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Honored Advisor

Re: Illinois Family Farms -- anybody affected?

Jeff,-------------------After a little thought----------this idea surfaced.

 

Grew up watching the neighbor to see what works and doesn't.--------------cheap research.

Isn't it interesting how we see and explore new technology and wash ourselves in it til we see all the benefits.----------but if we pay attention, someone is breaking their neck(and a banker) to show us what it can't do.

 

Makes You have to wonder how many were believing the hype from Illinois Family Farms web site,  but then a lot of us believed the sky is falling scheme from the carbon credit crowd.  Always another public piggy bank to be broken.

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Advisor

Re: Illinois Family Farms -- anybody affected?

I agree.  But even losses at the CME has a paper trail which auditors can track.  Money taken out by fraudulent means is traceable, but harder to spot.  All it takes is a couple co-conspirators to set up dummy corporations or entities to siphon off funds that looks legititmate from an auditor's point of view, unless they hit the jackpot and their statistical reviews actually goes deeper into the files.  A general audit can only spot fraud or accounting misdeeds if their specific inquiry hits that transaction on the nose.

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Honored Advisor

Re: Illinois Family Farms -- anybody affected?

Someone had to have been asleep at the switch, or just hoping against hope that this one was going to pull itself out of the tailspin.  I am not a financial genius, but at some point, wasn't anyone worried about an enterprise being leveraged at 20 times its worth???????

 

To me, this is no different than gambling...getting in too deep, and rolling the dice with the money meant to pay the rent.  Anyone with half a brain knew that he couldn't pull a rabbit out of such an empty hat..soi, you would be looking at either a delusional personality, or one with bad intent.  There isn't much middle ground to me.   

 

I have always said that sometimes, the best word a banker can give you is "NO!"  I bet there are a whole bunch of them in this situation wishing they have been that sensible. 

 

Meanwhile, I am wondering if this has had any impact on land rents, and thus land values, in the region where this guy ran amok.  Makes you think that other lenders will be under greater scrutiny for security on loans going forward, too. 

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Veteran Contributor

Re: Illinois Family Farms -- anybody affected?

They were spread out over a number of counties and travelled at least 120 miles from the home base so they definitely raised the rents in a number of neighborhood.  Landlords would hear of the rents they offered and then raise their own rent.  I don't think a lot of tears were shed when Illinois Family Farms ran into financial trouble.  They were paying unsustainable rents so eventually the house of cards had to fall.  Plus trying to manage farms in that large of an area has to be difficult.  They would not have had enough of an impact in any one area on land values.  As commodity prices have increased land rents have gone up so these guys might've been ahead of the times.  A friend of mine lost a farm to the titans but felt that the sky had to eventually fall.  He just didn't want it to fall on him. 

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Veteran Advisor

Re: Illinois Family Farms -- anybody affected?

Just wanted to correct my previous post. I don't believe all who get the Top Producer of the year award are as greedy as this individual had to have been. There are some very good people who have received that award. The one thing I see is that when we award the nations largest producers, that only entices this sort of behavior. Or as I like to call it... farming for prestige.

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