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Old 10-20-2009, 05:42 PM
 
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This is a pretty scary situation, at 35 I am trying to make this farm more productive and profitable, and as everyone knows, building up a farm to that level takes time. I've got a modest amount of land, but a large portion of that land is not conducive to farming in regards to terrain and soil type. That leaves me pretty much looking to buy more arable land. The other day I was talking to my Uncle as we chopped corn, and he is in a similar situation. His boy and nephew want to continue to farm, but because of taxes and the efficiency of scale thing, he too needs to find more arable land in which to grow crops to feed his dairy cows.

Now this area has only 10% in arable land, so it's tough. You can either buy expensive land and farm it now, or buy cheaper land, but end up clearing it. Either way him and I need to buy more land.

But here is the thing, no matter which way I pencil things out, there is no possible way to justify the land purchase. With the low profit levels per lamb, paying for a land mortgage...and then taxes...just doesn't work out. Heck I don't even know if just paying the property taxes would pencil out! After talking with him...a dairy farmer...he said he came to the same conclusion. There is just no way to justify it.

So this is where we are at. Even looking at a more favorable market, with rose colored glasses, it seems that we are both in a conundrum. We cannot stay the size we are and make enough money to survive in either cows or sheep, and so we must expand...no alternative. But how can we convince the powers that wield the almighty funding that we have no option but to expand if it just does not pencil out to do so? There is no way to justify the purchase on paper!

Now keep in mind me and him are farmers that are lucky enough to be born into farming with tracts of land from past generations. (We are related but its still two different farms I am talking about). What really concerns me is is a crop of farmers coming up through who do have the mental capacity and stamina to successfully engage in farming, but are not able to obtain the financing to do so.

I know there is a small percentage of people who may have relatives die that leave enough of an estate to buy a few thousand acres, but the chances of them being successful in farming is kind of low. I mean its a tough life and not for the faint of heart who have been pampered their entire lives. But what I do know is that there are people out there that would do extremely well at farming despite its challenges, but how do we get good farms in their hands in this day and age so that we can continue to have quality, healthful and affordable food 10,20, and even 50 years from now? In the next 10 years, 60% of the farmland in this country will change hands, but whether it grows food or houses is truly the question. How can the farmer get over the hurdles of high property taxes and high property values?
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Old 10-20-2009, 06:48 PM
 
Location: Canada
5,779 posts, read 6,690,462 times
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Farmers all over have that problem. Some farmers have solved their issues by finding niche markets, such as market gardening, or growing specialized herbs and such and delivering them to finer restaurants. There are also pick-your own produce farms cropping up here that grow everything from peas to corn. With interest in organic produce growing, that could be one solution.

It may not be the kind of farming many farmers would call farming, but ultimately it still may be the only solution.
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Old 10-20-2009, 07:05 PM
 
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Don't know what part of the country you're farming in ... but there are two clear pictures I see of family farming in the USA today:

1) Farmers who work off the farm, as I do, to pay for their "farming and ranching habit". Here in SE Wyoming, it's a tough proposition to get good land, irrigation water, and a consistently productive good year and have that coincide with good prices for your product. We've got to work every angle of farm production, raising livestock ... and stress our locally grown/produced, organic aspect to our farmer's market buyers.

2) Farmers in places like East of the Mississippi along the I-80 corridor, who have lots of arable land, good tilth, lots of natural moisture, and realistic land prices relevant to their production potential. Don't get me wrong, it's still a small profit margin business, but enough to make a living on with a reasonable size parcel of land and a modest labor cost to help out when the heavier workload hits.

I know of several farmers in our area who make a reasonable living, but it takes them 6+ sections of land to do so. The custom farmers around here do a bit better by not owning the land, and either work on shares or a fixed lease each year, but they still need many thousands of acres and the equipment to work it to be in the business.

Perhaps you'd disclose a bit more information about where you're farming, size of operation, crops you grow, etc?
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Old 10-21-2009, 08:41 AM
 
Location: Nebraska
4,178 posts, read 9,538,452 times
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Default Thinking Out Loud

It would be foolish for me to compare the apples of your situation to the oranges of mine; my acreage is solely for personal supplement, not public sale. However, I can relate to the cost/profit differential; unless one has outside income, I simply cannot see how any family farm or ranch can function profitably in the current market; pay help, taxes, land payments, as well as animal care costs, when sales of produce not only happen only several times a year, but when market prices are fluctuating so widely. Buying more property at this time would seem to put you into a hole, as well as put you into a very tight gambling position on future profits and losses.

