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Honored Advisor
Posts: 18,055
Registered: ‎05-13-2010
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Re: So where`s this farming thing headed?

Hey Blacksandfarmer, there`s no doubt there`s a huge supply of willing farmers, but are they going to get the capital?  I think that`ll be the big thing and now that we`ve seen how risky farming can be, if someone gets a $1 million windfall how many after a year or 2 more of this would want to "farm until it`s all gone"? 

 

A couple years ago Bill Graff did a podcast on "will today`s grain prices afford new machinery?".   If losing money becomes the norm in farming, you just won`t be able to run a new combine over enough acres to pay for it and if you buy a used machine the repairs will eat you alive.  Right now new machinery is bought by independently wealthy farmers as a tax break...basically if it wasn`t for taxes, new machinery wouldn`t be bought, the actual need for new is secondary.  

 

In the late 80`s early 90`s it was determined that farming is a business, not a way of life, however what kind of business model is farming?  Would the sharks on the Shark Tank tv show give us $1 million for a 30% share of our business?   I don`t think they would be interested in a business with such low annual returns.