6 ms·

Disagree. The family owned farmers care too. For the big equipment, like combines, there's a handful of people everyone pays to have their fields harvested. Thi

Disagree. The family owned farmers care too. For the big equipment, like combines, there's a handful of people everyone pays to have their fields harvested. This person get's compensation in the form of money and other services (someone else will plow their field for instance). People own their own tractors and share time to get things done, otherwise you'd have to own all of the equipment (which is only justified when you've got a giant factory farm). More of the small farms own new tractors, as the 70s era tractors have been overhauled to the point of junk. This is the current status of small town Iowa at least.

Loughla 11y ago
I know they care, too. But, they lack the political pull, money and time to address these issues. Small town Illinois is similar to Iowa apparently, except for the last section. We do share labor, and rent/trade labor for the use of large machinery. But, the market for older machinery is still very strong. I bought 2 1970's masseys at auction last year, and one small mid-90's JD this year. The bids were competitive, but the price was fair.
JoeAltmaier 11y ago
Iowan here. There are almost no family farms left at all. My neighbor would desperately like to be a farmer. But the scrubby 40-acre field across from his house just sold for $400,000. He'd get maybe 120 bushels of corn off of it. Current price per bushel: $3.80. So $456 income per acre == $18,240 per year. That's half the mortgate payments. Not to mention the cost of working the field. So a lost cause. The 13 farmers that lived and worked on my road when I was a kid are ALL gone. City folks rent those houses; corporations farm those fields.
- protomyth 11y ago
  "Iowan here. There are almost no family farms left at all." We still have family farms in North Dakota, so I guess it might be a regional thing. Also, for those counting incorporations (like a couple of newspapers), you have to be stupid not to incorporate.
  - JoeAltmaier 11y ago
    Sure, every farmer left is incorporated. My Dad led that movement in the 60's. I count a family farm as one that a family lives on, owns and works.
    - protomyth 11y ago
      That part of the comment was directed at some newspapers that seem to not get the fact that family farms understand liability, taxes, etc. to incorporate. I've seen some really dumb statistics on the subject. kudos to your Dad
  - deleted 11y ago
    [deleted]
- AJ007 11y ago
  Is this land that is being bought for future subdivisions? Definitely have seen this in areas by suburban areas. Certainly not all farming is being done at a loss?
  - kybernetyk 11y ago
    > Certainly not all farming is being done at a loss? A big corp can calculate differently from your small farmers. It's OK to them if the field turns profitable finally in 20 or 30 years because they have enough other sources of income to pay for the mortgage (or buy the field out of pocket). The small farmer on the other hand would be bankrupt by then.
  - randomdata 11y ago
    Farming is a lot like a startup, except maybe drawn out over more years than tech people like to see. You invest everything you have into a business that will return you very little, at least in the start. As you start to grow you put your profits into growth. Finally, as you reach retirement age the debts are hopefully paid off and you are actually making money for the first time. You're also sitting on millions of dollars worth of assets that are now fully in your name. When you are ready to retire, you sell it all. In other words: You live in poverty over your working career so that you can cash out later in life, while hopefully not going bust in the meantime. The profitability of the business is dependant on the market and the weather, but even more dependant on what stage your business is at. Early stage businesses are apt to lose money most years, but late stage businesses should make money most years.
    - AJ007 11y ago
      This sounds like you are describing what has occurred for farmers who started 30 or 40 years ago and are retiring now. I assume most farmers who retired decades ago weren't sitting on millions; certainly my grandfather wasn't.
  - JoeAltmaier 11y ago
    No, no development anywhere around. I'm not sure why the price went up. I bought my land in the 90's and it was ~$1000/acre. Now its 10X that. Probably a bubble.
- WorldWideWayne 11y ago
  Why do they want to be a corn farmer? (Just curious. I don't know anything about the business of outdoor farming in Iowa.) It seems like you could make the mortgage if you can grow specialty crops - http://www.profitableplantsdigest.com/10-most-profitable-specialty-crops-to-grow/ http://www.profitableplantsdigest.com/10-most-profitable-spe... Also, indoor growing is said to make certain crops grow 5x faster with 5x less resources. Here's one company that seems to be growing (they're opening a large facility in my state) - http://aerofarms.com/ http://aerofarms.com/
  - JoeAltmaier 11y ago
    Specialty crops depend on the availability of somebody to buy them. My brother tried that last, before he gave up.
