EC Nebraska | Big Ben - 10/29/2018 09:31
That would likely be a mathematical impossibility on these theoretical farms we are talking about, without someone having or getting an off-farm job. If the farm only supports the operator by cutting in to the land return, there’s likely no chance it’ll support two operators. It essentially ends up being the same scenario of renting the ground to someone else and getting a job in town for the last 10-20 years that we just laid out, except the new tenant is an aspiring family member rather than just another local farmer.
What usually seems to happen in such scenarios, is the older generation stays on the farm while the aspiring family member works for slave wages with no management influence. That “works” until they are fed up with it or someone dies and the farm is split up between all the heirs, then it all falls apart. These stories are here on NAT, and most of us know of such a story first hand with someone we know that used to farm.
So, back to my original question, if family living is coming out of the land return, is that really “making it work?” Doesn’t seem like it to me.
I should have paid a bit more attention to your numbers this morning. You're positing a farmer who is clearing only half the amount he could get in rent. That farmer isn't running a lean ship. In my area, at today's harvest prices, he should still be clearing close to the amount he could get in rent. So, no, your guy is not going to help any children start farming, either before or after he's dead. Regardless of whether or not he gets a town job. If there is a next generation, they probably aren't farming. And if he's only got 300 acres at age 60, then he probably didn't inherit any either. (I'm assuming he's in corn/bean country. I know almond groves are a little different)
As I said up the thread a ways, the only way any of his kids are going to be able to utilize any part of his farm is if they already have a separate farming operation of their own, where they are making the decisions. Guys who treat their kids as slave labor with no management input aren't helping them start farming. That's a separate issue.
Here, in my area, I can think of one 60+ farmer who only has 300 acres of owned ground. And his kids aren't coming back to the farm.
Most 60+ year old farmers here with viable farms own 600-1000 acres or more of ground that would rent for $250 or more at today's prices. So even if they're only netting $200/acre farming it themselves, that's a decent amount of income to work with. They've got a kid or two in the operation, hopefully most are giving the kid management input.
But, the direct answer to your question is that it will work for a while. 10-20 years is long enough for things to change. Maybe it only needs to work for 5 years, and by then something will have shifted. The established equity guys around here have farmed through a couple up and down cycles already. They're not going to cut and run just cause of a few bad years. There have been a lot of times in the past 40 years when family living came out of the land return. It's not that unusual.
Whether or not the next generation gets to farm is mostly up to them. Are there two or more non-farming heirs who want their money out? Then it's likely no one gets to farm. Regardless of whether or not Dad gets a town job. He may as well enjoy the farm as long as he can. |
The Big Reset underway..?? Corn to $2.. Beans to $6. When does it hit input prices?
