Farms disappearing at alarming rates

[Oz_Kioti]

You can't eat windows.

 

[D&D]

I believe Bill Gates is buying up US farmland at an incredible rate as well. What does he know that most people don,t ?

There is a finite supply of land and water. Whoever ends up with both will have total control of the population.

 

[Hay Dude]

Property value increases can have a dramatic affect on property taxes after title transfers too, especially in development heavy areas. Here's how I think the math would look for a person purchasing a small farm near me.

Buying a $1,000,000 farm with a mortgage at current rates in my township today would translate to paying approximately $3,000,000 in total principle, interest, and property taxes over the first 30 years of ownership. That's assuming taxable value is 1/2 purchase price and mortgage is in 6% range. The purchased property would basically have to generate $100,000 a year in free cash flow on average just to satisfy the bank and local government.

After those two monsters are fed, farming the place will also add the IRS, State income tax, utility providers, and insurance companies to the line of entities waiting for payments. Plus there will be ongoing needs for seed, feed, equipment, fuel, vehicles, maintenance and repairs of equipment and buildings. Plus some funding for food, clothes, and recreation for the family would be nice too.

In my county a $1,000,000 could get an 80 acre farm at best right now. So mathematically, each acre would probably need to yield around $3000 in annual gross revenue to cover anticipated farming costs and to pay for itself within 30 years.

Corn is the predominant crop nearby and it's currently around $4.20/bu. Making 200/acre (- drying and trucking costs) would gross around $800 per acre. Planting 70 acres in corn would =$56,000 annually if a 200 average can be attained. Soybeans may be closer to $900/acre for $63,000 annually with 70 acres at the current price. 70 acres of wheat might gross $35,000.

Livestock and the necessary infrastructure can be expensive to start and take a couple years to generate revenue. Poultry or egg production may be an option, but in my case a use permit is required and the township supervisor lives down wind. Things like that can slow the process way down.

Uh Oh! None of the normal farm activities would seem to cover the mortgage payments alone.

Owning the 80 acres without farming looks even worse in my township. They are a charter township now with a master plan that promotes development and suburban lifestyle living. Taxes are on a steady rise and would be hitting the new owner of this fictitious place for upwards of $20,000 by the 3rd year of ownership, with no revenue coming in to offset taxes. The one thing that could help with property taxes is another real estate crash. In a crash the owner would be upside down on a farm that couldn't be refinanced because the LTV ratio would no longer conform. But the upside would be a valid position to argue for lower taxes.

So, that's a revisit of the math behind why I never bought a farm. The first time I did a similar exercise was the end of the 80's when interest rates were higher, commodity prices were low, I was broke, and we were waiting for the trickle-down and peace in the middle east.

You are mostly correct, but farmers get some other bennies you haven’t mentioned.

That’s why I farm other peoples land. I have ZERO land costs. It’s their land and I farm it for them at their pleasure.
I paid rent, once. That was a money loser and I probably wouldn’t do it again without a longer term contract and more rights given to me on inputs and access.

My operation has a great deal of costs, but without having to worry about paying taxes, mortgages, fence line maintenance, driveways and the like, I can make my farming operation “pencil” with ease.
Some years are better than others. This year I am investing in a newer primary mover for my large square baler (300HP tractor). That will set me back a few Yuan, but I should be fine.

What will finally put me under is when these clowns make cattle/meat illegal. Bill Gates working hard in his fake meat labs to make it all happen, but I may be sitting poolside with MoKelly in Florida by the time that happens.

 

[ultrarunner]

I over heard a guy cussing a local farmer for selling his farm to a developer. He was whining that his property values were going to drop because his ”farm view” would be ruined.

Oh well!!! Suck it up, buttercup. I bet you didn’t give a flyin leap about him when he was working 70 hours per week and you were falling asleep at your 200K/yr desk job!

Probably loves to complain about food prices, too!

The Christmas Tree farm was going to developer after decades negotiating with the land trust got no where.

The place in same family since 1860’s.

When the family learned my brother was interested in carrying on the tradition it sealed the deal.

 

[Hay Dude]

The Christmas Tree farm was going to developer after decades with the park got no where.

The place in same family since 1860’s.

When the family learned my brother was interested in carrying on the tradition it sealed the deal.

Doesn’t surprise me.
The way most of the American hating news media makes fun of Christmas and belittles American traditions, I’m surprised Christmas is even still a holiday.

#Pray for the survival of this nation

 

[dodge man]

I live in the middle of farm country. There are still a lot of family farms and farmers but some of those have become corporations and are larger. My father in law and brother in law farm. They own ground but cash rent most of the ground they farm. It seems more and more land is getting bought by people that don’t even live in the area.

 

[Hay Dude]

I live in the middle of farm country. There are still a lot of family farms and farmers but some of those have become corporations and are larger. My father in law and brother in law farm. They own ground but cash rent most of the ground they farm. It seems more and more land is getting bought by people that don’t even live in the area.

Yep.
I farm for wealthy people who don’t know a hammer from a sickle.
Many are absentee owners floating on a 100 footer in the Caribbean.

I appreciate them, but they are not “your father’s” memory of big landowners. These are wealthy business people or inheritors of large fortunes.

 

[dodge man]

There is also a trend in this area of people buying up some of the rougher ground for hunting. This area is known for having a lot of deer and ground that is worthless for earning any farming income is going for $5k and acre.

 

[oosik]

The major farming industry around here - cattle, wheat and apples. It's not so much - loss of farm land. It's consolidation of smaller farms into larger corporate farms.

The small farmer is selling out to the large corporation. The small farmer does not enjoy the economy of scale factor.

 

[Farmer495]

Next to impossible to start from scratch here. Only younger people getting in are because of family farm being there.

There isn't any payback on the capital cost to start now in almost every case.

George Fox summed up the struggle of selling out due to urban encroachment in 1989.

"somebody sold out thinking they could walk away, some day they're gonna have to say no trespassing on this land"