I fear that the niche market idea is perhaps your only option at this time as previously mentioned - however, I also fear that the problem with niche markets is their lack of dependability. For example, I know that World Food Market is always looking for suppliers, and even offer grants and low-interest loans for initialization to some suppliers - but 1)That can impact how you do things on your farm and raise your costs, 2) within the year, I can foresee market prices escalating to the point where "organic" and other niche markets will be left behind as people struggle just to put basic food on the table, never mind the high-end and more expensive niche foods.

Expanding your property without an expanding market trend is hazardous as I know that you know. Is there a chance of expanding your market into, say, China? I know that they have shown an interest in the beef production here, but their main qualifier in their stores is that the purchaser wants to know from where their produce comes. We have seen videos at the Co-op where they show the Chinese markets with little pictures and even small videos above the counters, of the animals prior to slaughter and their caretakers - so that Mr. Moto knows that Farmer Suzuki has a real hand on his equipment, animals, and produce. Is your local Co-op looking to help you expand your market in this area or in this manner? It seems like this should be investigated.

Unless you have a chance to address an expanding market, it seems to me that your only other choices would be to lease, sharecrop, or downsize. Painful, I know; it even bothers me to type it. But I'd hate for you to expand and pay all of that money as well as go into debt for more, if your sale market is going to be impacted by fewer purchases due to price increases and a struggling overall economy. Throwing caution to the winds, taking on more debt, and hoping for the best might not be the most fiscally advisable course right now. Ouch. Sorry.
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Old 10-21-2009, 08:41 AM
 
Location: Forests of Maine
31,148 posts, read 50,323,277 times
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Quote:
Originally Posted by BrokenTap View Post
This is a pretty scary situation, at 35 I am trying to make this farm more productive and profitable, and as everyone knows, building up a farm to that level takes time. ...
I grew up in a desert of flood-irrigated farms. My family had been dis-placed from their multi-generational farms and was trying to get back into farming.

Sandy soils, 100 degree temps all summer long, and a foot of irrigation water per acre available with a phone call.

We had almond orchards and clover pastures, we share-cropped other orchards and rotated our cattle with other folk's pastures.

We had lots of neighbors who had dairy operations; typically 100 acres of feed lot and milking parlor, surrounded by 400 acres of silage cropland.
My grandparents each had small dairies, and subsidized their lives by working in canneries during the canning season.

The central valley of California is often touted as the world's richest most productive region. However my father worked full-time to support a family, and was never able to make the farming and share-cropping to become 'profitable'.

The prices of land are high, and land is more valuable for tract housing than it is for crops. In the years since I was a child the towns have grown and the farms are disappearing.

Of my siblings only one has been able to stay in farming. Generally it takes one person with a high-paying union job full-time who works the farm nights and weekends; while the other works the farm full-time.

I went to college there. There are many canneries in the Central Valley, so you have LLCs with one foot in canning and one foot in farming. Every meeting has corporate lawyers, accountants and science advisors.

The only model for 'family farming' that I saw in college was: a couple where one had a full-time high-paying union job, and worked on their farm nights and weekends; and the spouse worked on the farm full-time.

We also have had family friends who leased National Forest land to run cattle on. They might lease 10,000 acres and have 1,000 head of cattle on it. What I always noticed as a child was that every one of them was missing fingers. As an adult what I see is that each of them are subsistence ranchers, just barely squeaking by.

My one sibling who has been a 'success' with farming bought bankrupt vineyards from the bank [with mortgage notes that held off payments for 4 years]. My BIL is an old army buddy with the local winery owner in Modesto, so while other grape farmers are arguing over sugar content and price/ton, my BIL is guaranteed that every ton he produces will be bought.

To honor that guarantee the winery had to expand and even built a massive underground cellar in Livingston with imported oak barrels, they had intended to store the excess wine underground and only after 20-years of aging begin to bottle it and sell it. But now even that cellar is full so they had start marketing that wine under its own label.

So you see, in my family the only truly successful farmer has been one that really did it with a 'hook-up'. His army buddy buys all that he produces at guaranteed prices.



Quote:
... I've got a modest amount of land, but a large portion of that land is not conducive to farming in regards to terrain and soil type. That leaves me pretty much looking to buy more arable land. The other day I was talking to my Uncle as we chopped corn, and he is in a similar situation. His boy and nephew want to continue to farm, but because of taxes and the efficiency of scale thing, he too needs to find more arable land in which to grow crops to feed his dairy cows.

