7 ms·

How to Get into Farming with No Money (1980)

123 points by docbrown 7y ago

croh 7y ago
i just came across this article in google and tried to submitted on HN. what a coincidence, u did tat just 2 hours back.
- thedaemon 7y ago
  Their karma is much higher. It's a vetting process here. https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html Read the FAQ / Rules.
  - icebraining 7y ago
    What does that have to do with having submitted earlier?
  - OJFord 7y ago
    It doesn't matter, GP would just have been redirected here in this case, since the recent submission already existed.
  - croh 7y ago
    lol lot of downvotes. hard to understand. i was just searching about farming. want to point out randomness. wat astonished me, even this is not hot topic, somebody submitted same link to HN just few hours ago. didnt get why too many downvotes to point it out for fun.
    - jessaustin 7y ago
      In the last month downvotes seem to have made a break with reality. I used to argue vehemently that one could learn from them; now I'm not so sure...
burmer 7y ago
Obligatory Mitchell and Webb: https://www.youtube.com/watch?v=_pDTiFkXgEE https://www.youtube.com/watch?v=_pDTiFkXgEE
blueyes 7y ago
I think it is much easier to get out of farming with no money, than to get into it. In the US, policy has punished rural communities and farmers for a long time: https://www.amazon.com/Harvest-Rage-Oklahoma-City-Beginning/dp/0813332931 https://www.amazon.com/Harvest-Rage-Oklahoma-City-Beginning/...
- 52-6F-62 7y ago
  At least these days. I sadly don’t think much of this advice is usable in terms of finding someone to take you in, give you feed and room and board and money. Most farmers where I grew up—even smaller farms hired temporary workers and gave them bunkhouses. At the end of the season they went off and brought the money back to their families—money not worth much here but worth a lot back home. The advice about seeing value in redefining objects for their other potentials is great though. One I grew up with. Maybe something quite valuable to the high (read: even higher) consuming culture of the present. Interesting read.
  - prawn 7y ago
    Can you clarify that bunkhouse point? Isn't getting a bunkhouse and pay similar enough to what the author had suggested? Or do you mean that you'd not be competitive with salary demands if you were to stay on-site year round and deal with local costs?
    - Danieru 7y ago
      The author is talking about farms where there exists an original farm house that has since been super seceded by a nicer house. Thus there is in effect room for a while second household. A bunkhouse will have little more than a bed. In effect the author is talking about a by gone era when a single family would do or could do all the work on a farm. Since then average farm sizes have gone up. Wages have gone down, and work is done by either by machines, chemicals, or low skilled hired hands. Also new in the past five years has been extreme appreciation on the value of farm land. Farm land is now getting treated like forest land was a decade or so ago where a bunch of university funds and PE speculated. Now is not a good time to try low scale farming.
pugworthy 7y ago
Followup article: "How to stay in farming and make no money"
- pjkundert 7y ago
  “How to make a small fortune in farming”. Start out with a large fortune.
  - cardamomo 7y ago
    I was about to share the same joke, which I was recently told by a worker at a California vineyard. In the major wine-growing valleys of California, land now sells for millions of dollars an acre, hence the large fortune necessary for entry.
Ocysellus 7y ago
This seems really useful, especially in an age where there's food insecurity.
taneq 7y ago
> An important item here, as well as in the future, is to deal on a CASH basis. You MUST NOT borrow to pay later. I don’t want to give all the reasons for everything I’m recommending — you will have to trust them. Pay as you go, EXCEPT for a SINGLE exception (later stated) is the best. A farm is a business. Starting a business on a cash-only basis is possible and arguably safer than borrowing, but it's very slow going. The way most farmers get started is they take out a great stonkin' loan from the bank ($10mil+) and buy land, stock, machinery etc. They then run their newly established farm and try to turn enough of a profit to pay the interest plus a bit of capital. That's why farmers tend to be "asset rich and cash poor" for the first 20-30 years and then (if they're both diligent and lucky) are suddenly super wealthy once they've paid their loans off. (Source: dairy-farming relatives)
- toasterlovin 7y ago
