Farms

[Lammie]

I hate it too.

 

[cmjust0]

Just four days ago, a 38,000 acre property around here, went for 16 million.

If my currency conversion and math is correct, that's $353USD/acre..

Land in my neck of the woods seems to be going for about $3000-$3500USD/acre, if it's any good at all. Even the cedar/clay/limestone tracts are $2500+USD/acre.

For a little perspective, you need about 2-1/2 acres to the pair in this area.. Averaging at $3250/acre, it would cost about $8125 to put grass under a pair. Given that it seems like most folks figure on netting about $100/pair/year, it would seem to take about 81 years to pay for the land with cattle alone.

Not exactly a great ROI..

 

[backhoeboogie]

For a little perspective, you need about 2-1/2 acres to the pair in this area.. Averaging at $3250/acre, it would cost about $8125 to put grass under a pair. Given that it seems like most folks figure on netting about $100/pair/year, it would seem to take about 81 years to pay for the land with cattle alone.

Not exactly a great ROI..

Sort of, but that is fuzzy math. The $100 per cow includes land, fence, and/or lease expense. That $100 per cow is profit. If you take that $100 and spend it on land, there is no profit.

Think of it this way. Lease 100 acres for $5K and put 50 head on it. At the end of the year you have only broken even with your math because you spent the entire $100 per head "profit" on lease. Hence, you need to make $200 per head (of your profit "netting") in order to actually NET that $100 per head that everyone is striving for.

 

[PeaceCountryCowboy]

It is becoming impossible for younger people to start up. Between being able to get a job doing just about anything else and making more money, to the cost of everything needed. Million dollars doesn't even begin to scratch the surface anymore and really if you had that kinda money, cattle's the last place any sain person would put it. The only young people I know doing it have side jobs in the oilfield that support their cattle habit.

 

[GMN]

It is becoming impossible for younger people to start up. Between being able to get a job doing just about anything else and making more money, to the cost of everything needed. Million dollars doesn't even begin to scratch the surface anymore and really if you had that kinda money, cattle's the last place any sain person would put it. The only young people I know doing it have side jobs in the oilfield that support their cattle habit.

I know you can start up for far less than a million dollars, we sure did, but it takes time to do it, years and years, of building the herd up, establishing yourself, etc... If you jump into it and buy new everything, plus your cows, no way will that work, but over time it is still possible.

GMN

 

[Earl Thigpen]

I've posted about this before, some of you may remember. My Aunt's (my Grandfathers land) land sold three years ago. Not much land - 46 acres - and she got less than $90K. The place had a house, barn, huge garage, water well, cross fences, etc. (and mineral rights). Aunt passed away last November and the land is up for sale again only this time the new owners want $250K. You know the sad thing? Some fool will probably buy it for that price - as an investment.

If you do run across young folks who want to farm and ranch they can't afford it. It's lose-lose. But that's OK, we can buy food from China and wonder if what we're eating isn't poisoning us.

 

[circlet]

some of you are saying that the younger ones don't have the interest, well personally i'd probably sell a kidney if i thought it could get me into farming or ranching! it's been all i've ever wanted to do but evidently it hasn't been God's plan for me (to this point at least). my farmer grandpa died when i was too young to take over so his life of hard work went by the wayside, and my father-in-law rancher has 4 sons who are in line way before i am in the inheritance pecking order

having a case of sour grapes leads me to pay alot of attention to what goes on around me in the ag world though (plus i still work in the cattle industry) and in my small portion of the world it seems to me that alot of guys who inherited well and who got a few breaks along the way - from people who valued them as a person and valued the agricultural professions - most of these same guys have forgotten where they came from and aren't really very willing to give back to us in the next generation. don't get me wrong, i'm not looking for handouts, but a perfect example is my brother, he worked for a guy for many years, the story told was always "if it weren't for the kindness and generosity of a few people, i wouldn't be a farmer, so i want to help a young guy out" well, last year, when it was time for my brother's boss to hang it up and rent out his land, do you think he gave my brother a shot? nope...it went to one of the big guys who get's hundreds of thousands in subsidies and who could buck up and pay a ridiculous cash rent. my brother's boss was then confused as to why my brother quit him and went to work in town? that is a pretty common story around my area. in complete honesty, i could give you 3 more examples just off the top of my head.

the farming culture in illinios and iowa in particular has really went this direction. i read that in 2004 the average farmer in illinois made $65k, i know it's rare to find a farmer around here without a brand new chevy 2500 every other year and a house in the ozarks or in minnesota. the "freedom to farm" act that our wonderful politicians gave us has basically squeezed out any family farmers and young farmers trying to start out on their own because you have farmers getting literally millions of dollars in subsidies (not making that up, look at this website http://farm.ewg.org/farm )

