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Advisor
Posts: 1,319
Registered: ‎08-04-2010
0

30 to 50 thousand acres to go un-farmed?

Note: this post is part reality and part speculation, so take it for what it's worth. In my region of southern Michigan/northern Indiana, we had 3 very large and very aggressive BTOs. One of those was Stamp Farms. When Stamp went belly up in 2013, the land (40,000 acres) that he was operating got gobbled up by "Operator X" and Ceres Group (public knowledge). Last year, "Operator X" Ag Partners gobbled up or merged with Wiler Farms when Wiler Farms (10,000 acres) went out (also public knowledge). Here's where this story gets a little murky. Over the winter, word started circulating through the countryside that "Operator X" Ag Partners were having a tough time finding operating capital for the roughly 100,000 acres they operate on, and that they owe CHS over $70 million in un-paid fertilizer from the 2016 season. With all the rumors that come out of that operation, one has to take it with a grain of salt. What I do know is that there are large chunks of land sitting idle and growing weeds where the BTO's hired guys should be working. I personally have a friend that leases to "Operator X" and is now searching to find seed to plant since he has not been paid the first half of his land rent. This appears to be a sinking ship, so who gets stuck holding the bill- landlords, CHS, Ceres Group, or John Deere? Will all of those acres get planted? We commonly have thousands of acres that go unplanted in Michigan or Indiana due to wet conditions each year, but have we ever seen thousands of acres go unplanted due to one large operator going broke?

Honored Advisor
Posts: 7,318
Registered: ‎07-18-2011
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Re: 30 to 50 thousand acres to go un-farmed?

Why not.

 

We been consolidating farms sonce the 60's, sooner or later  

 

 

Question I have is are these the big farms or is there another growth layer backed by the global food corps....?

 

 

The next set of opportunities?

Veteran Advisor
Posts: 2,485
Registered: ‎02-11-2013
0

Re: 30 to 50 thousand acres to go un-farmed?

an interesting turn would be this.  those fellows that had rented/leased the ground to the bto.....did they send notice that they

were "terminated ?"  someone mentioned that the owner was going to get the seed and plant it himself............check with the

lawyer first.........it could be that if there was a crop, the bto would get it, since he had not been given a notice of termination.

even tho, he didn't pay, if he wasn't booted, there is a chance, he still has his foot in the door........

 

just saying

 

Advisor
Posts: 688
Registered: ‎10-18-2016
0

Re: 30 to 50 thousand acres to go un-farmed?

Interesting.  One would think that soybeans could go in even if it got late for corn.

Advisor
Posts: 286
Registered: ‎01-16-2013
0

Re: 30 to 50 thousand acres to go un-farmed?

50K acres isn't squat in the scheme of things.   I have two neighbors who planted nearly 1k acres in 2 days.   Throw a couple 24 row planters in there and be done in a week.

Contributor
Posts: 9
Registered: ‎01-23-2015
0

Re: 30 to 50 thousand acres to go un-farmed?

Well eventually the industry has to realize that the "BTO's" aren't going to work,,,,,,I was always told that back in the 1920's in my area there was "BTO's".. Stories of 1/4 mile long hog houses,,,,farms with bunks houses for all the farm hands needed to run the operation,  well needless to say they didn't work out,  NONE of them survived to the next generation.   No business can run in a lose forever.   

 

 

Now that I got off my soap box, The farmers won't get their rent check if the big guys went under, again,   because in this case the farmers are unsecured creditors.    Your out,, tough luck.   Like what was stated earlier make sure that the landlord has the right to the ground and that the lease has been terminated.  Honestly what the heck where the landowners doing renting to another BTO anyway??? getting burned once wasn't enough???  CHS, John Deere and other bigger companies, might have a chance since they have higher paid lawyers and what not..  Still can't get blood from a turnip...

 

 

 

 

 

Honored Advisor
Posts: 7,318
Registered: ‎07-18-2011
0

Re: 30 to 50 thousand acres to go un-farmed?

Because no one else will take his ground?

maybe

 

 

maybe that only happens on the fringe....... but it does happen ,,,,, sometimes the year before a sale or the new CRP contract.

 

Advisor
Posts: 1,319
Registered: ‎08-04-2010
0

Re: 30 to 50 thousand acres to go un-farmed?

All I can say is that this is a developing story and a soap opera for sure, involving what is believed to be America's largest row crop operation. The reason this is such a big deal is that it's time to plant corn and apparently, at least in this area, this operation doesn't have corn planters to plant with. The employees were told that John Deere took the planters in for "an update." It's becoming clear that some of this operation's land may be farmed this year, and some may not be farmed; you almost have to have a lawyer to terminate the contracts. Part of this operation's growth has been spurred by Ceres Group, which buys up large chunks of land and then turns around and leases the land to "Operation X." So the big question is, if Ceres group gets stiffed, will local land prices get soft? This may put to rest the idea that large corporations will be operating most on the farmland in the U.S. As much as I hate to admit it, "Operation X" had good looking crops in this area last year. The downfall of this operation will end up being the high land rents being paid (greed). The land rents being offered by this operation are nearly double the average rents being paid by local farmers. So a lot of the landlords in my area are actually farmers that saw more profit in leasing the land rather than farming it themselves and agreed to take a few years off, leasing the land to "Operation X."

Honored Advisor
Posts: 7,318
Registered: ‎07-18-2011
0

Re: 30 to 50 thousand acres to go un-farmed?

interesting and as we have been warned twice before ''''' the land is still under lease even if a payment is missed and a couple of years may be idle before the legal processes are finalized.  So owner go ahead and hop in there .... plant the crop... for the tennant........... it may still be his crop in the end.

 

And thanks for lending your planter....

 

 

Veteran Contributor
Posts: 109
Registered: ‎05-15-2010
0

Re: 30 to 50 thousand acres to go un-farmed?

Blacksandfarmer

 

what a soap opera PLEASE keep us updated on this interesting saga.

 

Now can you please explain the Ag Partners name and what it is. In my area of Minnesota there is an Ag coop south of me in north Iowa with about 12 locations that uses that name. And a google search shows other coops in Minnesota and other states using the name Ag partners. That is why i ask. A shallow search did not show anything for Michigan?

I will assume in your area Ag partners is a DBA for a private farmer?