Utility Tractor SALES RED HOT

[N80]

My experience is pretty limited when it comes to farming but I know one cattle rancher very well. Has about 300 head. Cuts about 2000 bales of hay a year. Bottom line is that there isn't great money in it. You might can make a lot of money in the giant feed lots, you might can make a lot of money selling the actual meet. But the business of selling calves is not lucrative. You have no control of the price per pound that you will be offered and even though the beef market has grown, the price per pound for calves has been relatively stagnant.

Like someone mentioned, a lot of the calves that are sent to big central feed lots are grown on small farms. Because these small farms are unconnected they have no leverage on the price per pound. (If they could somehow organize it might be different, but that's not likely).

He doesn't buy new equipment. In fact, he hardly buys any equipment at all. He has one big JD ( maybe 120 hp) that pulls the baler and the (big) manure spreader. It is from about 1978 and is his newest tractor. He has another JD that has the hay mower on it. Another JD, maybe 80 hp, that has the loader on it for moving bales. Two big old Cases for bush hogging. A small JD for post hole digging/fence repairs. Just bought NH a skid steer (very used) to load turkey manure into the spreader.

All that's just to say that folks like him are not accounting for tractor sales of any sort. And he's pretty typical of the other local guys. One guy down the street has two 'new' NH cab tractors. I'd say they are ten years old. He bought them when he came into some money, not with farm money.

 

[bialecki]

I wonder if there is any corelation of those numbers to people who visit this site and ask advice on buying a new or first tractor. Plenty of people here seem to think you "need" 300 hp to mow a 1/2 acre lot and we all seem to sell people up to the next level of machine. Just a thought.

Tiny

Don't you?

 

[HayDR]

My experience is pretty limited when it comes to farming but I know one cattle rancher very well. Has about 300 head. Cuts about 2000 bales of hay a year. Bottom line is that there isn't great money in it. You might can make a lot of money in the giant feed lots, you might can make a lot of money selling the actual meet. But the business of selling calves is not lucrative. You have no control of the price per pound that you will be offered and even though the beef market has grown, the price per pound for calves has been relatively stagnant.

Like someone mentioned, a lot of the calves that are sent to big central feed lots are grown on small farms. Because these small farms are unconnected they have no leverage on the price per pound. (If they could somehow organize it might be different, but that's not likely).

He doesn't buy new equipment. In fact, he hardly buys any equipment at all. He has one big JD ( maybe 120 hp) that pulls the baler and the (big) manure spreader. It is from about 1978 and is his newest tractor. He has another JD that has the hay mower on it. Another JD, maybe 80 hp, that has the loader on it for moving bales. Two big old Cases for bush hogging. A small JD for post hole digging/fence repairs. Just bought NH a skid steer (very used) to load turkey manure into the spreader.

All that's just to say that folks like him are not accounting for tractor sales of any sort. And he's pretty typical of the other local guys. One guy down the street has two 'new' NH cab tractors. I'd say they are ten years old. He bought them when he came into some money, not with farm money.

The land is the investment and the selling of the calves just pays the taxes and the note. My partner purchased a farm in 1962, 119 acres for $29,000. Paid it off and made a living by raising tobacco, cow calf operation and black-smithing around for the neighbors. Now that farm is worth $3-4 million in its undeveloped state. That is not really that much money these days but that amount of money will buy you a new Chevrolet and a decent retirement.

 

[N80]

Yep. The farmer I'm talking about probably has nearly 2000 acres. I bought 250 from him about six years ago and was shocked to find that a nearby piece the same size recently sold for nearly twice what I paid for it. Niether one of us has any intention of selling. But if development intrudes too much we might have to in order to avoid the inevitable tax increases and to avoid the 'development' which we both enjoy...being away from.

But, its nice to know that if everything goes to heck in a handbasket that we both stand to at least get out with the price of the land.

 

[Turbys_1700]

The land is the investment and the selling of the calves just pays the taxes and the note. My partner purchased a farm in 1962, 119 acres for $29,000. Paid it off and made a living by raising tobacco, cow calf operation and black-smithing around for the neighbors. Now that farm is worth $3-4 million in its undeveloped state. That is not really that much money these days but that amount of money will buy you a new Chevrolet and a decent retirement.

That's the exact same thing here in NC. I live on one of my family's farm. It is 100 acres. We've been offered 2M for the whole lot or 1M for 40 acres in the past 6 months. It makes a man think. The bad thing about this land value appreciation is estate planning and trying to keep the goverment from taking a lot of it at the time of my parents pass on. It sucks but it's life.

About 4 years ago the state took one of my dad's farms fior a new road. They paid him much higher than market value for 23 acres and his house. He now resides in a 4K sq ft mansion on a golf course and comes down to the farm daily to mess around. The thing about this road purchase is that it left him with 43 acres on the interchange. He's in the process of selling that now and let's just say that the numbers are astronomical.