I know I probably sound like a crybaby, I'm really not. I fully realize that this is a tough old world and no one gets just exactly what they want. I also know the temptation for many to cash in big on their property is probably very strong. But the normal human tendency towards greed, coupled with the lending environment finishes the deal on someone trying to break into ag or expand their small operation. How in the world does anyone come up with 25% down on a large farm or ranch? that boggles my mind actually! I've really wondered what the next generation of farmer/rancher will look like, I think they will simply be hired hands at best, with not much real chance to work for themselves and build something for their families. I know I haven't figured out how to crack into the biz like I've wanted to, so if any of you have a ranch somewhere west of the missouri river that you wanna sell to someone who'll use it to grow cows, hay and kids and will keep the young yuppies and old hippies away let me know!! :cboy:

 

[PeaceCountryCowboy]

I know you can start up for far less than a million dollars, we sure did, but it takes time to do it, years and years, of building the herd up, establishing yourself, etc... If you jump into it and buy new everything, plus your cows, no way will that work, but over time it is still possible.

GMN

Well to start up an operation here that's going to be profitable that's pretty much what you need and that's not buying anything new. Many places for just the land alone you're looking at over a million. Our neighbour's place that I looked into was asking 1.4m for his place. Beautiful place and would make a profit but let me tell you how hard a banker would laugh at me asking to borrow that to raise cattle :lol: . Even quarter sections with a house are going for 800k in some areas.

 

[GMN]

some of you are saying that the younger ones don't have the interest, well personally i'd probably sell a kidney if i thought it could get me into farming or ranching! it's been all i've ever wanted to do but evidently it hasn't been God's plan for me (to this point at least). my farmer grandpa died when i was too young to take over so his life of hard work went by the wayside, and my father-in-law rancher has 4 sons who are in line way before i am in the inheritance pecking order

having a case of sour grapes leads me to pay alot of attention to what goes on around me in the ag world though (plus i still work in the cattle industry) and in my small portion of the world it seems to me that alot of guys who inherited well and who got a few breaks along the way - from people who valued them as a person and valued the agricultural professions - most of these same guys have forgotten where they came from and aren't really very willing to give back to us in the next generation. don't get me wrong, i'm not looking for handouts, but a perfect example is my brother, he worked for a guy for many years, the story told was always "if it weren't for the kindness and generosity of a few people, i wouldn't be a farmer, so i want to help a young guy out" well, last year, when it was time for my brother's boss to hang it up and rent out his land, do you think he gave my brother a shot? nope...it went to one of the big guys who get's hundreds of thousands in subsidies and who could buck up and pay a ridiculous cash rent. my brother's boss was then confused as to why my brother quit him and went to work in town? that is a pretty common story around my area. in complete honesty, i could give you 3 more examples just off the top of my head.

the farming culture in illinios and iowa in particular has really went this direction. i read that in 2004 the average farmer in illinois made $65k, i know it's rare to find a farmer around here without a brand new chevy 2500 every other year and a house in the ozarks or in minnesota. the "freedom to farm" act that our wonderful politicians gave us has basically squeezed out any family farmers and young farmers trying to start out on their own because you have farmers getting literally millions of dollars in subsidies (not making that up, look at this website http://farm.ewg.org/farm )

I know I probably sound like a crybaby, I'm really not. I fully realize that this is a tough old world and no one gets just exactly what they want. I also know the temptation for many to cash in big on their property is probably very strong. But the normal human tendency towards greed, coupled with the lending environment finishes the deal on someone trying to break into ag or expand their small operation. How in the world does anyone come up with 25% down on a large farm or ranch? that boggles my mind actually! I've really wondered what the next generation of farmer/rancher will look like, I think they will simply be hired hands at best, with not much real chance to work for themselves and build something for their families. I know I haven't figured out how to crack into the biz like I've wanted to, so if any of you have a ranch somewhere west of the missouri river that you wanna sell to someone who'll use it to grow cows, hay and kids and will keep the young yuppies and old hippies away let me know!! :cboy:

In answer to how can I get into farming? My suggestion to you is find someone, a retired dairy person, or someone who owns a chunk around you that lives n another state, and wants to sell, get in with a land contract with them for say 10 years, then find yourself a great Bank, and lending officer, who will lend you money for this and that, and start from scratch and go from there. Build up your herd as you go, buy young calves, renovate a existing structure for a barn, do most all your own work, get it Grade A, go to farm auctions, buy used equipment, buy young heifer calves, raise them up, keep your costs down, and after about 10 years or so you will be on your way. Mind you, it will take time, and dedication, and scrimping, things will not always go right, so don't be too hard on yourself, and have fun.

