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Honored Advisor
Posts: 17,976
Registered: ‎05-13-2010

Farm bankruptcies

Since it`s the weekend, I don`t think it`ll clutter up the marketing page too much for a separate post.  The farm bankruptcy rate is or has been inconsequential because of the nature of the business and the fact most farms are sole proprietaries, so living expenses and every other personal spending could send the farm into bankruptcy.  Liberals will love this, but if a family member has high medical expense that health insurance doesn`t cover, the farm business could go broke.  Or Two week Hawaii vacations or mink coats and diamond rings for the high maintenance misses, all kinds of stuff.

 

There`s a saying that in the restaurant business, it has to go broke 4 or 5 times before a new owner has purchased the equipment cheap enough that it cashflows....that`s just the nature of the business.   Farming maybe isn`t that bad, but there`s a lot of factors in why a farm goes under, a common one is probably that you weren`t born into a wealthy enough family  Smiley Happy

 

And farming has changed (under statement of the year) it used to be, if you had a strong back and weak mind, you could muddle your way through...not that way anymore.   As a matter of fact, a strong back might be a disadvantage in modern agriculture, you need a strong mind to deal with people to delegate, delegate, delegate the $15/hr grunt work done.  Deal with landlords, input suppliers, mechanics, dealerships, grain merchandizers.   And hire yahoos to run the machinery and know how to motivate them. 

 

But we`ve all known a guy in the community that could`ve retired the day he was born, but he decided to take over the family farm operation and went broke in a short time.  Or the guy that was just "given" a cosigned loan at the bank from dad and he parlayed it into a successful big time operation.   Get in a Monopoly game with some people and they just have the nack and have hotels on Boardwalk while others run into trouble trying to land on Reading railroad.  

 

A old guy told me when corn was $7 that "This $7 corn will break more farmers than $2 corn did" ...it could be he`ll turn out right, the fat lady isn`t on the stage yet.