So...I may be one of those guys buying a newer tractor in the future. And I can verify that the money was not made from farming. Growth and rising land prices are what's doing it here in NC.

 

[RollingsFarms]

That's the exact same thing here in NC. I live on one of my family's farm. It is 100 acres. We've been offered 2M for the whole lot or 1M for 40 acres in the past 6 months. It makes a man think. The bad thing about this land value appreciation is estate planning and trying to keep the goverment from taking a lot of it at the time of my parents pass on. It sucks but it's life.

About 4 years ago the state took one of my dad's farms fior a new road. They paid him much higher than market value for 23 acres and his house. He now resides in a 4K sq ft mansion on a golf course and comes down to the farm daily to mess around. The thing about this road purchase is that it left him with 43 acres on the interchange. He's in the process of selling that now and let's just say that the numbers are astronomical.

So...I may be one of those guys buying a newer tractor in the future. And I can verify that the money was not made from farming. Growth and rising land prices are what's doing it here in NC.

make sure that offer of 1-2 million is what you poacket AFTER taxes. i get offers for my 750 acres all the time but have no intrest in selling because of the timber value in 10-20 years is MUCH greater then someone wanting to buy the land from me right now. the government also pays me to grow these trees and to protect the 2 bays on my land. my land borders a state forest so mostly hunters want to buy property from me.

 

[Turbys_1700]

make sure that offer of 1-2 million is what you poacket AFTER taxes. i get offers for my 750 acres all the time but have no intrest in selling because of the timber value in 10-20 years is MUCH greater then someone wanting to buy the land from me right now. the government also pays me to grow these trees and to protect the 2 bays on my land. my land borders a state forest so mostly hunters want to buy property from me.

Taxes eat you alive when you sell property. My dad will pay 15% capital gains in addition to 8% state tax. I personally have no interest in selling this farm. I hope to retire to it eventually and put 20 to 25 cows back on it. I know that cattle is not a money making venture but when you've fooled around with them for most of your life you like it.

One advantage is that the county taxes are much less when it's considered for farm valuation versus residential. Death and taxes. They are the only thing that is certain in this life.

 

[mjarrels]

We dropped off a received "letter of intend" at lawers office last week to sell 37 acreas for 4.5M... helps when county services are installed... beside a 36 hole golf course... and already have $500,000 to $800,000 dollar homes going up all around. Its unbelievable!

mark

 

[froggy]

The capital gains rate changes to 20% in 2011. See attached information.

 

[randy41]

i think another aspect of this is the switch from tobacco to grain production for many farmers. i think you use bigger equipment for grain production.

 

[schmism]

its intresting to get the view of how diffrent farming is across the country.

Round my parts its still mostly small time. Second generation is taking over the small 300 acer farm dad worked. married, 2 kids, mom works a normal 9-5 which mostly pays the bills...dad leases half the land to the "big guy" in the area, of the other 1/2 he works 1/4 himself with smaller used equipment. the other 1/4 he keeps 20-40 head on. sells a dozzen or so a year when the price is right....

(i have at least 4 neighbors) one of them has about 15-20 head on ~10 acers of untillable land the creek runs though, (that shares a fence with my west edge) but he also has probibly 200-300 acers of corn/soybeens he works.

round these parts the farmers seem to work 4 diffrent types, corn, soybeens, hay (farrow for a year or 2) and pasture for 20-40 cattle (hay round bailed off of own feild for own use) the beans, corn, hay rotate.

shure there are a hand full of guys driveing 300hp mosters working 800+ acers but in these parts, it seems the little (classic) guy outnumbers them 2 or 3 :1

you drive down the road, and seems like every 2nd farm you pass you can spot 20 head grazeing. and along with it theres and an old 60-100 hp JD doing chores...

 

[odleefs]

I agree with the theory of professionals moving out into the country and trying their hand at hobby farming. Look no further than Jim Cramer (the zany host of CNBCs Mad Money) who always touts himself as a gentleman farmer like Thomas Jefferson.
Alot of these individuals are affluent baby boomers who unlike their parents are not moving down to Florida or another sunshine state to retire into leather-skinned oblivion but instead buying a dream farm and doing something with it. While their livelihood does not depend on the proceeds of farming, they enjoy the tasks of a farm life...like driving a large CUT or utility tractor or the like.

 

[daTeacha]

Those of you who have a fair chunk of ground and who want to make sure it is not developed yet want to get some of the value in it should look into conservation easements. You basically sell the right to develop the land while continuing to hold title to it. The check you get is for the difference in value between development land and ag land right now. Since the land can't be sold for development, the value will stay relatively low for tax purposes. There are several different organizations that will hold the easement and it's pretty variable from state to state, but something you might want to at least examine in your area. You might have a nice chunk of change coming for just doing what you want to do anyways.