Gail

 

[circlet]

some of you are saying that the younger ones don't have the interest, well personally i'd probably sell a kidney if i thought it could get me into farming or ranching! it's been all i've ever wanted to do but evidently it hasn't been God's plan for me (to this point at least). my farmer grandpa died when i was too young to take over so his life of hard work went by the wayside, and my father-in-law rancher has 4 sons who are in line way before i am in the inheritance pecking order

having a case of sour grapes leads me to pay alot of attention to what goes on around me in the ag world though (plus i still work in the cattle industry) and in my small portion of the world it seems to me that alot of guys who inherited well and who got a few breaks along the way - from people who valued them as a person and valued the agricultural professions - most of these same guys have forgotten where they came from and aren't really very willing to give back to us in the next generation. don't get me wrong, i'm not looking for handouts, but a perfect example is my brother, he worked for a guy for many years, the story told was always "if it weren't for the kindness and generosity of a few people, i wouldn't be a farmer, so i want to help a young guy out" well, last year, when it was time for my brother's boss to hang it up and rent out his land, do you think he gave my brother a shot? nope...it went to one of the big guys who get's hundreds of thousands in subsidies and who could buck up and pay a ridiculous cash rent. my brother's boss was then confused as to why my brother quit him and went to work in town? that is a pretty common story around my area. in complete honesty, i could give you 3 more examples just off the top of my head.

the farming culture in illinios and iowa in particular has really went this direction. i read that in 2004 the average farmer in illinois made $65k, i know it's rare to find a farmer around here without a brand new chevy 2500 every other year and a house in the ozarks or in minnesota. the "freedom to farm" act that our wonderful politicians gave us has basically squeezed out any family farmers and young farmers trying to start out on their own because you have farmers getting literally millions of dollars in subsidies (not making that up, look at this website http://farm.ewg.org/farm )

I know I probably sound like a crybaby, I'm really not. I fully realize that this is a tough old world and no one gets just exactly what they want. I also know the temptation for many to cash in big on their property is probably very strong. But the normal human tendency towards greed, coupled with the lending environment finishes the deal on someone trying to break into ag or expand their small operation. How in the world does anyone come up with 25% down on a large farm or ranch? that boggles my mind actually! I've really wondered what the next generation of farmer/rancher will look like, I think they will simply be hired hands at best, with not much real chance to work for themselves and build something for their families. I know I haven't figured out how to crack into the biz like I've wanted to, so if any of you have a ranch somewhere west of the missouri river that you wanna sell to someone who'll use it to grow cows, hay and kids and will keep the young yuppies and old hippies away let me know!! :cboy:

In answer to how can I get into farming? My suggestion to you is find someone, a retired dairy person, or someone who owns a chunk around you that lives n another state, and wants to sell, get in with a land contract with them for say 10 years, then find yourself a great Bank, and lending officer, who will lend you money for this and that, and start from scratch and go from there. Build up your herd as you go, buy young calves, renovate a existing structure for a barn, do most all your own work, get it Grade A, go to farm auctions, buy used equipment, buy young heifer calves, raise them up, keep your costs down, and after about 10 years or so you will be on your way. Mind you, it will take time, and dedication, and scrimping, things will not always go right, so don't be too hard on yourself, and have fun.

Gail

thanks Gail, I appreciate the advice. That kind of is my plan in one form or another, I just need about 3 more years of working for "the man" to get rid of some debt so I can take the pay cut to go work for someone. The hard part is finding that right person who is willing to enter into the agreement, like I said before, I know it has to be a great temptation for people to sell out and take the big chunk of change all at once. But, things work out like they're supposed to, so hard telling what's coming down the road. But I do appreciate you taking the time to share some advice.

 

[backhoeboogie]

If you do run across young folks who want to farm and ranch they can't afford it. It's lose-lose. But that's OK, we can buy food from China and wonder if what we're eating isn't poisoning us.

So you suppose it is the lifestyle and not the trade, that is selling?

People pay $10K a year to deer hunt or more and think nothing of it. When you add in the cost of the vehicles, gear - lease, it is amazing. But for them, it is not much different than going on a cruise or something.

