I own the farm and farm it in Illinois. I owe the land through an LLC, because farming is dangerous and I don't want to go bankrupt if somebody sues me. Farms are expensive and hard to subdivide, so people will put them into a legal entity and pass down to the next generation via a trust. All of my neighbors are doing the same, so we're all counted as "not farmers" here
Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. The margins get better as you get bigger but still not great.
Many of the buyers keep growing their farms because it's a status symbol. Everybody in your area will instantly know you're a big wig if you're one of the X family who has 2,000 acres all without the ick that comes with running other businesses. You can't buy that kind of status in my community with anything other than land.
> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit
Well, it is ultimately a real estate business. The "hundred grand" in profit is really there only to support the mortgage payments — meaning that's what other farmers are counting on, so they're going to drive the prices down to that point. It is like a tech startup. You are counting on the assets increasing in value when you exit. That is where the profit will eventually come from, hopefully. It is not a business for everyone, but I like it.
> Many of the buyers keep growing their farms because it's a status symbol.
And because the fun parts of the job end too quickly when you don't have enough acres. I'd at least like to double my acreage. That is where I think I'd no longer be in a position of "That's it? I want to keep going!" and instead "That was fun, but I think I've had enough."
That said, the machines keeps getting bigger, whether the farmer likes it or not, so perhaps in that future I'll need even more land to satisfy the pangs.
If you don't need a couple of million dollars worth of tractors, combines, and other equipment that are all driven by GPS then you don't have enough acres.
right, so a couple million. you must be one of those poors that think a couple means exactly two. when you're rich AF, you toss a couple million around to mean plebe monies. too bad farmers aren't rich AF. when you have to use the farm as collateral for the tractors, you gotta ask if we're doing something wrong
I enjoy most of it, but, being a tech nerd at heart, I'm in my glory when I'm out in the field playing with the tech. More acres means more time to play. Something I don't feel I get enough of. I get the "I want to keep going" feeling when I disappointingly have to put everything back in the shed. Like I mentioned before, I figure doubling my acres would be the threshold where it goes from "I want to keep going" to "I'm good".
What is the thesis for speculating on farm land? Theres no reason for me to think it will appreciate any faster than inflation because demand is stagnant.
Get a mortgage on the land. Farm pays the interest. The price of the land goes up with inflation, the size of the loan doesn't. Difference is low tax profit.
I was just looking at a GIS map yesterday for my area and noticed that nearly every field was owned by an LLC and/or trust. Didn't think much of it at the time until I read this.
> It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court.
What I keep hearing from experienced estate attorneys is that California probate court is onerous and worth a lot of effort to avoid, but other state's have reasonable probate; it might still be worth it to avoid probate, but it's not such a big deal. OTOH, dealing with assets in a revocable trust can be a PITA while you're still alive and may not give much benefit while you're living either. If you're not in California, it's worth taking stock of the situation before you use California biased advice.
Having an estate in trust may not actually save on taxes either. Yes, you'll avoid probate fees in California, which is significant. But your estate will still pay estate tax. Otherwise, if an irrevocable trust holds the assets, it pays the taxes, and trusts have very abbreviated brackets; your heirs might well pay less income tax holding the property themselves.
When your heirs/beneficiaries die and their heirs become the new beneficiary, that's not subject to estate tax, which is great, but as a result it doesn't get a step up in basis. If the trust is large relative to the estate tax exemption, it's beneficial to not pay estate tax; if not, it's more beneficial to get a step up in basis.
Certainly, in some situations, trusts are more tax efficient, but you have to actually look at your situation to see. Default everyone should have a trust assumptions add a lot of senseless confusion and delay to the people who don't actually get a benefit from it. There are asset protection benefits from trusts as well, and it's reasonable to consider those depending on the situation as well.
Holding a farm in a trust or llc makes a lot of sense to me, because it makes it easier to split ownership without dividing the farm.
I'm in CT and was told one of the big advantages of a trust is speed. It can take 10-12 months to clear probate while the trust goes the the beneficiary(ies) more or less immediately.
My interest in having a property/home in a trust is privacy. Where I live, tax records are easily searchable online, so you can easily find out where someone lives assuming they don't have a very common name, or are renting. And if someone is curious about a specific property, most people are going to stop at 123 Elm St Trust.
