East Arkansas |
The post below from Graintrader was in a long thread and I thought it was worthy of a discussion of its own.
It makes some sense when looking at the equity I build in equipment versus land equity that he may be onto something. If you are buying 10-20 year old equipment I believe you can build some actual equity in equipment. Granted when this equipment is sold it’s usually fully depreciated and fully taxable.
After reading several responses in the thread this post came from I would hate to be in an area with 20k/ac land cost with 1000 acre gross but maybe with the cost of equipment that equity is a place to build equity…
GrainTrader - 1/26/2026 16:30
All so you can rent it for $24,000 a year later on.
BUT, if a data center comes in and offers all the neighbors $100,000 an acre for theirs and you passed it up you are looking like a dud.
Now increase that down payment amount to the point the farm breaks even most years. That’s even scarier number.
Owning enough land to farm yourself or rent out in retirement used to be the light at the end of the tunnel. I’m wondering if it’s now to end up with $4,000,000 worth of equipment at your retirement sale and get 2.5 million of that after taxes and retire off of that? That’s probably enough equipment to farm 5,000-10,000 acres depending on how you operate. $25 an acre off of 7500 acres is just shy of $200,000. That’s a good living enough to let the wife stay home and buy health insurance if no major medical disallows that. (I haven’t enough ambition to farm that much, so I’d be out) |
Post from Graintrader on equipment
