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a week ago
I was just at a so called outlook meeting the other night listened to this fellar all he could talk about was cash in the bank listened for a little while and then finally couldn't take it and interrupted and asked how his cash had been treating him in the bank for the last ten years. He says not very good. I said well your probably a broke farmer trying to drum up business for his new adventure which was consulting. Anyways long story short cheap interest why would you ever not borrow money for cheap interest it usually leads to inflation. I feel for the young guys right now but keep plugging away and one day you will wake up and say I guess I made some pretty good equity over the years but you have to sacrifice a little too. Land is not cheap foreign investors tax laws land across the borders is not cheap and there are a lot of people that have some serious jing nowadays.
a week ago
Hobby------it is still indicative of the health of production agriculture..... --- whether a loan or lowered asset value is used..... Red ink is red ink
Devaluation of net worth is still a negative. The investment should return a value for labor and investment.
a week ago - last edited a week ago
I am on the fence on if "production" ag is on the ropes or not.
The majority of the bushels are raised by the small % of large producers most all of which have a different mindset than I have.
There is another component to the picture though. The one farmer doing most of the things himself or with part time help.
Any number of them are still doing fine . Paying taxes and increasing net worth. Not gonna make the cover of Successful Farming,
But in reality they are the supporting cast. Also probably happier and more financially secure.
The ones that are the death of ag as we know it are the Stamp' s, McMartins, Borgsons (sp), absolutely a blight in what ever area they land in,
Edit, gotta love auto correction.
Crophugger, been on both sides of your post. There is a time for both.
How long you plan on living? Very important to me and best friend farmer had your same spiel in the 70's, he was mid 50's then.
He paid out his farms life blood in interest till he was 94 years young. He is in assisted living now. Was only able to save the original home farm he gave $600 an acre for.
You think interest is cheap? So you just borrow more? What are you doing with the "profits"? Leveraging them with more debt? Do you have an end game plan?
Just what I want to do, work for a below cost of production 'cause interest is cheap. NOT.
Yep this interest environment isn't something I planned on BUT the hundreds of dollars a month it brings in being in the bank is easy peasy.
This cheap interest environment is causing more problems than can be ironed out painlessly.
Number one is it has created land prices that is just crazy stupid.
What I fear hobby is that when the day comes that the surviving farmers can't meet demand (or we start making USDA look bad when the numbers just aren't there),,,, we are set up for the corporate or bureaucratic takeover of production. Farming by cooperative committee will have a good feel to it for many voters. If for no other issue that a safer food supply that is "obviously being threatened by greed." The new nostalgia
You make a good point SW, we are increasingly living in a time we`re ruled by a mob. When cat haired youngsters can get students to walk out of classes nationwide...those young people are going to be in charge one day and maybe they won`t grow up, as most of the 60`s hippies thankfully did.
Land prices and ownership have a lot of black swans, God forbid half the world`s population is wiped out in a pandemic. Maybe we have another "farm crisis" and our cat haired overlords decide that a prolitburo could do a better job managing farms? Maybe income tax can`t be raised anymore and the revenue stream of last resort (property taxes) get raised crazy high?
We aren`t any longer governed by those that survived the great depression and have a limp from natzi shrapnel ....we will be ruled by cat haired people that have a big hammer and everything is a "nail" in their eyes. God help us.