IANAL but to be clear, I'm pretty sure that CA does not have an estate tax. And the federal estate tax limit was just reaffirmed (BBB) at the prior threshold.
> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills.
Non-judgmental curious question: why do you keep doing it? (As opposed to selling the land and buying tbills.)
I own both a farm business and non-farm business. I feel the "ick" he talks about.
I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people...
In farming, it is all laid out for you. Prices are already set in Chicago. The buyer is always there. You grow the product, deliver it, and that's that. These days, with the way technology has gone, you might not even interact with another person in the process.
> I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people...
What about all the non-organic farming, use of pesticides/antibiotics/etc., poor treatment of animals (sometimes), water waste in some cases (like almonds in CA), being beholden to & inevitably supporting the wonderful companies that are John Deere and Monsanto, having to use proprietary seeds and IP for such a basic human need, etc.? Some of our largest problems on the planet trace back to modern industrial farming.
To be clear, I love and respect farmers a ton, my comment isn't about them at all. They're amazing and hardworking and anybody in the the business would be dealing with the same problems. I'm just talking about the purity of the business itself that you're talking about. The idea that the job is somehow so morally pure compared to all the other jobs baffles me. Your average local job (waiter, cashier, postal delivery worker, janitor, etc.) would seem to have a much more direct positive and impact on people's happiness and much less of an opportunity to take advantage of other beings, as you put it.
That is all much the same as the prices being set in Chicago: Someone else has made the decision. While someone else no doubt feels the "ick", I am but the customer who is being taken advantage of. (Well, except in the case of Monsanto — they closed up shop years ago)
> Your average local job (waiter...
It seems you, deep down, even understand that. Comparing farming to being a waiter as opposed to the restaurant owner, I feel, is a pretty good portrayal of the difference and it is telling that you chose that point of comparison. Technically farming is like owning the restaurant, but in practice, because everything is laid out for you and decisions are made elsewhere, it feels more like being the waiter. You are layers removed from the "ick".
Many if not most businesses involve lots of ethical decisions where you have to choose between taking advantage of people or making less money.
Depending on one's values though I'd see something similar in some modern conventional farming where the land is being degraded, but there's still the righteousness that you are feeding people so it's justified.
There are ways to farm and some other kinds of businesses too that are win win for everyone involved. They're generally not the most short term profitable. Or even in-one-lifetime profitable.
I should clarify that I mean directly financially profitable. Obviously growing good food even if you lose money at it means people including your family and friends get to eat good food which has other benefits than cash.
There’s something righteous in farming where it’s really hard to feel like you’re doing wrong even if you’re getting rich — you are just feeding people. It’s like being a doctor.
I think "insular rural folk" are often literate enough to see highfalutin dick-bags like yourself coming and don't want to be associated with that level of disdainful pretense.
I work in project management for a massive multi-national, about as "businessy business" as you can get, and my moon-shining, hog-raising cousins give me shit for being a sellout (we grew up showing and milking cows together) but we all still can sense a vibe about "certain types from the big city" that's more about respect and shared culture that any sort of financial, social, political, or other illiteracy/incompetence.
There’s an exceedingly strong cultural drive to keep farmland “in the family” even if it impoverishes or otherwise inconveniences the descendants.
I had a coworker once who lives in this region and owns some amount of farmland in a similar situation. He could have sold it and moved his family to <insert modest paradise here, in his case Florida> at any point; even now I think it would be easily done, if not as easy as in the past. But of course he still lives there, immiserating himself to keep the farm barely viable and working a second job to provide a livable salary.
Why? Because selling it would offend his dead father’s pride.
Yeah, that rings true. I assumed when asking my question that this was something to do with culture, identity, and social status within a particular community. In this case the culture (rural America) is alien to me. But I can understand the idea of making economically "irrational" choices for reasons to do with pride or culture or identity, though in the world I grew up in it's more things like become a classical musician, environmental scientist, or spend 6 years doing a humanities PhD. On the other hand, none of those things involve the allocation of $5M of capital, so there does seem to be something different about this kind of life choice.
There's opportunities for the right person out there, I've seen it a few times - young man (or woman) who wants to run a farm or rural business or whatnot, either marries into the family or becomes "basically adopted" and inherits the business or farm.
