Most Illinois farmland is not owned by farmers • Hacker News Board

Re: Most Illinois farmland is not owned by farmers

#271

Post by jldugger » Thu, Jul 31, 2025, 9:21 PM UTC

dismalaf wrote: post #191

jldugger wrote: post #168

Earlier quoted context omitted.

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 propert…

I mean, you _can_ buy 20 year bonds on margin. Reg T just limits you to 50% in most (all?) cases. And it doesn't buy you a job or a demand mountain of insurance contracts!

Re: Most Illinois farmland is not owned by farmers

#272

Post by yieldcrv » Fri, Aug 01, 2025, 12:53 AM UTC

Loughla wrote: post #159

yieldcrv wrote: post #124

Earlier quoted context omitted.

> all without the ick that comes with running other businesses can you elaborate on this perception?

As a farmer my customer is the grain elevator, co-op, or sale barn. I don't have to hustle for sales, just play the market. At least when I still farmed that's what it was. I answered to myself, not to customers or clients.

All commodities extraction/producing businesses are like that

And there are more outside of the commodities space

Well, thanks for pointing out what may be a common perspective amongst farmers, I think I prefer other businesses without the ick of running a farm

Re: Most Illinois farmland is not owned by farmers

#273

Post by skeezyboy » Fri, Aug 01, 2025, 10:37 AM UTC

dismalaf wrote: post #259

skeezyboy wrote: post #247

Earlier quoted context omitted.

You say you only calculate rate of return on the "capital you put down"...Im not following here, do you think because youre spending profit from the farming operation that loan for the farm is paying for itself? The tbills pay for themself.... you have to work the farm for 20 years to pay back that 5 million. Its an apples and oranges comparison there.

You're right, it's not an apples to apples comparison, just like running any business will yield more than straight investments. But opportunity cost is a thing. No land equals no farm and no opportunity for that return. If not farming, what kind of job can the would-be farmer get and how would they accrue enough capital for their return on T-bills + income to equal their farming income paying off the land? Also my c…

he could spend 90% on tbills, 10% on a small farm, and then each year take the 2.5% the tbills generate and buy more farm fields, working the farm as it grows, or something like that, a mix of finance and farming

Re: Most Illinois farmland is not owned by farmers

#274

Post by ethbr1 » Fri, Aug 01, 2025, 12:45 PM UTC

9rx wrote: post #252

dataflow wrote: post #244

Earlier quoted context omitted.

> I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people... What about all the non-organic farming, use of pesticides/antibiotics/etc., poor treatment of animals (sometimes), water waste in some case…

> What about... That is all much the same as the prices being set in Chicago: Someone else has made the decision. While someone else no doubt feels the "ick", I am but the customer who is being taken advantage of. (Well, except in the case of Monsanto — they closed up shop years ago) > Your average local job (waiter... It seems you, deep down, even understand that. Comparing farming to being a waiter as opposed to th…

To the whataboutism, at the end of the day a farmer has a physical product they can look at, and they know the land it came from.

There’s a certain satisfaction there that most people don’t get out of their ‘cog somewhere in the middle of a machine’ jobs.

Re: Most Illinois farmland is not owned by farmers

#275

Post by forkeep » Fri, Aug 01, 2025, 3:42 PM UTC

yieldcrv wrote: post #124

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…

> all without the ick that comes with running other businesses can you elaborate on this perception?

[dead]

Re: Most Illinois farmland is not owned by farmers

#276

Post by 9rx » Fri, Aug 01, 2025, 3:53 PM UTC

ethbr1 wrote: post #274

9rx wrote: post #252

Earlier quoted context omitted.

> What about... That is all much the same as the prices being set in Chicago: Someone else has made the decision. While someone else no doubt feels the "ick", I am but the customer who is being taken advantage of. (Well, except in the case of Monsanto — they closed up shop years ago) > Your average local job (waiter... It seems you, deep down, even understand that. Comparing farming to being a waiter as opposed to th…

To the whataboutism, at the end of the day a farmer has a physical product they can look at, and they know the land it came from. There’s a certain satisfaction there that most people don’t get out of their ‘cog somewhere in the middle of a machine’ jobs.

Both my farm and non-farm businesses have a physical product, though. In fact, in both cases the product is food, as it happens. I expect the farm business is less "icky" because it is entirely dehumanized. You don't set the price, you don't have to win over customers, and increasingly with more and more automation you don't even interact with the customer at all. There is no "Poor service. 0 stars." or "Too expensive! Scam." to contend with.

Re: Most Illinois farmland is not owned by farmers

#277

Post by pfdietz » Fri, Aug 01, 2025, 6:48 PM UTC

petcat wrote: post #85

pfdietz wrote: post #70

Earlier quoted context omitted.

A report on NY farms and farmland, covering the 2012-2022 period. https://www.osc.ny.gov/files/reports/pdf/profile-of-agricult... It's interesting how little of NY state is farmland (21.6%). "When the extended family of the farmer is taken into consideration, 94.6 percent of New York farms are family-owned."

