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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

#201

Post by jdhzzz »

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…

I'm in CT and was told one of the big advantages of a trust is speed. It can take 10-12 months to clear probate while the trust goes the the beneficiary(ies) more or less immediately.

Re: Most Illinois farmland is not owned by farmers

#202

Post by potato3732842 »

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?

[flagged]

Re: Most Illinois farmland is not owned by farmers

#203

Post by pinkmuffinere »

potato3732842 wrote: post #198
pinkmuffinere wrote: post #196

Earlier quoted context omitted.

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.

Interesting! It shocks me that you can run a farm on less than a square mile, I can practically plant that by hand, lol

Re: Most Illinois farmland is not owned by farmers

#204

Post by akgoel »

potato3732842 wrote: post #198
pinkmuffinere wrote: post #196

Earlier quoted context omitted.

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.

On a recent Odd Lots episode, they interviewed a Canadian lentil farmer. His claim was that a family of 3 (Father, Mother, Daughter) could farm 1200 acres of lentils with time left over due to modern automation.

So I guess it would depend on the automation level of the kind of crops you’re planting.

Re: Most Illinois farmland is not owned by farmers

#205

Post by potato3732842 »

yieldcrv wrote: post #126
TimorousBestie wrote: post #103

Earlier quoted context omitted.

There’s an exceedingly strong cultural drive to keep farmland “in the family” even if it impoverishes or otherwise inconveniences the descendants. I had a coworker once who lives in this region and owns some amount of farmland in a similar situation. He could have sold it and moved his family to at any point; even now I think it would be easily done, if not as easy as in the past. But of course he still lives there,…

I used to date a woman in Germany who was trying to shake her farm roots for corporate aspirations. I didn't understand German that well but apparently other Germans could tell her accent. No different than someone from Appalachia being assumed to be uneducated, and how we debate the validity of poor English versus "dialect". It seemed like an unnecessary distraction to her life. Eventually I met the father, and he w…

>The farmer son just got the short straw and had to adopt that persona.

Deluding yourself into believing in what you do is easier than getting up every morning knowing it's bullshit.

Certain areas of government, debt collection companies, insurance industry, there are literally high rises full of people who live that existence every single day.

Re: Most Illinois farmland is not owned by farmers

#206

Post by sandworm101 »

dylan604 wrote: post #175
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…

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.

Lol, a couple million. A single combine can easily be 1mil. And when you need them, you need more than one.

Re: Most Illinois farmland is not owned by farmers

#207

Post by potato3732842 »

toomuchtodo wrote: post #153
lotsofpulp wrote: post #131

Earlier quoted context omitted.

Land can’t be financed, businesses can be financed. Businesses that own land are much more easily financed, with the lowest interest rates. When you buy land to develop, you have to pony up cash for it. I have never heard of a lender lending without a cash flow producing asset as collateral.

This is factually inaccurate. The land is the collateral. If you don’t service the debt, they take back the land. 75-85% loan to value, 2-4% interest over treasury rates. Underwriting guidelines for the loan will differ if this is for speculation, development into housing, or agriculture.

You're being pedantic.

Land not occupied by some money making asset also being financed or used as collateral in the deal cannot be financed at rates that are not the lending equivalent of a "we really don't want this job so we're bidding high".

Re: Most Illinois farmland is not owned by farmers

#208

Post by toomuchtodo »

potato3732842 wrote: post #207
toomuchtodo wrote: post #153

Earlier quoted context omitted.

This is factually inaccurate. The land is the collateral. If you don’t service the debt, they take back the land. 75-85% loan to value, 2-4% interest over treasury rates. Underwriting guidelines for the loan will differ if this is for speculation, development into housing, or agriculture.

You're being pedantic. Land not occupied by some money making asset also being financed or used as collateral in the deal cannot be financed at rates that are not the lending equivalent of a "we really don't want this job so we're bidding high".

This is simply not true based on the interest rates and underwriting guidelines, and I own raw ag land that has been financed with nothing else besides a down payment and the land as collateral. Words mean things my dude. These are not hard money rates, these are credit products specifically for land with no business, cash flow, or other income stream at time of transfer. Being ignorant or unsophisticated is a choice.

Re: Most Illinois farmland is not owned by farmers

#209

Post by potato3732842 »

pfannkuchen wrote: post #107
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…

Land does weather inflation quite a bit better than T bills do, though.

As a land owner you should be much more worried about state and local laws than what goes on at the fed.

There are millions of Americans who own what would otherwise be "developable and valued as such" land that became basically worthless with the state passage of various environmental laws (particularly wetlands setback stuff) that make the juice not worth the squeeze except if the location were to become "major urban area" level dense while the municipalities passed zoning laws making it all but impossible for that to ever happen.

I guess when you think about it it's not that the land is less valuable. It's that there's no value left after doing what you'd need (endless engineering and construction hoops, lawyers, court, etc) to extract the value without the government just unilaterally deciding you no longer own the land and backing that up with violence.

Re: Most Illinois farmland is not owned by farmers

#210

Post by 9rx »

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 enjoy most of it, but, being a tech nerd at heart, I'm in my glory when I'm out in the field playing with the tech. More acres means more time to play. Something I don't feel I get enough of. I get the "I want to keep going" feeling when I disappointingly have to put everything back in the shed. Like I mentioned before, I figure doubling my acres would be the threshold where it goes from "I want to keep going" to "I'm good".
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