You have tons of businesses that are viable (produce enough money to support a family) as long as you never load it with debt; because they do NOT produce enough to support a family and the debt load that would come from buying it.
> You have tons of businesses that are viable (produce enough money to support a family) as long as you never load it with debt; because they do NOT produce enough to support a family and the debt load that would come from buying it.
I've been thinking about this situation as "the bakery trap". The labor dimension here is that the best possible career move for the person you've spent the past n years training is to immediately leave once they've mastered your hot-cross bun recipe.
"The E-Myth" books talk about this (which is the worst name ever because the E is Entrepreneur not E as in email or emachines lol) - many small businesses are NOT small businesses, they're a job you own, and you can't sell a job.
First accountant I met with a year or so after a friend and I started our business 25+ years ago said: you guys don't have a business, you have a paid hobby.
Jokes on them because it's even less of a business now.
I know someone in a similar position. Had a spirit more meant for tech, pursued it, but has to keep thinking about what to do about the family farm business. I think it's the same for any kind of family business, there's a sense of failure if you're the generation to close it down.
I used to date a woman in Germany who was trying to shake her farm roots for corporate aspirations. I didn't understand German that well but apparently other Germans could tell her accent. No different than someone from Appalachia being assumed to be uneducated, and how we debate the validity of poor English versus "dialect". It seemed like an unnecessary distraction to her life.
Eventually I met the father, and he was big into the farm life. running a small but industrial farm. I still didn't understand, he mentioned a love of feeding people, why is he doing this and why is he putting his family through this, my girlfriend was translating the things he said but I didn't get it, so I assumed language barrier. They did seem to be respected in the town though by all the shopkeepers. But given the options, they were quite liquid and wealthy, it seemed contrived.
Then I met the grandfather, now, I liked that guy. The grandfather had a diversified portfolio, golf ranges, restaurants, farms, different siblings and children running them all. There was no "I just love feeding people" bullshit, just revenue streams and property. The farmer son just got the short straw and had to adopt that persona.
>The farmer son just got the short straw and had to adopt that persona.
Deluding yourself into believing in what you do is easier than getting up every morning knowing it's bullshit.
Certain areas of government, debt collection companies, insurance industry, there are literally high rises full of people who live that existence every single day.
Maybe a nit, but In Illinois it's unlikely that what's being farmed goes into people's mouths generally. Corn (not your sweet corn, but field corn) and soy mostly go into other industries e.g. biofuels, animal feed, chemical industrial inputs etc.
Land can be financed over long periods and held forever. So a few hundred grand will pay off $5 million in about 20 years and then that's steady income forever after (as long as you keep farming).
Yeah, this is the pertinent detail. The whole point is putting down only a fraction of the amount.
When you calculate the rate of return on a financed property, the rate of return is versus the capital you put down, not the value of what you financed. Plus accruing equity in the property is part of the return.
If you put down $1.25 million and you get a $5 million property paid off after 20 years, that's double the rate of return on your bonds.
You say you only calculate rate of return on the "capital you put down"...Im not following here, do you think because youre spending profit from the farming operation that loan for the farm is paying for itself? The tbills pay for themself.... you have to work the farm for 20 years to pay back that 5 million. Its an apples and oranges comparison there.
You're right, it's not an apples to apples comparison, just like running any business will yield more than straight investments.
But opportunity cost is a thing. No land equals no farm and no opportunity for that return.
If not farming, what kind of job can the would-be farmer get and how would they accrue enough capital for their return on T-bills + income to equal their farming income paying off the land? Also my calculations didn't consider that the land value would rise, which it almost assuredly would.
Land can’t be financed, businesses can be financed. Businesses that own land are much more easily financed, with the lowest interest rates.
When you buy land to develop, you have to pony up cash for it. I have never heard of a lender lending without a cash flow producing asset as collateral.
This is factually inaccurate. The land is the collateral. If you don’t service the debt, they take back the land. 75-85% loan to value, 2-4% interest over treasury rates. Underwriting guidelines for the loan will differ if this is for speculation, development into housing, or agriculture.
Land not occupied by some money making asset also being financed or used as collateral in the deal cannot be financed at rates that are not the lending equivalent of a "we really don't want this job so we're bidding high".