New York state has gone to great lengths over the last 40 years to highly incentivize (read: subsidize) local, family farmers and deter megacorp speculators and investors. At this point I think it's basically impossible to actually lose money on a farm as long as it's family/individual owner-operator. It's also why NY state cropland is among the most expensive in the country. Once you get it, the value will only ever…

I don't think that statement about the price of cropland in NY state is accurate. If you go to https://acretrader.com/resources/farmland-values/farmland-pr... you'll find it's not very expensive compared to, say, Illinois, California, or (!) New Jersey. It's well below the average for the country as a whole, in fact.

A good deal of the farmland in the NY county where I live, Tompkins County, has gone back to forest since the beginning of the 20th century (although not to the extent in, say, Massachusetts). This suggests to me that just holding farmland here cannot be much of a moneymaker, since if it were we'd be seeing this land brought back.

https://www.cabidigitallibrary.org/doi/pdf/10.5555/200430940...

Re: Most Illinois farmland is not owned by farmers

#278

Post by pfannkuchen » Sat, Aug 02, 2025, 6:24 AM UTC

lotsofpulp wrote: post #254

pfannkuchen wrote: post #142

Earlier quoted context omitted.

I think this is strictly not a true statement? Land value can decrease in real terms at the same time inflation is happening, sure. But it isn’t revalued by inflation in the way that a contract denominated in the inflationary currency is. Can you explain more about what you mean?

I don’t understand what your comment could mean. You buy land at time t for price x. You sell land at time t+1 for price y. If (y-x)/x is is less than the same calculation for whatever other asset you would have bought (I would use sp500), then you lost money.

I didn’t say that land was as good as the s&p at appreciating in value. That is a completely different claim which I wouldn’t assert. S&P has appreciated considerably more than inflation, right? So saying that something does or doesn’t track inflation is completely different from whether you lost money compared to if you’d instead gone with the s&p.

Re: Most Illinois farmland is not owned by farmers

#279

Post by dismalaf » Sat, Aug 02, 2025, 6:32 AM UTC

skeezyboy wrote: post #273

dismalaf wrote: post #259

Earlier quoted context omitted.

You're right, it's not an apples to apples comparison, just like running any business will yield more than straight investments. But opportunity cost is a thing. No land equals no farm and no opportunity for that return. If not farming, what kind of job can the would-be farmer get and how would they accrue enough capital for their return on T-bills + income to equal their farming income paying off the land? Also my c…

he could spend 90% on tbills, 10% on a small farm, and then each year take the 2.5% the tbills generate and buy more farm fields, working the farm as it grows, or something like that, a mix of finance and farming

If $1 million in cash means you can get a $4 million plot of land, spending 90% on T-bills means you have only $900k in bonds and a measly $400k farm (25% down). So you have 1/10th of the land and your bonds are yielding $22,500...

What really happens is as you pay off equity on your land and equipment, you leverage that into buying more land and more equipment.

Successful restaurateurs buy more restaurants, successful tech startups hire more devs and buy more servers, successful farmers buy more land.

Actual (successful) business activity yields more than investments, which is why they reinvest in themselves over stock markets.

Re: Most Illinois farmland is not owned by farmers

#280

Post by dataflow » Sun, Aug 03, 2025, 12:53 AM UTC

9rx wrote: post #252

dataflow wrote: post #244

Earlier quoted context omitted.

> I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people... What about all the non-organic farming, use of pesticides/antibiotics/etc., poor treatment of animals (sometimes), water waste in some case…

> What about... That is all much the same as the prices being set in Chicago: Someone else has made the decision. While someone else no doubt feels the "ick", I am but the customer who is being taken advantage of. (Well, except in the case of Monsanto — they closed up shop years ago) > Your average local job (waiter... It seems you, deep down, even understand that. Comparing farming to being a waiter as opposed to th…

> Technically farming is like owning the restaurant, but in practice, because everything is laid out for you and decisions are made elsewhere, it feels more like being the waiter. You are layers removed from the "ick".

To be blunt: I don't buy this... at all. Farmers have (in theory, and to some extent in practice) choice in (a) what they grow, (b) whether to grow organic/GMO/etc., (c) what pesticides/fertilizers/etc. they use and how much, (d) how they treat any animals they have, (e) whom they sell to... I could go on. Of course competition and supply and demand constrain what they can do, but that's true for most if not all business owners, including restaurant owners.

Waiters are not* like this... at all. They have -- by definition of their jobs -- zero control over the dishes, the recipe, the cooking, what is ordered, whom to serve, etc.

Therefore the idea that "technically" the farmer is like the restaurant owner but "in practice" like the waiter therefore makes no sense to me. They are (extremely) more similar to the restaurant owner in basically every dimension, not just "theoretically".