Now this area has only 10% in arable land, so it's tough. You can either buy expensive land and farm it now, or buy cheaper land, but end up clearing it. Either way him and I need to buy more land.

But here is the thing, no matter which way I pencil things out, there is no possible way to justify the land purchase. With the low profit levels per lamb, paying for a land mortgage...and then taxes...just doesn't work out. Heck I don't even know if just paying the property taxes would pencil out! After talking with him...a dairy farmer...he said he came to the same conclusion. There is just no way to justify it.

So this is where we are at. Even looking at a more favorable market, with rose colored glasses, it seems that we are both in a conundrum. We cannot stay the size we are and make enough money to survive in either cows or sheep, and so we must expand...no alternative. But how can we convince the powers that wield the almighty funding that we have no option but to expand if it just does not pencil out to do so? There is no way to justify the purchase on paper!

Now keep in mind me and him are farmers that are lucky enough to be born into farming with tracts of land from past generations. (We are related but its still two different farms I am talking about). What really concerns me is is a crop of farmers coming up through who do have the mental capacity and stamina to successfully engage in farming, but are not able to obtain the financing to do so.

I know there is a small percentage of people who may have relatives die that leave enough of an estate to buy a few thousand acres, but the chances of them being successful in farming is kind of low. I mean its a tough life and not for the faint of heart who have been pampered their entire lives. But what I do know is that there are people out there that would do extremely well at farming despite its challenges, but how do we get good farms in their hands in this day and age so that we can continue to have quality, healthful and affordable food 10,20, and even 50 years from now? In the next 10 years, 60% of the farmland in this country will change hands, but whether it grows food or houses is truly the question. How can the farmer get over the hurdles of high property taxes and high property values?
I have no helpful advise for you.

The only guys that I see here who are 'making it', are those that you dislike. The micro-farmers.

10 acres with a dozen greenhouses, selling organic veggies in parking lots. And even among them, I think the norm is just squeaking by.
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Old 10-21-2009, 05:17 PM
 
1,297 posts, read 3,158,802 times
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FBK and others, it's not that we aren't "making it", I think we are doing okay. What we are experiencing now is definitely a downturn in the market and we are losing 40K per month, BUT when the milk prices increase, and they certainly are starting to creep up...we will be back at it.

I guess what I did not get across was that with more people in the family decision to stay on the farm, and more family members on the way, we need more land base so we can get bigger and accommodate them. You simply can not tell a kid that has worked on the farm everyday since a toddler to 18 years old, "thanks for your free contribution for the last 16 years, but we can't afford to keep you working here," and send them down the road.

Today I was doing some Bee Lining with an old family friend who retired from farming when I was a kid. As we traced some bees back into the woods for a swarming hive, we crossed an old rock wall...sure signs that this area was actively farmed 150 years ago. He mentioned it then how today we have the best equipment and cannot keep trees out of a field, where as 150 years ago they had a team of oxen and cleared square miles of forest.

I have cleared 6 acres of forest back into fields this year alone, and maybe that is the answer. With 14 acres of woods for every acre I have in arable land there is that potential...if USDA rules allow it. I have an additional 6 acres I want to clear, but the soil is questionable "erodible". Not wetland, but just being highly erodible means I cannot actively farm it. Its regulations like these that really hamper a farmers efforts to reduce the land base needed to provide food for the national food chain. Its just crazy, we are being hemmed in by more and more land regulations, set-back, conservation easements, and yet the population of the USA is increasing exponentially. Our hands are being tied behind our back, yet we are expected to work miracles. ???

Currently our only option is to buy more land that is already in agricultural use...but guess what, this is the land the homesteaders and homeowners want as well. But to pay the going rates...it just does not pencil out. And I say this as an existing farmer who has a little more leverage then some poor soul that wants to farm, but lacks any collateral in which to start. Those are the people I feel bad for. They could ultimately feed this country in the future, and yet the system is stacked entirely against them. For us, at least we can partially do what we love. I just wish we could allow a better start for start up farmers.
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Old 10-21-2009, 07:30 PM
 
Location: Forests of Maine
31,148 posts, read 50,323,277 times
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Quote:
Originally Posted by BrokenTap View Post
FBK and others, it's not that we aren't "making it",...
Ooops.

I do apologize.

I did not mean to say, I did not mean to imply that you were not succeeding.

I do see that 'farming' is tough.

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Old 10-22-2009, 09:02 AM
 
Location: 3rd Rock fts
748 posts, read 976,699 times
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How about trying to attract a food company to your immediate area & work with them. It sounds like the next corporate step is to harass/get rid of farmers like you so they can completely dominate the future food market (organic, home grown).