    - rsync 11y ago
      An alternative to specialty crops is regular crops but higher up the value-add chain. Corn -> corn mash -> fermented corn mash -> ethanol -> bourbon -> aged bourbon 40 acres of corn gets you nowhere. 40 acres of corn converted to bourbon gets you generational wealth.
      - JoeAltmaier 11y ago
        Ha! This is what all Appalachian farmers did in the 1700's, with no roads and long distances to market. They converted corn to whiskey, concentrating the wealth. It was George Washington that ruined that with his regressive Whiskey Tax. Our modern caricature of the moonshining mountain yokel was created way back then, to marginalize poor farmers.
  - imglorp 11y ago
    Aeroponics sounds interesting, but the fact is we have almost a billion acres of farmland. Maybe some distant day we'll convert that to 200 million acres of aeroponics facilities, but that seems unlikely.
- hharnisch 11y ago
  Which town? I'd imagine this is pretty common in places near Des Moines/Cedar Rapids suburb type towns. My observations come from living in Blakesburg, IA -- town of 400 people.
  - JoeAltmaier 11y ago
    Southern Johnson County, south of Iowa City. Nothing suburban about it.
  - hharnisch 11y ago
    Small world Joe, I'm a Hawkeye. Go Hawks!
- mcguire 11y ago
  One wonders how the corporations farm them. The situation you describe doesn't sound like it would be any more economically feasible for them to work than your neighbor. (Hm. Random calculation: 120 bushels of corn at 56 lbs per bushel, per acre, is about 11 metric tons per hectare[1]. According to the FDA[2], the US average projected production for 2014/2015 is 10.7 metric tons (the world average is about half that), so your field is pretty decent.) [1] Thank you, units! You have: (181 * 56) pounds per acre You want: metrictons per hectare * 11.360947 / 0.088020829 [2] http://apps.fas.usda.gov/psdonline/circulars/production.pdf http://apps.fas.usda.gov/psdonline/circulars/production.pdf
  - sliverstorm 11y ago
    Mega corporations have economies of scale on their side for production costs, and likely much better interest rates on the land. So they can farm the land for cheaper, and the cost of the land on a per-annus basis is cheaper too.
    - talmand 11y ago
      Plus they have more access to getting government subsidies and price controls.
      - JoeAltmaier 11y ago
        Maybe not. Much of that stuff is designed to help family farms in particular.
  - adventured 11y ago
    The corporate farms can do it courtesy of massive scale leverage and typically inexpensive borrowing costs. The average person might pay 4.5% to 7% for that $400,000 property. A sizable corporation can borrow for 20 years at half those rates. Better yet, the big corporation has cash reserves and cash flow from their big existing operation, and can buy the property outright. That property then yields, say, 5% per year on the cash invested - which obliterates what all corporations are getting on cash or cash equivalents. The corporate farm can redirect 100% of that property's production toward paying for the property and farming costs, without harming itself in the process. If done correctly this becomes a perpetually expanding machine, the same premise that has led to consolidation in other previously highly fractured industries. Warren Buffett (among others) is presently attempting to do this in auto dealerships for example. It's the same reason Costco can operate quite successfully on a 2.x% operating profit margin, whereas most businesses will tip over rapidly with that slim of a buffer. The small farmer will constantly struggle to not drown by comparison.
- codingdave 11y ago
  That may be true in Iowa, but in Utah, there are still quite a few family farms. Even if we are a shrinking minority, it still seems worthwhile to fight to own our own small pieces of equipment.
- randomdata 11y ago
  There is only one farm on my road that doesn't have the next generation poised to take or already has been taken over by the operation, and even in that case I believe there is interest from the grandchildren. From my anecdotal experience, the future of family farms looks fairly bright.
protomyth 11y ago
It is still a thing for people to take their combines down south and work their way back to the north. My Dad and some of my coworkers did that in summer as youths. Pay is pretty good for someone with no degree and you don't get anytime to spend the money. Nicer now than back in the day since the cabs have all sorts of extras like satellite radio, air conditioning, and GPS.
TheCapn 11y ago
I agree with you, both local farmers I talk to and family are speaking of the new generation being brought up farming. There's still a lot of family involvement in the industry and those young farmers taking over the family land are extremely interested in relevant and modern technology. They'll be a huge driving force in the coming years. And farmers still talk. If Farmer Brown and Farmer Ted are sittin' down at the local terminal having their coffee they talk about their equipment. Word of mouth still matters huge in the areas I work in.

