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Most Illinois farmland is not owned by farmers

chicagotribune.com

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Re: Most Illinois farmland is not owned by farmers

#171

Post by bombcar »

gopher_space wrote: post #141
bombcar wrote: post #112

Earlier quoted context omitted.

There's opportunities for the right person out there, I've seen it a few times - young man (or woman) who wants to run a farm or rural business or whatnot, either marries into the family or becomes "basically adopted" and inherits the business or farm. You have tons of businesses that are viable (produce enough money to support a family) as long as you never load it with debt; because they do NOT produce enough to su…

> You have tons of businesses that are viable (produce enough money to support a family) as long as you never load it with debt; because they do NOT produce enough to support a family and the debt load that would come from buying it. I've been thinking about this situation as "the bakery trap". The labor dimension here is that the best possible career move for the person you've spent the past n years training is to i…

"The E-Myth" books talk about this (which is the worst name ever because the E is Entrepreneur not E as in email or emachines lol) - many small businesses are NOT small businesses, they're a job you own, and you can't sell a job.

Re: Most Illinois farmland is not owned by farmers

#172

Post by keybored »

actionfromafar wrote: post #13
edwardbernays wrote: post #9

Earlier quoted context omitted.

true, we wish this brave and powerful man the best of luck as he takes on his matched opponents: the people in his socioeconomic bracket. amen.

You jest, but the harsh truth is that almost no change in society is possible unless at least some of the societal elites are on the bandwagon.

... or that's what they want you to believe

Re: Most Illinois farmland is not owned by farmers

#173

Post by arbor_day »

9rx wrote: post #102
arbor_day wrote: post #73

Earlier quoted context omitted.

Have you seen how expensive a tractor or combine is? The economies of scale are real in farming. You need ~$1M worth of equipment to farm 80 acres (~$1M worth of land), but that same equipment can basically farm 800 acres (~10M worth of land). An equipment issue can destroy a years worth of work with 800 acres (e.g. frost damage from delays), but with 8000 acres you can have spares / avoid the loss with some overtime…

> You need ~$1M worth of equipment to farm 80 acres All new? That seems way too low. You'd struggle to get into a combine alone. Used? That seems way too high. I doubt I'd get any more than $300k for my equipment (and that's more than I paid) if I were to sell it today, and it's pretty nice equipment compared to what I see a lot of farmers using. > 80 acres (~$1M worth of land) We always wonder why so cheap? The 18 a…

1M was a nice round number for equipment. I see people without much land buy new equipment all the time, it’s wild! They tend to not stick around long though.

You must have better land than we do. Land by me goes for around 14K/ acre. The bigger plots or better land goes higher.

Re: Most Illinois farmland is not owned by farmers

#174

Post by bluGill »

9rx wrote: post #102
arbor_day wrote: post #73

Earlier quoted context omitted.

Have you seen how expensive a tractor or combine is? The economies of scale are real in farming. You need ~$1M worth of equipment to farm 80 acres (~$1M worth of land), but that same equipment can basically farm 800 acres (~10M worth of land). An equipment issue can destroy a years worth of work with 800 acres (e.g. frost damage from delays), but with 8000 acres you can have spares / avoid the loss with some overtime…

> You need ~$1M worth of equipment to farm 80 acres All new? That seems way too low. You'd struggle to get into a combine alone. Used? That seems way too high. I doubt I'd get any more than $300k for my equipment (and that's more than I paid) if I were to sell it today, and it's pretty nice equipment compared to what I see a lot of farmers using. > 80 acres (~$1M worth of land) We always wonder why so cheap? The 18 a…

Anyone with 80 acres is buying used tractors. They are likely hiring someone else with a combine to harvest their fields (harvest needs a lot more labor than the 80 acre farm has so when you hire a combine you get a team of 3-4 people which also includes grain carts and semi trucks to get your grain from the field to the elevator (which might be something you own and might be something town).

I work for John Deere, though I don't speak for the company. All tractors are built to order, which means when someone buys a new tractor the dealer has several months to sell the trade-in. When the new tractor arrives from the factory the truck unloads the new one, and loads the trade in to take to someone else. A good dealer will have a list of farmers and what equipment they all have so they can put this deal together. As a result the only tractors a dealer has are service loaners (which are sometimes rented), which makes all the accountants happy.

