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West Central MN (between MMF and Larson's) | J.L. - 9/21/2013 22:47
http://cornandsoybeandigest.com/blog/perspectives-us-farm-debt This article would suggest while the ratio is low, the bulk of that debt is held by a few individuals. I could believe that and here is why: In my area there are several 500-1000 acre farms that are mostly owned with little if any debt against land and owners that are perfectly happy running older payed for machinery Then right across the fence there are operations that rent a high % of acres with rents on the high side and a love for new financed machinery. So If I grouped everyone together the debt to asset ratio would be quite low however I doubt the first group will help paying the bills of the second. If we are indeed in a downtrend, I think there will be farms that will be darn near bulletproof and there will be farms that will be in a world of hurt. My opinions only and worth what you payed for it.
I think this is a very astute observation. We have the same in our area. I had a successful guy in my area tell me that he knew alot of guys that were better farmers than him go under in the 80's he chalked it up to luck in some respects. He had a good first year or 2 prior to the crash, they didn't. Some was good business on his part, his gambles paid off theirs didn't. There are some of those 500-1000 that inherited the whole thing and never added anything but were good stewards of what they got. some that inherited a portion and built a portion. Some that started with a next to nothing and built most of it. I can respect all 3 types. 2 of those 3 didn't have perfect debt/asset ratios all the time, but they did have decent ones at the right times.
Our challenge on our farm is grow what we have responsibly using good (hopefully) business sense while having some luck to be positioned right at the right time.
The contrast to that can be trying to be too perfect. Ex) the guy that waited that one extra year to be able to pay for that 1500/ac 1st piece with no financing. Land went to 2000,= oh I will just wait it will come down. 10+ years later still haven't made the 1st purchase and land is 10000+. Maybe those guys will still get the last laugh, but at the present I am glad we have taken the bat off our shoulder a time or 2. If land drops 50% we are still not underwater. Luck or good business, I don't care either way as long as it works. Coversely if it drops 75%, the other guys will be genius's. Time will be the ultimate judge as I can't predict the future.
Sorry for the length, kinda thinking out loud. | |
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- Too much gloom, doom and wild speculation on here - coup : 9/21/2013 20:44
- RE: Too much gloom, doom and wild speculation on here - FTT : 9/21/2013 20:53
- RE: Too much gloom, doom and wild speculation on here - thekcirp : 9/21/2013 21:14
- Re: Too much gloom, doom and wild speculation on here - khall_12_34 : 9/21/2013 22:09
- RE: Heck, let's have another of those Freedom to - Markwright : 9/21/2013 22:10
- Re: Too much gloom, doom and wild speculation on here - 00rooster : 9/21/2013 22:20
- RE: Too much gloom, doom and wild speculation on here - cr39 : 9/21/2013 22:46
- RE: Too much gloom, doom and wild speculation on here - J.L. : 9/21/2013 22:47
- RE: Too much gloom, doom and wild speculation on here - dairyman78 : 9/22/2013 07:37
- RE: Too much gloom, doom and wild speculation on here - mjl : 9/22/2013 07:59
- Re: Too much gloom, doom and wild speculation on here - Scillfarmer : 9/22/2013 09:40
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Too much gloom, doom and wild speculation on here