  Small bit of pedantry: the nature of paying off a large loan over 30 years is that you gradually become wealthier at an accelerating rate. The sudden change after the mortgage is paid off is to cash flow, not wealth.
  - taneq 7y ago
    True, I should have said "suddenly have loads of cash once they've paid their loans off."
- User23 7y ago
  Used to be the federal government offered sweetheart deals on loans to people who wanted to be farmers. I'm talking $300k+ in the 70s.
- sertorius 7y ago
  Worth pointing out that at the time the article was written in 1980, it was the 100-year high in interest rates, possibly north of 20% in many countries.
  - taneq 7y ago
no_wizard 7y ago
I grew up in farm country. Notably, it was mostly small family farms or co-operative farms that I lived around[0] The observation I made about farming that always made it difficult (financially) was that all the wealth was tied up in things. Your acres, your livestock/crops, your home(s) and other property. High value equipment as well (tractors aren't cheap, neither are their accessories). The issue was always turning these things into cash. So mortgages were one way (though if I'm being honest any one who has run a large scale farming operation probably doesn't lean on the mortgage. You can get agribusiness loans with much better terms and crop/livestock insurance[1]). Contrary to popular belief though, the land that is actually farmed is mostly leased/rented, but its typically a long term deal, so you don't have to borrow millions of dollars just to increase acreage [2] This was something that large corporations don't have such trouble with (not to mention, most large agriculture companies have a portfolio of assets that they make money from, not just their production). I also noted that those in good co-operatives didn't have as much of an issue with this either (co-ops are good market makers and can help small farmers with buying power if they need to change crops quickly in response to market demand. See all the bankruptcies and delinquencies hitting wheat farmers right now [3] some of which is in part to the trade issues we're having with China. They're a huge net importer of certain cash crops. Most of these guys were all in on their cash crop, without a good way to get ahead of market demand to re-calibrate their crops. Livestock is much harder in this sense, but its still doable) This is the common reason why older farmers tend to sell (beyond simply crushing debt. It does happen for a lot of reasons. I'm not trying to under sell this. its just hard to write up a lengthy post here without it becoming an article). So they can actually cash out [0]https://www.ufcmn.com/About-Us https://www.ufcmn.com/About-Us [1]https://www.farmermac.com/ https://www.farmermac.com/ [2]https://www.ers.usda.gov/topics/farm-economy/land-use-land-value-tenure/farmland-ownership-and-tenure/ https://www.ers.usda.gov/topics/farm-economy/land-use-land-v... [3]https://www.wsj.com/articles/this-one-here-is-gonna-kick-my-buttfarm-belt-bankruptcies-are-soaring-11549468759 https://www.wsj.com/articles/this-one-here-is-gonna-kick-my-... EDIT: if the people of HN will it, I could do a long write about about Agriculture economics. I've got a strong background here.
- tomcam 7y ago
  Please do write the article!
rmason 7y ago
There's another way that I've seen people do it and that's farming as a service. You get people to give you cash upfront for a subscription that guarantees them a certain amount of fruit or vegetables. You rent all your equipment by the hour to plow and plant the field. Because your subscribers pay you upfront you have no need to borrow money. The problem with subscription farming? You have to grow what your customers want to buy not what you want to plant. If you have a natural disaster you may need to refund some of your customers money. You also have to learn to sell which to some people is anathema. But I've seen people successfully do it. There are even people doing it in the inner city of Detroit. In Detroit with the city selling lots for $100 it may pay to buy your land upfront. You also can use city water for irrigation.
foxhop 7y ago
The 8 forms of capital http://www.appleseedpermaculture.com/8-forms-of-capital/ http://www.appleseedpermaculture.com/8-forms-of-capital/
rurban 7y ago
The modern American way is to announce it on a website, promise to make a movie, and do everything with crowd-founding and hire a bunch of college kids for nothing, plus two Mexicans. Actual knowledge of the business not required. See the current movie "The biggest little farm". https://www.sundance.org/projects/the-biggest-little-farm https://www.sundance.org/projects/the-biggest-little-farm The previous famous way was "Farmer John" near Chicago, which was similar, but more of a collective.