Loughla 11y ago

I know they care, too. But, they lack the political pull, money and time to address these issues. Small town Illinois is similar to Iowa apparently, except for the last section. We do share labor, and rent/trade labor for the use of large machinery. But, the market for older machinery is still very strong. I bought 2 1970's masseys at auction last year, and one small mid-90's JD this year. The bids were competitive, but the price was fair.

JoeAltmaier 11y ago

Iowan here. There are almost no family farms left at all. My neighbor would desperately like to be a farmer. But the scrubby 40-acre field across from his house just sold for $400,000. He'd get maybe 120 bushels of corn off of it. Current price per bushel: $3.80. So $456 income per acre == $18,240 per year. That's half the mortgate payments. Not to mention the cost of working the field. So a lost cause. The 13 farmers that lived and worked on my road when I was a kid are ALL gone. City folks rent those houses; corporations farm those fields.

protomyth 11y ago
"Iowan here. There are almost no family farms left at all." We still have family farms in North Dakota, so I guess it might be a regional thing. Also, for those counting incorporations (like a couple of newspapers), you have to be stupid not to incorporate.
- JoeAltmaier 11y ago
  Sure, every farmer left is incorporated. My Dad led that movement in the 60's. I count a family farm as one that a family lives on, owns and works.
  - protomyth 11y ago
    That part of the comment was directed at some newspapers that seem to not get the fact that family farms understand liability, taxes, etc. to incorporate. I've seen some really dumb statistics on the subject. kudos to your Dad
- deleted 11y ago
  [deleted]
AJ007 11y ago
Is this land that is being bought for future subdivisions? Definitely have seen this in areas by suburban areas. Certainly not all farming is being done at a loss?
- kybernetyk 11y ago
  > Certainly not all farming is being done at a loss? A big corp can calculate differently from your small farmers. It's OK to them if the field turns profitable finally in 20 or 30 years because they have enough other sources of income to pay for the mortgage (or buy the field out of pocket). The small farmer on the other hand would be bankrupt by then.
- randomdata 11y ago
  Farming is a lot like a startup, except maybe drawn out over more years than tech people like to see. You invest everything you have into a business that will return you very little, at least in the start. As you start to grow you put your profits into growth. Finally, as you reach retirement age the debts are hopefully paid off and you are actually making money for the first time. You're also sitting on millions of dollars worth of assets that are now fully in your name. When you are ready to retire, you sell it all. In other words: You live in poverty over your working career so that you can cash out later in life, while hopefully not going bust in the meantime. The profitability of the business is dependant on the market and the weather, but even more dependant on what stage your business is at. Early stage businesses are apt to lose money most years, but late stage businesses should make money most years.
  - AJ007 11y ago
    This sounds like you are describing what has occurred for farmers who started 30 or 40 years ago and are retiring now. I assume most farmers who retired decades ago weren't sitting on millions; certainly my grandfather wasn't.
- JoeAltmaier 11y ago
  No, no development anywhere around. I'm not sure why the price went up. I bought my land in the 90's and it was ~$1000/acre. Now its 10X that. Probably a bubble.
WorldWideWayne 11y ago
Why do they want to be a corn farmer? (Just curious. I don't know anything about the business of outdoor farming in Iowa.) It seems like you could make the mortgage if you can grow specialty crops - http://www.profitableplantsdigest.com/10-most-profitable-specialty-crops-to-grow/ http://www.profitableplantsdigest.com/10-most-profitable-spe... Also, indoor growing is said to make certain crops grow 5x faster with 5x less resources. Here's one company that seems to be growing (they're opening a large facility in my state) - http://aerofarms.com/ http://aerofarms.com/
- JoeAltmaier 11y ago
  Specialty crops depend on the availability of somebody to buy them. My brother tried that last, before he gave up.
  - rsync 11y ago
    An alternative to specialty crops is regular crops but higher up the value-add chain. Corn -> corn mash -> fermented corn mash -> ethanol -> bourbon -> aged bourbon 40 acres of corn gets you nowhere. 40 acres of corn converted to bourbon gets you generational wealth.
    - JoeAltmaier 11y ago
