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Just making it more competitive. Yield on corn 50 years ago was half what it is today, which is good for a growing population. Our neck of the woods in the 70

Just making it more competitive. Yield on corn 50 years ago was half what it is today, which is good for a growing population. Our neck of the woods in the 70s used to have 25 farms where now 1 family farms the entirety. If you're good at what you do (to the degree you can control), you'll survive and keep growing. Biggest issues are your kids getting taxed to oblivion on land they inherit (this kills the farm) and outside investors bidding land way above where it reasonably cashflows because it's "cheap". But don't feel bad for farmers. To inherit $10 million+ in land because your family's had it 100 years is a blessing most people don't get in life. https://www.nass.usda.gov/Charts_and_Maps/Field_Crops/cornyld.php https://www.nass.usda.gov/Charts_and_Maps/Field_Crops/cornyl...

hattmall 3y ago
But like they are literally killing themselves so it must not be that big of a blessing... How much is the inheritance tax?
- bombcar 3y ago
  It depends on the state, but even if you have a $5m exemption on inheritance, if you inherit $10m of farmland, you need cash to keep the land (or go into debt) or liquidate the land.
- bamfly 3y ago
  No federal estate tax on $10m of farm land (kicks in around $13m this year, from what I can tell—the so-called "death tax" is often framed as applying to a whole lot more people than it actually does). Further, I'm pretty sure there are ways to structure a business that'll prevent even amounts exceeding $13m from being affected—granted, that would require advance planning which may or may not have been done. The rest would vary state by state and depend on the relation to the deceased, but I'm pretty sure it'd be $0 or negligible in most cases, on a $10m estate, for spouse or children at least, even with minimal advance preparation.
  - farmguy 3y ago
    Yeah I'm not super sure of the specifics on "death tax", haven't spent time researching it enough. It's just a topic of conversation from time to time in the family. But the general strategy today is set up a generation skipping trust so that in the event the gov't decides to enact strict step up basis laws it doesn't blow the whole thing up.
- thephyber 3y ago
  Farms in a family trust are not subject to the death event that triggers inheritance tax.
themaninthedark 3y ago
Yeah, such a blessing that people are dying over it!
rcktmrtn 3y ago
> But don't feel bad for farmers. To inherit $10 million+ in land because your family's had it 100 years is a blessing most people don't get in life. ... I still think this is pretty sad. I married into family involved with farming and seeing this dilemma is not heartening. One of my in-laws is currently in farming proto-retirement (renting out land now and not actively farming), and I can vividly see how selling out is basically not an option for him. If you spend a lifetime cultivating practices of living modestly and working towards the ideal of the small family farm, a big pile of money: 1) does not interest you very much, since you've built your life around hobbies like going to the bar and socializing with a dwindling crowd of other people who have your lifestyle. Nouveau rich family farmers seldom seem to do much better with a windfall than lottery winners. 2) further, selling out really is the antithesis to what you spent your life doing. Basically you're saying that your lifestyle has outlived it's usefulness in the spirit of "Death of a Salesman" is worth more dead than alive. I'm probably being overly harsh sounding because I'm not an expert and I've been exposed to the idealist perspective in person quite a bit. But I do have pity for those who have been put in a hard place when they are suddenly surrounded by "game of thrones" and skepticism that massive consolidation will work out well in the long run. edit: and yeah, I get that adapting is also an option but by definition it's an option for increasingly few.

hattmall 3y ago

But like they are literally killing themselves so it must not be that big of a blessing... How much is the inheritance tax?

bombcar 3y ago
It depends on the state, but even if you have a $5m exemption on inheritance, if you inherit $10m of farmland, you need cash to keep the land (or go into debt) or liquidate the land.
bamfly 3y ago
No federal estate tax on $10m of farm land (kicks in around $13m this year, from what I can tell—the so-called "death tax" is often framed as applying to a whole lot more people than it actually does). Further, I'm pretty sure there are ways to structure a business that'll prevent even amounts exceeding $13m from being affected—granted, that would require advance planning which may or may not have been done. The rest would vary state by state and depend on the relation to the deceased, but I'm pretty sure it'd be $0 or negligible in most cases, on a $10m estate, for spouse or children at least, even with minimal advance preparation.
- farmguy 3y ago
  Yeah I'm not super sure of the specifics on "death tax", haven't spent time researching it enough. It's just a topic of conversation from time to time in the family. But the general strategy today is set up a generation skipping trust so that in the event the gov't decides to enact strict step up basis laws it doesn't blow the whole thing up.
thephyber 3y ago
Farms in a family trust are not subject to the death event that triggers inheritance tax.

themaninthedark 3y ago

Yeah, such a blessing that people are dying over it!

rcktmrtn 3y ago

> But don't feel bad for farmers. To inherit $10 million+ in land because your family's had it 100 years is a blessing most people don't get in life. ... I still think this is pretty sad. I married into family involved with farming and seeing this dilemma is not heartening. One of my in-laws is currently in farming proto-retirement (renting out land now and not actively farming), and I can vividly see how selling out is basically not an option for him. If you spend a lifetime cultivating practices of living modestly and working towards the ideal of the small family farm, a big pile of money: 1) does not interest you very much, since you've built your life around hobbies like going to the bar and socializing with a dwindling crowd of other people who have your lifestyle. Nouveau rich family farmers seldom seem to do much better with a windfall than lottery winners. 2) further, selling out really is the antithesis to what you spent your life doing. Basically you're saying that your lifestyle has outlived it's usefulness in the spirit of "Death of a Salesman" is worth more dead than alive. I'm probably being overly harsh sounding because I'm not an expert and I've been exposed to the idealist perspective in person quite a bit. But I do have pity for those who have been put in a hard place when they are suddenly surrounded by "game of thrones" and skepticism that massive consolidation will work out well in the long run. edit: and yeah, I get that adapting is also an option but by definition it's an option for increasingly few.