New Tractor Sales Are Declining

[MinnesotaMorg]

I don't consider myself a farmer, but I'm trying to grow into it.

It's impossible to see how our future will play out, but if I was to guess I couldn't imagine I would ever own more than 150-200 acres, up from my current 55 acres. 200 acres is considered a small amount, with the average being 400+. I imagine since I don't currently rely on the incoming from farming I will never be considered a "real" farmer by many. That's okay, I'll keep trying and learning anyhow.

I guess what I'm trying to get at is there isn't any point in trying to define what a "real" farmer is. There are large farms where they farm 500 or 1000 acres or more, but there are also micro farms that do high tunnels or 1 acre pig farms, and everything in between. I think currently it is fair to call me a hobby farmer as I don't depend on the income from the land to live. But I think there is an obvious difference between a farm land investor, and a farmer. It sounds like all of the people you guys know are all farmers, in different situations, and with different side hustles and interests. It's certainly not typical to own a jet as a farmer, but it sounds like he has been a farmer his whole life and buying investment properties and luxuries doesn't make him any less of a farmer, he's just also a real estate tycoon.

 

[Yander]

I think one of the factors, regarding why you see small tractor sales tailing off and large tractors not declining, is the profile of the buyer.

Large tractors, larger farmers who need to buy an asset to depreciate to help manager their business.

Small tractors, homeowners, Wanna be farmers (like me ), guys who just like to be self sufficient and are getting older and don't want to lift anything they don't have to (also like me). I know that there are guys making a living with smaller tractors but I'm not sure that is a large percentage of small tractor buyers.

They are two entirely different demographics of buyer. The large tractor buyer doesn't have a choice, they are going to buy equipment and the threat of not being able to buy one, makes them a little anxious.

 

[Yander]

I 100% agree. I don't know anyone making money purely farming that spend enough time away from their farms to have recreational properties all across the world. I know many who have multiple farming properties across the country. Larger acreages are a key feature of profitable farming.

I know several who farm full time and they have Florida homes and spend the winter their. Some were grain farmers and one I know is a large hog farmer. He hires people to maintain the farm during the winter, in fact, he has a couple of full-time guys that work for him, not including his son who also works with him.

I think you need to realize there are different types of farmers. I know many types on a personal basis. Some of the farmers have the means to hire help and move to florida and yet they choose not too.

My father in law was a grain farmer. He had a condo in Florida and sold. But a grain farmer has the winter to stay away from home if they so choose. But they are absolutely a farmer. If I had the ability to take the winter and spend it away from my job and someone asked me what I did for a living, I wouldn't tell them oh I'm a hobby (fill the blank________________).

You don't know the farmers that I do. Though I do believe you that the farmers you know don't have recreational properties.

 

[Cahaba Valley Farm]

Sometimes looking back, and can’t believe I coached High School football and High school mens lacrosse for decades and still got my work done. There were times when I would watch opponents film while driving my truck on my I-pad, or coach a Friday night game until 12 AM, go home and sleep 4 hours, and get up for work the next day, bales out for cows or whatever had to be done.

Now that's what I call dedication there. Sometimes I wish more of you Yankees would move down here to the south because the work ethic in some of these parts is just down right pitiful. I'm afraid a lot of these folks in my neck of the woods don't even know how to spell the word work.

 

[Cahaba Valley Farm]

I don't consider myself a farmer, but I'm trying to grow into it.

It's impossible to see how our future will play out, but if I was to guess I couldn't imagine I would ever own more than 150-200 acres, up from my current 55 acres. 200 acres is considered a small amount, with the average being 400+. I imagine since I don't currently rely on the incoming from farming I will never be considered a "real" farmer by many. That's okay, I'll keep trying and learning anyhow.

If this government of ours doesn't stop all this frivolous, wasteful spending then we might all become "real farmers" by necessity and not by choice.

 

[Cahaba Valley Farm]

Came across this unexpectedly tonight when watching a documentary on YouTube. In the 1940's farming was an intuitional program at an old prison in Raiford, Florida known as "The Rock". You can hear about it at about 13 minutes into the video.

 

[scootr]

That was a great interview - I remember that Johnny Carson show!

 

[Hay Dude]

There’s also the segment that uses the word “farmer” to get his large land holdings significant property tax rebates. Its a tactic used by a lot of wealthy and famous people. Bruce Springsteen gets a lot of chatter in New Jersey for owning a “farm”.
Its a farm, but he’s no farmer.

 

[ArlyA]

I know several who farm full time and they have Florida homes and spend the winter their. Some were grain farmers and one I know is a large hog farmer. He hires people to maintain the farm during the winter, in fact, he has a couple of full-time guys that work for him, not including his son who also works with him.

I think you need to realize there are different types of farmers. I know many types on a personal basis. Some of the farmers have the means to hire help and move to florida and yet they choose not too.

My father in law was a grain farmer. He had a condo in Florida and sold. But a grain farmer has the winter to stay away from home if they so choose. But they are absolutely a farmer. If I had the ability to take the winter and spend it away from my job and someone asked me what I did for a living, I wouldn't tell them oh I'm a hobby (fill the blank________________).

You don't know the farmers that I do. Though I do believe you that the farmers you know don't have recreational properties.

Good post! Someone who understand what farming is. My brother-in-law, last time I asked him, had 7 year around employees but many more during harvest.

 

[Tomtint]

A year ago buying with cash was a bad idea. Rates are getting into the range that spending cash may be better. Holding cash is the worst thing to do in an inflationary cycle. Invest it or spend it. Every day you hold it, it loses value.