      Ha! This is what all Appalachian farmers did in the 1700's, with no roads and long distances to market. They converted corn to whiskey, concentrating the wealth. It was George Washington that ruined that with his regressive Whiskey Tax. Our modern caricature of the moonshining mountain yokel was created way back then, to marginalize poor farmers.
- imglorp 11y ago
  Aeroponics sounds interesting, but the fact is we have almost a billion acres of farmland. Maybe some distant day we'll convert that to 200 million acres of aeroponics facilities, but that seems unlikely.
hharnisch 11y ago
Which town? I'd imagine this is pretty common in places near Des Moines/Cedar Rapids suburb type towns. My observations come from living in Blakesburg, IA -- town of 400 people.
- JoeAltmaier 11y ago
  Southern Johnson County, south of Iowa City. Nothing suburban about it.
- hharnisch 11y ago
  Small world Joe, I'm a Hawkeye. Go Hawks!
mcguire 11y ago
One wonders how the corporations farm them. The situation you describe doesn't sound like it would be any more economically feasible for them to work than your neighbor. (Hm. Random calculation: 120 bushels of corn at 56 lbs per bushel, per acre, is about 11 metric tons per hectare[1]. According to the FDA[2], the US average projected production for 2014/2015 is 10.7 metric tons (the world average is about half that), so your field is pretty decent.) [1] Thank you, units! You have: (181 * 56) pounds per acre You want: metrictons per hectare * 11.360947 / 0.088020829 [2] http://apps.fas.usda.gov/psdonline/circulars/production.pdf http://apps.fas.usda.gov/psdonline/circulars/production.pdf
- sliverstorm 11y ago
  Mega corporations have economies of scale on their side for production costs, and likely much better interest rates on the land. So they can farm the land for cheaper, and the cost of the land on a per-annus basis is cheaper too.
  - talmand 11y ago
    Plus they have more access to getting government subsidies and price controls.
    - JoeAltmaier 11y ago
      Maybe not. Much of that stuff is designed to help family farms in particular.
- adventured 11y ago
  The corporate farms can do it courtesy of massive scale leverage and typically inexpensive borrowing costs. The average person might pay 4.5% to 7% for that $400,000 property. A sizable corporation can borrow for 20 years at half those rates. Better yet, the big corporation has cash reserves and cash flow from their big existing operation, and can buy the property outright. That property then yields, say, 5% per year on the cash invested - which obliterates what all corporations are getting on cash or cash equivalents. The corporate farm can redirect 100% of that property's production toward paying for the property and farming costs, without harming itself in the process. If done correctly this becomes a perpetually expanding machine, the same premise that has led to consolidation in other previously highly fractured industries. Warren Buffett (among others) is presently attempting to do this in auto dealerships for example. It's the same reason Costco can operate quite successfully on a 2.x% operating profit margin, whereas most businesses will tip over rapidly with that slim of a buffer. The small farmer will constantly struggle to not drown by comparison.
codingdave 11y ago
That may be true in Iowa, but in Utah, there are still quite a few family farms. Even if we are a shrinking minority, it still seems worthwhile to fight to own our own small pieces of equipment.
randomdata 11y ago
There is only one farm on my road that doesn't have the next generation poised to take or already has been taken over by the operation, and even in that case I believe there is interest from the grandchildren. From my anecdotal experience, the future of family farms looks fairly bright.

protomyth 11y ago

It is still a thing for people to take their combines down south and work their way back to the north. My Dad and some of my coworkers did that in summer as youths. Pay is pretty good for someone with no degree and you don't get anytime to spend the money. Nicer now than back in the day since the cabs have all sorts of extras like satellite radio, air conditioning, and GPS.

TheCapn 11y ago

I agree with you, both local farmers I talk to and family are speaking of the new generation being brought up farming. There's still a lot of family involvement in the industry and those young farmers taking over the family land are extremely interested in relevant and modern technology. They'll be a huge driving force in the coming years. And farmers still talk. If Farmer Brown and Farmer Ted are sittin' down at the local terminal having their coffee they talk about their equipment. Word of mouth still matters huge in the areas I work in.