123 points by docbrown 7y ago

croh 7y ago

i just came across this article in google and tried to submitted on HN. what a coincidence, u did tat just 2 hours back.

thedaemon 7y ago
Their karma is much higher. It's a vetting process here. https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html Read the FAQ / Rules.
- icebraining 7y ago
  What does that have to do with having submitted earlier?
- OJFord 7y ago
  It doesn't matter, GP would just have been redirected here in this case, since the recent submission already existed.
- croh 7y ago
  lol lot of downvotes. hard to understand. i was just searching about farming. want to point out randomness. wat astonished me, even this is not hot topic, somebody submitted same link to HN just few hours ago. didnt get why too many downvotes to point it out for fun.
  - jessaustin 7y ago
    In the last month downvotes seem to have made a break with reality. I used to argue vehemently that one could learn from them; now I'm not so sure...

burmer 7y ago

Obligatory Mitchell and Webb: https://www.youtube.com/watch?v=_pDTiFkXgEE https://www.youtube.com/watch?v=_pDTiFkXgEE

blueyes 7y ago

I think it is much easier to get out of farming with no money, than to get into it. In the US, policy has punished rural communities and farmers for a long time: https://www.amazon.com/Harvest-Rage-Oklahoma-City-Beginning/dp/0813332931 https://www.amazon.com/Harvest-Rage-Oklahoma-City-Beginning/...

52-6F-62 7y ago
At least these days. I sadly don’t think much of this advice is usable in terms of finding someone to take you in, give you feed and room and board and money. Most farmers where I grew up—even smaller farms hired temporary workers and gave them bunkhouses. At the end of the season they went off and brought the money back to their families—money not worth much here but worth a lot back home. The advice about seeing value in redefining objects for their other potentials is great though. One I grew up with. Maybe something quite valuable to the high (read: even higher) consuming culture of the present. Interesting read.
- prawn 7y ago
  Can you clarify that bunkhouse point? Isn't getting a bunkhouse and pay similar enough to what the author had suggested? Or do you mean that you'd not be competitive with salary demands if you were to stay on-site year round and deal with local costs?
  - Danieru 7y ago
    The author is talking about farms where there exists an original farm house that has since been super seceded by a nicer house. Thus there is in effect room for a while second household. A bunkhouse will have little more than a bed. In effect the author is talking about a by gone era when a single family would do or could do all the work on a farm. Since then average farm sizes have gone up. Wages have gone down, and work is done by either by machines, chemicals, or low skilled hired hands. Also new in the past five years has been extreme appreciation on the value of farm land. Farm land is now getting treated like forest land was a decade or so ago where a bunch of university funds and PE speculated. Now is not a good time to try low scale farming.

pugworthy 7y ago

Followup article: "How to stay in farming and make no money"

pjkundert 7y ago
“How to make a small fortune in farming”. Start out with a large fortune.
- cardamomo 7y ago
  I was about to share the same joke, which I was recently told by a worker at a California vineyard. In the major wine-growing valleys of California, land now sells for millions of dollars an acre, hence the large fortune necessary for entry.

Ocysellus 7y ago

This seems really useful, especially in an age where there's food insecurity.

taneq 7y ago

> An important item here, as well as in the future, is to deal on a CASH basis. You MUST NOT borrow to pay later. I don’t want to give all the reasons for everything I’m recommending — you will have to trust them. Pay as you go, EXCEPT for a SINGLE exception (later stated) is the best. A farm is a business. Starting a business on a cash-only basis is possible and arguably safer than borrowing, but it's very slow going. The way most farmers get started is they take out a great stonkin' loan from the bank ($10mil+) and buy land, stock, machinery etc. They then run their newly established farm and try to turn enough of a profit to pay the interest plus a bit of capital. That's why farmers tend to be "asset rich and cash poor" for the first 20-30 years and then (if they're both diligent and lucky) are suddenly super wealthy once they've paid their loans off. (Source: dairy-farming relatives)