Im not 100% in agreement with this. While on its face, holding cash, one would think that it is losing value in a inflationary environment like we have now. ..But cash is always king. When things become unattainable due to high interest rates, That means things become harder to sell..Which means the guy with a pile of cash now has leverage. I have been through a couple recessions, Looking back now, During the warning time ( now ) i would hoard cash. Become as liquid as possible and wait it out until there is blood in the streets.
If you are the guy who can move quickly on the right deals when others are unable.. You can apply that leverage of having cash.

 

[ovrszd]

I know several who farm full time and they have Florida homes and spend the winter their. Some were grain farmers and one I know is a large hog farmer. He hires people to maintain the farm during the winter, in fact, he has a couple of full-time guys that work for him, not including his son who also works with him.

I think you need to realize there are different types of farmers. I know many types on a personal basis. Some of the farmers have the means to hire help and move to florida and yet they choose not too.

My father in law was a grain farmer. He had a condo in Florida and sold. But a grain farmer has the winter to stay away from home if they so choose. But they are absolutely a farmer. If I had the ability to take the winter and spend it away from my job and someone asked me what I did for a living, I wouldn't tell them oh I'm a hobby (fill the blank________________).

You don't know the farmers that I do. Though I do believe you that the farmers you know don't have recreational properties.

Couple years ago I was visiting with Doug and his wife. She's the book keeper of their operation. She said they feed 27 families. This morning they are cutting beans. 4 combines. 3 grain carts. 7 semis. 2 "bin" guys. 1 fuel hauler. 17 families making a living.

 

[Cahaba Valley Farm]

Im not 100% in agreement with this. While on its face, holding cash, one would think that it is losing value in a inflationary environment like we have now. ..But cash is always king. When things become unattainable due to high interest rates, That means things become harder to sell..Which means the guy with a pile of cash now has leverage. I have been through a couple recessions, Looking back now, During the warning time ( now ) i would hoard cash. Become as liquid as possible and wait it out until there is blood in the streets.
If you are the guy who can move quickly on the right deals when others are unable.. You can apply that leverage of having cash.

The funny thing about what he (Torvy) said is invest it but there isn't anywhere to invest it right now. The equities market is no good, the bond market is crashing, mortgages are going way up which prevents purchasing income producing properties in real estate or doing low interest rate construction loans and the dollar is getting stronger by the day. There are no safe havens right now but spending it will take away your opportunity to invest it later when opportunities present themselves.

 

[Hay Dude]

The funny thing about what he (Torvy) said is invest it but there isn't anywhere to invest it right now. The equities market is no good, the bond market is crashing, mortgages are going way up which prevents purchasing income producing properties in real estate or doing low interest rate construction loans and the dollar is getting stronger by the day. There are no safe havens right now but spending it will take away your opportunity to invest it later when opportunities present themselves.

Hang on a few months and there will be. We are in the holding pattern where the market is in a downfall, but the RE market and stock market hasn’t quite yet crashed.

 

[Hay Dude]

It's amazing what people "know" about another person they've never met!

Ain‘t that the truth.

 

[Torvy]

The best time to buy is when prices are low. When other people are dumping stocks, that creates opportunity for the wise.

After WW1, people in Germany tried to hold cash....here's an example of how that worked out.

 

[CloverKnollFarms]

I’m going to seize the opportunity…. This year I’ve already invested at what is about a 25% discount.

 

[TimberFarm]

Corporate profits affect inflation much like gnats affect an elephant.

Inflation is almost entirely a function of money supply. Corporate 'profits' are more an effect of inflation than a cause. The numbers are bigger, but costs rise for them, too.

I think in the coming months/years you will see profits fall and businesses fail as skilled workers continue to retire and consumers cannot afford to buy goods. There will always be some that do well in a downturn.

Their profits are through the roof because inflation isn't having the effect on them. If it was, their profits would be down.
Their cost's rise due to "inflation" and they just ramp up their prices more (causing more inflation) to keep their profits up.
It would be like a worker could raise their own wages to adjust for "inflation" as it effects them. Obviously they can't, so the worker bears the brunt.

 

[TimberFarm]

There’s also the segment that uses the word “farmer” to get his large land holdings significant property tax rebates. Its a tactic used by a lot of wealthy and famous people. Bruce Springsteen gets a lot of chatter in New Jersey for owning a “farm”.
Its a farm, but he’s no farmer.

Yes, Jersy has a low bar when it comes to being a "farm".
One ex-football player/Congressman had a "farm" of one or maybe two horses.
An ex-governor had wood land and if you "harvest" X cords a year, you are also a farmer.

 

[TimberFarm]

In all fairness Richard, I don't think this is the typical farmer. This is not to say all farmers are poor and struggling but they certainly aren't buying mansions and flying in jets around the world either.

Makes me wonder what his tax returns say as far as far as income sources.
Grain farmers also qualify for Uncle Sam's subsidies'. Grain farmer near where I lived always had nicest equipment, new silos, etc.
He also received on average almost $200,000 a year in subsidies from Uncle Sam. There is a website that lets you see who gets what in farm subsidies.

 

[ovrszd]

Makes me wonder what his tax returns say as far as far as income sources.
Grain farmers also qualify for Uncle Sam's subsidies'. Grain farmer near where I lived always had nicest equipment, new silos, etc.
He also received on average almost $200,000 a year in subsidies from Uncle Sam. There is a website that lets you see who gets what in farm subsidies.

Do you take advantage of every tax law?

Does anyone self employed take advantage of every tax law?

Of course we do. If not, we are naive.

Doug's operation has the equipment necessary to handle the volume of grain he harvests.

I am sure his operation qualifies for Millions of dollars in subsidies. I am sure he accepts them all. So would you.

If you live in the country and have fiber optics internet to your house you received a government subsidy. Funny how that works.