Part 5: Flush times draw newcomers to farming

  • Article by: MIKE HUGLETT , Star Tribune
  • Updated: July 20, 2012 - 8:26 AM

High crop prices are attracting a new generation, but risks remain.

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eman2001Jul. 14, 1210:28 PM

Might have been more complete if the writer had interviewed the other new farmer in Minnesota.

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getcrazyJul. 14, 1210:49 PM

Farming is a business. It's not unlike any other business. There is risk and there is supply and demand. The carpenter counts on a wave of business of new home buyers and the farmer counts on a wave of good growing weather. There isn't anything else to it. If either fails the tragedy is the same.

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davehougJul. 14, 1210:50 PM

What does it cost to run X hundred acres of Wheat / Corn etc. What is the yearly profit. How many years has yield & price led to a profit that will cover payments on land & equipment. If crops are only profitable to farmers with long-held land & equipment and not for new farmers, doesn't that say a lot about where commodity prices should be???

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davehougJul. 14, 1210:51 PM

How many "high-rollers" in Las Vegas would go into debt just to 'bet' a year's income on the weather???? :)

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rsw71756Jul. 15, 12 6:08 AM

Yes, with $7 corn and 2,300 acres of top-quality Iowa farmland, I will make a $650/acre net profit or close to $1.5 Million for the 2012 crop year. However, I have $25 Million of my own money tied up in farmland I bought in 1986, that thank God is paid-off now.

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peppermint19Jul. 15, 12 6:26 AM

So what happens when the bad years hit again which they will. I lived on a farm for 25 years and we had our good years and our bad years. This story makes it sound like its all roses when it comes to farming, but if you have ever lived and worked on one you know its not. It takes a lot of time and hard work, not a 9-5 job like most people are use to but a 5-9 job. I think all these people see are the money that can be made.

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splinedJul. 15, 12 7:22 AM

Government schemes that target extreme amounts of wealth and income (multimillion dollar investment/profit guarantees) to the wealthiest are not in rural America's best interest. US agriculture is a highly competitive business and massive crop insurance subsidies per individual farmer as well as massive income and profit guarantees are in fact capitalized into land values. Current proposals would allegedly guarantee 90% of farm operating expenses. Before any crop insurance enhancements present corn federal crop insurance poplicies are recognized as no loose profit guaranteeing policies. Cash rent is a farm operating expense. Iowa cropland rents from $400 to $500 per crop acre and this component of farm expense is in many operations the largest farm operating expense. Other operations have no land costs other than real estate taxes. For these operations with no significant land costs, past and proposed government farm bill insurance policies are obvious profit guaranteeing policies for many farmers. Should a government teetering on insolvency be guaranteeing any business a profit? Should government be guaranteeing the largest businesses the largest profits? Should government be providing the wealthiest with the largest benefits? (crop insurance subsidies as well as largest investment guaranteeing policies) Where are the big government types so fixated on keeping new blood from entering the farming businesss by tareting the wealthiest with benefits of the greatest values?

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rsw71756Jul. 15, 12 7:25 AM

Yes, pepper. I have been farming since 1986, and the main #1 thing is to save your profit from the good years to pay-off your farmland so you have very low land costs. I paid over $2 Million dollars in 1986 for 2,300 acres of top-quality Iowa farmland. Took me 10 years to pay off the farmland bank loan. Now, Iowa farmland is worth over $10,000/acre, so it has been a good investment for me and supports my family of 5 very well. But owning your farmland free and clear with zero debt really helps your profit level.

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rsw71756Jul. 15, 12 8:48 AM

Splined- I will tell you again, my taxpayer paid crop insurance is only $39/acre or $90,000. I pay $90,000 of my own money and the taxpayer pays $90,000. My entire crop insurance is $180,000 per year. I will produce $3.5 Million in corn this crop year, so the $90,000 the taxpayer pays for my crop insurance is 2% of my $3.5 Million in corn sales. 2% is just peanuts, don't you think?

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crock2Jul. 15, 12 9:09 AM

rsw71756: The taxpayer pays 2% of your expenses (for insurance), but how much of the profits does the tax payer get for that investment? Absolutely nothing! Sounds like privatized profits, socialized risks to me....

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