Farmers Are Aging. Their Kids Don't Want to Be in the Family Business(wsj.com)
wsj.com
Farmers Are Aging. Their Kids Don't Want to Be in the Family Business
https://www.wsj.com/business/family-farms-inheritance-44c9aa17
21 comments
Sell for cheap to big corporate farming conglomerates. At least until the market is so saturated that even the conglomerates have no use for more.
Meanwhile, a few here and there will be snatched up by people from coastal cities who have made enough to FIRE and have romanticized farming. They won’t grow significant crops but will raise a few chickens and goats and a garden full of cabbages and peppers.
If you had the right background and resources, you could probably make a killing buying up 80 acres for a pittance, carving it up into 5- or 10-acre plots with modern amenities (upgraded plumbing; solar; excellent internet) and pre-built facilities for small numbers of farm animals, and selling them off to that market with the value-add of instant community.
Meanwhile, a few here and there will be snatched up by people from coastal cities who have made enough to FIRE and have romanticized farming. They won’t grow significant crops but will raise a few chickens and goats and a garden full of cabbages and peppers.
If you had the right background and resources, you could probably make a killing buying up 80 acres for a pittance, carving it up into 5- or 10-acre plots with modern amenities (upgraded plumbing; solar; excellent internet) and pre-built facilities for small numbers of farm animals, and selling them off to that market with the value-add of instant community.
Carving up farmland into home plots is easier said than done. Most fields have zero infrastructure, so you need to drill wells, run power lines, streets and/or ROW for driveways. Internet access is pretty easy as you get get a fiber line run. You'll need to work with the local town and county for permits and be sure that they can handle the additional services such as road maintenance, plowing, trash pickup, etc.
It could be done, but it is not just re-drawing some parcel lines and calling a realtor. Even once you get it done, you now need to build somewhat expensive homes to recover your costs, and the FIRE folks will then probably buy that century farmhouse down the street and re-parcel the connected field to keep a few acres for themselves and sell the rest to the neighbor, as they can almost get a house in the country for free if they do so.
It could be done, but it is not just re-drawing some parcel lines and calling a realtor. Even once you get it done, you now need to build somewhat expensive homes to recover your costs, and the FIRE folks will then probably buy that century farmhouse down the street and re-parcel the connected field to keep a few acres for themselves and sell the rest to the neighbor, as they can almost get a house in the country for free if they do so.
Also you often cant build without owning a minimum of land, like 40 acres. A rule to stop the urbanization of farms. That could change, but for now you'd have to get the zoning board to make an exemption.
so SimCity, but smaller.
Don't forget to add raillines, and watch out for Kaiju
Don't forget to add raillines, and watch out for Kaiju
Where I live, it's not the conglomerates buying up farmland but developers. This put a huge strain on infrastructure and also exploded the price of land, so much so the county finally outright banned it.
Not sure the dynamics of Iowa of course, so it could be different...but I do not live in a particular big or interesting area, either.
Not sure the dynamics of Iowa of course, so it could be different...but I do not live in a particular big or interesting area, either.
80 acres sounds big to people who don't live in the country, but is fairly small potatoes when it come to agricultural land. Such parcels will get consolidated into nearby large operations/corporations. Sometimes that is a corporate farmer, sometimes a local family or two just hoovers up land as it becomes available. But there is no guessing needed - land ownership will consolidate.
Ya for real, 80 acres? My uncle farms 10,000+ acres...
Yeah, even 30 years ago I had farmers around me closing down because their about 400 acres wasn't enough to make any useful amount of money on. Under 100 isnt enough for any sort of row crops to even pay for tractor and impliment maintence.
You would need super specialize production of lower volume products. Flowers, maybe rarer berries, otherwise you just have a large garden that lets you sell some corn and pumpkins on a road stand to offset some fertilizer costs.
You would need super specialize production of lower volume products. Flowers, maybe rarer berries, otherwise you just have a large garden that lets you sell some corn and pumpkins on a road stand to offset some fertilizer costs.
Twenty grandchildren are splitting whatever the grandparents had left. But that didn't occur to lots of people, who are unfamiliar with such events as land-inheritance.
80/10,000 acres of what? Is your uncle in corn/soybeans?
80 acres is a Vermont kind of operation. Eating crops. They're around.
80 acres is a Vermont kind of operation. Eating crops. They're around.
Around me, cranberries are another crop where large farms will own thousands of acres. And there are some large dairies that grow the food for their herds as well as give them grazing space. There are no lack of commodity farmers in my state, but you are right that I appreciate those who grow food more.
On the other hand, 80 acres of PV could gross more than $2M/year.
Everyone in my mom's family agreed the farms should be inherited by one cousin so that he could make a go of keeping family farming going. Mom and hardly any of the cousins even lived in state anymore. They didn't get an inheritance but their parents wanted to keep the family farms in the family and this was what they came up with.
“There are now more farmers age 75 and older than those under 35” (per USDA) is a wild stat.
The article doesn’t say enough about why this matters. I have no opinion either way, I just presume from the headline that the author thinks it does, so it would have been more interesting if the author devoted more than a few sentences to that aspect.
I'm not sure modern farming is a good business for individuals economically. Earnings are very volatile - too good a year and the market is flooded and prices fall, too bad and you don't have enough product. Shareholder owned corporations can deal with the ups and downs more easily.
There's more to it, but on the heels of the egg crisis and poultry instability following years of consolidation of small and independent producers into large, corporate farms following the 2008 and 2014 Farm Bills, the perspectives of national leadership seem to be simplified to financials over a clear understanding of what contributes to the health and security of domestic food production.
I'd say I was worried, but there's not much to do about it. I've just watched ag and dairy dry up over the last quarter century as farmers in my state chase anything that will give their families security, even if it means being paid not to produce, not letting their children learn the business, or selling off land.
I'd say I was worried, but there's not much to do about it. I've just watched ag and dairy dry up over the last quarter century as farmers in my state chase anything that will give their families security, even if it means being paid not to produce, not letting their children learn the business, or selling off land.
Realistically food prices need to go up to make this an attractive business for people to get into
Food prices have been subsidized for decades by farmers' pride in their work and holdings, hesitancy to make a change, and attempts to maintain a family legacy. Had those farmers sold their lands off forty years ago and invested the proceeds in the S&P 500, they would be far wealthier than they are today.
A huge intergenerational transfer is imminent. What the grandkids will do with eighty acres in Iowa is anybody's guess.