren't real big on having debt.