People are wanting to raise families on a "farm" and buy a few acres and get cows. There was a time when practically everyone knew everything there was to know about animal husbandry. Now everyone wants to call a vet. Think about horses and how they were the mode of transportation. Back then trimming hooves was kind of like changing oil.

 

[ETF]

Gail said "find yourself a great Bank, and lending officer". What is everyone using for financing? Down here, I was unable to find a conventional bank that would finance more than 20 acres and they required 40% down for that. I'm going through Farm Credit. They only required 20% down :roll: but the interest rate is 8.25%. It's killing me. The only way I could buy my property was to sell my house plus invest everything I had saved from 20+ years of working. I'll make it through but cannot imagine how the younger folks could get into farming unless they inherit the land.

 

[GMN]

Gail said "find yourself a great Bank, and lending officer". What is everyone using for financing? Down here, I was unable to find a conventional bank that would finance more than 20 acres and they required 40% down for that. I'm going through Farm Credit. They only required 20% down :roll: but the interest rate is 8.25%. It's killing me. The only way I could buy my property was to sell my house plus invest everything I had saved from 20+ years of working. I'll make it through but cannot imagine how the younger folks could get into farming unless they inherit the land.

We started out with a land contract, after 10 years, we bought another 80 acres, and then refinanced with a local bank on a 15 year adjustable mortgage. We have a great Banker, gives good advice, and sometimes I do think he thinks we are nuts for staying in farming. Over the years we have taken out notes, for seed, fertilizer, catch up money on feed bills, you name it we done it, and we have managed to pay them off in time.
I know other people who have gotten in with Farm Credit or FHA and its not good how it ends up. They give you money freely, yet what you end up paying goes mostly for interest, and very little on principal, so you can see how that ends up very badly for the family farm.

Of course every situation is different, we have an outside good income, without that, our dairy farm would not be possible.

Gail

 

[bigbull338]

you have worked for what you have thats for sure.my dad started out with 77acs.with that start he built a dairy an new house.started out with 80 cows.an bought 314acs over the years.an he would work 18hrs a day because he loved working.along with the dairy he had dump trucks that he kept working.so the truth is if you want it .you work for it.

 

[rockridgecattle]

it is hard to start farming. My husband and i moved to his family farm with the understanding of taking it over. We've bought and are paying for machiery that is older than most farmers. We have bought land from an old fella that passed away in 2006. We have not bought his parents land becasue they are afraid we will loose it to the bank so they are holding on to it.
We are 40yrs old, home quarter is where we live and the main base of operation...will they sell it to us or will we have to buy it from the non farming sibling...unsure. there is more programs to help with farm transitioning but...a rant sorry..
Both my husband and i work off farm to make ends meet. He got laid off just recently. We have chickens to pay for groceries and a load of honey bees that will supplement his layoff. We also sell fire wood on the side to clear land. We work our tails off, and right now we are unsure of where to go. I have never been this "poor" before because of working so hard.
In our area there are fewer younger farmers than us. The majority of the farmers are 65+ with no generation to pass it on to.
Kinda sucks :shock:

Edit we have been here for over a decade

 

[ChrisB]

Here's an example of 2 neighbors I know. Both said they wanted to farm more than anything. That was 10 years ago.

"Bill" would only farm if he could be a "real" farmer. He had an entire line of machinery picked out that he would need to get started. He would also need a minimum of 500 acres to get started. Our area is rapidly being developed like so many other areas with the majority of farms being 80 acres or less and going from 0 to 500 acres even renting would be nearly impossible. Today Bill is still working at his job in town, dreaming of someday being able to farm.

"Bob" on the other hand decided to start with the first 40 acres he could pick up. He bought small cheap equipment that no body else wanted anymore because it was too small for today's farming. He kept his job in town bu he spent a lot of time going door to door picking up small fields all around the county and helping neighbors every chance he could. Every year he picked up more and more acreage and was able to improve his machinery line to match. Today Bob is running close to 2000 acres and by all indications he is doing well.

This just shows that if you want something bad enough you will find a way to do it even if it. Bill let his pride get in the way and didn't want to ever be called a hobby farmer or drive outdated equipment. Bob did what he needed to do.

You can say it's impossible to start out farming or ranching now days and say you are trying your best to achieve that dream. But say you are told that you need to be farming within the next 5 years or your child is going to die; now how hard are you going to try? Point being it's easy to say you are giving 100%, but when your back is to the wall you will then realize that what you thought was 100% was really only 50%.

 

[backhoeboogie]

so the truth is if you want it .you work for it.

That is it in a nutshell. For anything you want.