Legislation & contracts that nobody can ever mess with you or your land; the food company would have to buy a high percentage & later on buy all garden food from the immediate neighboring farms only! This idea would alleviate the arguably biggest problem moving forward which is the transportation of the food (cost & pollution).

PS: These things can pop up everywhere! Of course the new food companys' would have to be totally environmentally friendly; not wanna-be environmentally friendly, which can create building/designing jobs.

Also, make sure their lights are shielded/facing downwards (sorry, couldn’t resist).
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Old 10-22-2009, 09:16 AM
 
1,297 posts, read 3,158,802 times
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Oh no FBK...my fault. I kind of made it seem like I was calling you out on that...but it was my fault as it was more of a clarification on my part.

Back in 2007-2008 we invested heavily into the farm because prices were good and that is what you want to do. So now we are taking a hit, but when the milk prices go up, the equipment will be paid for and we will be getting a bigger check. We should be alright. But that is equipment which you can Schedule F Section 179 that pretty easily, land purchases and livestock are a bit tougher to do. Hence not penciling out.

I got a stump and dump chunk of land next to me I would like to buy as with the trees removed I think it could be converted into arable farmland pretty easily. Its high and dry for the most part, and would not be too hard to get access too for the sheep and equipment, but its trying to pencil it out that is tough. Taxes alone would put me at 20K per year...that is higher then the Federal Poverty level for goodness sakes. Land rich, money poor I guess as the saying goes.

My Great Uncle once said we would all be better off if we quit farming, sold the land, and lived in a tar paper shack and had the government convinced we are crazy and they would send us a check every month. I don't know but that he is indeed right. Everyone else has got it figured out and getting paid, and we are foolishly working everyday and feeding the lame and the lazy. Its certainly tough trying to have something nowadays...
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Old 10-22-2009, 09:30 AM
 
1,297 posts, read 3,158,802 times
Reputation: 1506
Quote:
Originally Posted by DSOs View Post
How about trying to attract a food company to your immediate area & work with them. It sounds like the next corporate step is to harass/get rid of farmers like you so they can completely dominate the future food market (organic, home grown).

Legislation & contracts that nobody can ever mess with you or your land; the food company would have to buy a high percentage & later on buy all garden food from the immediate neighboring farms only! This idea would alleviate the arguably biggest problem moving forward which is the transportation of the food (cost & pollution).

PS: These things can pop up everywhere! Of course the new food companys' would have to be totally environmentally friendly; not wanna-be environmentally friendly, which can create building/designing jobs.

Also, make sure their lights are shielded/facing downwards (sorry, couldn’t resist).
You are certainly onto something because in the 1980's we were fortunate to have Maplewood and Penobscot Poultry here. It was the best times this County ever had. You could have literally 5 acres of ground, build a few chicken houses and make a living as a chicken farmer. I mean these buildings held 50,000-250,000 birds.

Things were going quite well, my town had 2 grain mills, a functioning railroad, 3 stores and a fire department that could put out a fire in the middle of the day because firefighters were home farming. Now the village is DEAD. No stores. No Railroad. No grain Mills and the farmers are being taxed on chicken barns that sit vacant.

Part of it was that the food plant owners did not have kids that wanted to continue the family companies. But part of it was a local media smear campaign that weekly pressured the plants to close to be more tourist oriented. Either way there is only so long a company can be accused of environmental disasters like putting chicken waste into the bay before it closes up. That is exactly what happened and you know what...

The dairy farmers now have to buy expensive fertilizer because chicken manure is not plentiful and free anymore

The towns tanked because the tourists still drive right past this county without stopping

The editor of the Republican Journal left after the plants closed and never witnessed the economic carnage he brought on

And the lobstermen are gone too because the chicken guts kept the lobsters baited and fed in Maine's deepest bay.

We all lost. So I do understand the need for a food processing company here. But the cost of fuel for transportation for food is not an issue at all. Its a common myth I hear all the time. And that is, "local food has a lower carbon footprint over food from away since it is trucked in." That is a complete myth.

Because a truck or railroad car can hold so much product, that the small amount of fuel it takes to ship food in bulk makes it far more effecient then local farms. Local farms rely on smaller equipment, a smaller economy of scale, and so they actually burn more fuel powering their small Kubotas then big farmers and modern transportation equipment.

But that is just comparing carbon footprints to carbon footprints. There is a ton of reasons to buy and grow locally. It's just that not having to truck food around is not one of its better reasons to do so.
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