Re: Most Illinois farmland is not owned by farmers

#175

Post by dylan604 »

9rx wrote: post #118
arbor_day wrote: post #62

I own the farm and farm it in Illinois. I owe the land through an LLC, because farming is dangerous and I don't want to go bankrupt if somebody sues me. Farms are expensive and hard to subdivide, so people will put them into a legal entity and pass down to the next generation via a trust. All of my neighbors are doing the same, so we're all counted as "not farmers" here Farming is a terrible business. My few hundred…

> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit Well, it is ultimately a real estate business. The "hundred grand" in profit is really there only to support the mortgage payments — meaning that's what other farmers are counting on, so they're going to drive the prices down to that point. It is like a tech startup. You are counting on the asset…

If you don't need a couple of million dollars worth of tractors, combines, and other equipment that are all driven by GPS then you don't have enough acres.

Re: Most Illinois farmland is not owned by farmers

#176

Post by beambot »

dismalaf wrote: post #128
libraryofbabel wrote: post #82

Earlier quoted context omitted.

> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. Non-judgmental curious question: why do you keep doing it? (As opposed to selling the land and buying tbills.)

Land can be financed over long periods and held forever. So a few hundred grand will pay off $5 million in about 20 years and then that's steady income forever after (as long as you keep farming).

> that's steady income forever after

Let me tell you about farming... this isn't true.

Re: Most Illinois farmland is not owned by farmers

#177

Post by singleshot_ »

toast0 wrote: post #143
lotsofpulp wrote: post #129

Earlier quoted context omitted.

In richer parts of town, many houses will be in trusts also. It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court. Plus in the states and wealth levels that many people on this website have, it is also a no brainer to save on taxes.

> It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court. What I keep hearing from experienced estate attorneys is that California probate court is onerous and worth a lot of effort to avoid, but other state's have reasonable probate; it might still be worth it to avoid probate, but it's not such a big deal. OTOH, dealing wit…

A lot of words to tell you that you should consult an estate attorney in your jurisdiction, but at least that advice was correct.

Re: Most Illinois farmland is not owned by farmers

#178

Post by arbor_day »

appreciatorBus wrote: post #88
libraryofbabel wrote: post #82

Earlier quoted context omitted.

> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. Non-judgmental curious question: why do you keep doing it? (As opposed to selling the land and buying tbills.)

> the ick that comes with running other businesses Also non-judgmental curious question: what is this "ick" related to non-farming businesses?

There’s something righteous in farming where it’s really hard to feel like you’re doing wrong even if you’re getting rich — you are just feeding people. It’s like being a doctor.

Re: Most Illinois farmland is not owned by farmers

#179

Post by 9rx »

bluGill wrote: post #174
9rx wrote: post #102

Earlier quoted context omitted.

> You need ~$1M worth of equipment to farm 80 acres All new? That seems way too low. You'd struggle to get into a combine alone. Used? That seems way too high. I doubt I'd get any more than $300k for my equipment (and that's more than I paid) if I were to sell it today, and it's pretty nice equipment compared to what I see a lot of farmers using. > 80 acres (~$1M worth of land) We always wonder why so cheap? The 18 a…

Anyone with 80 acres is buying used tractors. They are likely hiring someone else with a combine to harvest their fields (harvest needs a lot more labor than the 80 acre farm has so when you hire a combine you get a team of 3-4 people which also includes grain carts and semi trucks to get your grain from the field to the elevator (which might be something you own and might be something town). I work for John Deere, t…

> Anyone with 80 acres is buying used tractors.

You'd think, but you'd be surprised. In fact, one of the families I rent land from (aging couple who was looking to work less land) is still working around 50 of their acres themselves and they got a couple of new tractors recently.

> They are likely hiring someone else with a combine to harvest their fields

They even combine the crop themselves. But, to be fair, the combine is pretty old (IH 1420).

Re: Most Illinois farmland is not owned by farmers

#180

Post by throwmeaway222 »

AnimalMuppet wrote: post #100
dlcarrier wrote: post #14

Most farms are not owned by farmers, most housing is not owned by tenants, most airplanes are not owned by airlines, etc., etc.. Vertical integration can have benefits, but it isn't necessary and has drawbacks. Even when vertically integrated, regulations are often written under the assumption that everything is leased, not owned, so compliance is easier if you own a company that owns an asset, instead of owning that…

Most housing is not owned by tenants? That surprises me quite a bit. Would you supply a source for that?

tenants by definition don't own it, he was building a false argument
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