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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

#191

Post by dismalaf »

jldugger wrote: post #168
dismalaf wrote: post #128

Earlier quoted context omitted.

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).

Okay, but as mentioned, 5 million also buys 20 year treasuries that yield 4.90%, or about 245k a year. I probably wouldn't buy them on margin tho.

> I probably wouldn't buy them on margin tho.

Yeah, this is the pertinent detail. The whole point is putting down only a fraction of the amount.

When you calculate the rate of return on a financed property, the rate of return is versus the capital you put down, not the value of what you financed. Plus accruing equity in the property is part of the return.

If you put down $1.25 million and you get a $5 million property paid off after 20 years, that's double the rate of return on your bonds.

Re: Most Illinois farmland is not owned by farmers

#192

Post by skybrian »

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…

Just wondering: what are the fun parts?

Re: Most Illinois farmland is not owned by farmers

#193

Post by elzbardico »

jldugger wrote: post #168
dismalaf wrote: post #128

Earlier quoted context omitted.

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).

Okay, but as mentioned, 5 million also buys 20 year treasuries that yield 4.90%, or about 245k a year. I probably wouldn't buy them on margin tho.

After The inevitable collapse good luck eating worthless T-bills! Ehehe

Re: Most Illinois farmland is not owned by farmers

#194

Post by [deleted] »

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…

[deleted]

Re: Most Illinois farmland is not owned by farmers

#195

Post by comprev »

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…

This is probably similar in UK - although this is pure speculation.

A limited company owning the "land" which is then leased to the "farm" business that works it.

Possibly a "group" parent company is owned by the actual farmer.

I'm sure there will be good tax and legal protection reasons to structure farms in this way, not forgetting various government schemes which bring in revenue via grants and tax breaks.

Re: Most Illinois farmland is not owned by farmers

#196

Post by pinkmuffinere »

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…

I don’t know how to say this without seeming rude, but a few hundred acres is very small. 500 acres is less than a square mile. Is there something about your community that makes farms of that size more common than normal?

Edit: my (extended) family has a farm, and they cultivate X0,000 acres every year, though they own far less. They do plant a larger area than most for their community, but they’re not planting 20x their neighbors.

Re: Most Illinois farmland is not owned by farmers

#197

Post by WalterBright »

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…

> so we're all counted as "not farmers" here

Reminds me of when, a few years ago, the outrage headlines were "half of all US corporations didn't pay income tax last year!"

When one dug into it, it was because half the corporations didn't make any money that year.

Re: Most Illinois farmland is not owned by farmers

#198

Post by potato3732842 »

pinkmuffinere wrote: post #196
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…

I don’t know how to say this without seeming rude, but a few hundred acres is very small. 500 acres is less than a square mile. Is there something about your community that makes farms of that size more common than normal? Edit: my (extended) family has a farm, and they cultivate X0,000 acres every year, though they own far less. They do plant a larger area than most for their community, but they’re not planting 20x…

You're projecting "western desert but we pretend like it isn't" norms onto "eastern rich arable land" areas.

Re: Most Illinois farmland is not owned by farmers

#199

Post by fsckboy »

>Most Illinois farmland is not owned by farmers

it's not a new phenomenon, most people who bought the farm do not follow through and till that land...

ok ok, i'll stop. to people who are not native speakers of US English, "bought the farm" is a euphemism for dying https://en.wiktionary.org/wiki/buy_the_farm#English

from that link: "Etymology: Not known with certainty. Two long-held hypotheses are as follows: One describes combat soldiers wistfully wishing to go back home, buy a farm, and live peacefully there; later, after they had been killed in combat, their fellow soldiers would say that they had bought the farm (compare the established metaphor pattern of having gone to that big [whatever sort of nice place] in the sky). Another links the phrase to the idea that governments compensate farmers whose land is damaged by a military aircraft crash; a deceased pilot was thus said to have bought the farm, and the term eventually entered wider use."

Re: Most Illinois farmland is not owned by farmers

#200

Post by WalterBright »

skybrian wrote: post #192
9rx wrote: post #118

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 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…

Just wondering: what are the fun parts?

I suppose it's like programming. I enjoy programming. Most people hate it. Many people simply enjoy growing things.

I'm glad there are lots of types of people!

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