toasterlovin 7y ago
Small bit of pedantry: the nature of paying off a large loan over 30 years is that you gradually become wealthier at an accelerating rate. The sudden change after the mortgage is paid off is to cash flow, not wealth.
- taneq 7y ago
  True, I should have said "suddenly have loads of cash once they've paid their loans off."
User23 7y ago
Used to be the federal government offered sweetheart deals on loans to people who wanted to be farmers. I'm talking $300k+ in the 70s.
sertorius 7y ago
Worth pointing out that at the time the article was written in 1980, it was the 100-year high in interest rates, possibly north of 20% in many countries.
- taneq 7y ago

no_wizard 7y ago

I grew up in farm country. Notably, it was mostly small family farms or co-operative farms that I lived around[0] The observation I made about farming that always made it difficult (financially) was that all the wealth was tied up in things. Your acres, your livestock/crops, your home(s) and other property. High value equipment as well (tractors aren't cheap, neither are their accessories). The issue was always turning these things into cash. So mortgages were one way (though if I'm being honest any one who has run a large scale farming operation probably doesn't lean on the mortgage. You can get agribusiness loans with much better terms and crop/livestock insurance[1]). Contrary to popular belief though, the land that is actually farmed is mostly leased/rented, but its typically a long term deal, so you don't have to borrow millions of dollars just to increase acreage [2] This was something that large corporations don't have such trouble with (not to mention, most large agriculture companies have a portfolio of assets that they make money from, not just their production). I also noted that those in good co-operatives didn't have as much of an issue with this either (co-ops are good market makers and can help small farmers with buying power if they need to change crops quickly in response to market demand. See all the bankruptcies and delinquencies hitting wheat farmers right now [3] some of which is in part to the trade issues we're having with China. They're a huge net importer of certain cash crops. Most of these guys were all in on their cash crop, without a good way to get ahead of market demand to re-calibrate their crops. Livestock is much harder in this sense, but its still doable) This is the common reason why older farmers tend to sell (beyond simply crushing debt. It does happen for a lot of reasons. I'm not trying to under sell this. its just hard to write up a lengthy post here without it becoming an article). So they can actually cash out [0]https://www.ufcmn.com/About-Us https://www.ufcmn.com/About-Us [1]https://www.farmermac.com/ https://www.farmermac.com/ [2]https://www.ers.usda.gov/topics/farm-economy/land-use-land-value-tenure/farmland-ownership-and-tenure/ https://www.ers.usda.gov/topics/farm-economy/land-use-land-v... [3]https://www.wsj.com/articles/this-one-here-is-gonna-kick-my-buttfarm-belt-bankruptcies-are-soaring-11549468759 https://www.wsj.com/articles/this-one-here-is-gonna-kick-my-... EDIT: if the people of HN will it, I could do a long write about about Agriculture economics. I've got a strong background here.

tomcam 7y ago
Please do write the article!

rmason 7y ago

There's another way that I've seen people do it and that's farming as a service. You get people to give you cash upfront for a subscription that guarantees them a certain amount of fruit or vegetables. You rent all your equipment by the hour to plow and plant the field. Because your subscribers pay you upfront you have no need to borrow money. The problem with subscription farming? You have to grow what your customers want to buy not what you want to plant. If you have a natural disaster you may need to refund some of your customers money. You also have to learn to sell which to some people is anathema. But I've seen people successfully do it. There are even people doing it in the inner city of Detroit. In Detroit with the city selling lots for $100 it may pay to buy your land upfront. You also can use city water for irrigation.

foxhop 7y ago

The 8 forms of capital http://www.appleseedpermaculture.com/8-forms-of-capital/ http://www.appleseedpermaculture.com/8-forms-of-capital/

rurban 7y ago

The modern American way is to announce it on a website, promise to make a movie, and do everything with crowd-founding and hire a bunch of college kids for nothing, plus two Mexicans. Actual knowledge of the business not required. See the current movie "The biggest little farm". https://www.sundance.org/projects/the-biggest-little-farm https://www.sundance.org/projects/the-biggest-little-farm The previous famous way was "Farmer John" near Chicago, which was similar, but more of a collective.