This is simply not true based on the interest rates and underwriting guidelines, and I own raw ag land that has been financed with nothing else besides a down payment and the land as collateral. Words mean things my dude. These are not hard money rates, these are credit products specifically for land with no business, cash flow, or other income stream at time of transfer. Being ignorant or unsophisticated is a choice.
"Ag" is the keyword there and I suspect it roughtly translates to "somehow tax subsidized by the rest of us". Go try and get a loan on residential/industrial or otherwise non-ag land and get back to me. Everyone looks (i.e. does their due diligence) and nobody ever goes for it because the rates or terms are always laughable.
Since you're an expert link poster why don't you cherry pick us all up some of those underwriting guidelines you cite?
I look forward to learning about ag specific loan products.
I can have a wholesale originator (UWM) extend me credit for those use cases in ~15 minutes up to almost $1M at 7% (conforming, ready for sale into the ABS market), which is very reasonable imho. I can get up to $5M within a few days if it’s commercial through one of the commercial banks I work with (Wintrust). 80% LTV, most of the time.
Guidelines are openly available at Fannie Mae, Freddie Mac, and USDA websites (unless there are specific overlays a bank is using, which is typically proprietary).
What does "conforming" mean here? Because I suspect there will be a reference in there that is a pointer to something involving government subsidy. Everything ag related is rife with that.
I love government subsidies through implicit and explicit loan guarantees. It’s the reason a 30 year mortgage exists. It’s the reason one can default on an FHA mortgage with almost no consequences (while being almost impossible to default on student loan debt).
To your point this is “subsidized by the rest of us,” the bottom 50% of American earners only pay 2.3% of total federal income tax collected, with the top 50% paying the rest. The poor folks are not on the hook for subsidies when they come out of general federal gov revenue (FHA loans charge an upfront and monthly mortgage insurance premium, and there are similar costs for USDA and VA loans but lesser so; we can consider those costs “cost recovery” for the purpose of evaluating self funded vs subsidies via transfer from the general fund).
>I love government subsidies through implicit and explicit loan guarantees
Like student loans?
>It’s the reason a 30 year mortgage exists.
Which is a large part of the reason houses cost what they do.
>the bottom 50% of American earners only pay 2.3% of total federal income tax collected,
"Well the poors aren't paying for it, you are" isn't the endorsement you think it is. And the poors still get kicked in the dick by spending driven inflation same as the rest of us anyway.
This is news to me. Are you saying you can borrow money with the stated intention to speculate on future sale price, from the government no less?
I have no experience with farmland, but for other purposes such as building hotels/retail/etc, you can't just get a loan for the land, you buy the land with cash and then get a construction loan to start development. I assumed you would have to at least need to have a plan to operate a farm to get a loan.
You've got it backwards. Hard assets like land, buildings (aka. your house), machinery (a tractor or your car) are all much easier to finance than businesses. A simple Google search gives a wealth of resources for someone looking to finance (aka. mortgage) land and/or property for a farm.
Edit - we're on HN. If you'd ever tried to get a business loan you'd know it's near impossible for a new business without 100% collateral, which is why the entire venture capital business, and HN, even exists...
My point is those hard assets have to be used for a business, not for price speculation (as far as I know). Your second link says:
>Farm Ownership Loans offer up to 100 percent financing and are a valuable resource to help farmers and ranchers purchase or enlarge family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations.
What is "assist with land tenure to save farmland for future generations"? Is that speculating for future price increase?
> My point is those hard assets have to be used for a business, not for price speculation (as far as I know). Your second link says:
Banks will let you finance any land if you have a way to pay for it. They'll let you mortgage some plot of land in the middle of nowhere if you have the income to pay for it.
A farm is income. A future farm is a business plan. But if you want to speculate on land from the city and work an office job, yeah, they'll give you a loan for that too.
> What is "assist with land tenure to save farmland for future generations"? Is that speculating for future price increase?
It's buried in a figure legend, but the Tribune does acknowledge this too:
> Note: The 12 selected counties had some of the highest cash rents in the state. For the purposes of this analysis, a business entity was defined as an organization with an LLC, Inc, LTD, Co, Corp, LP or LLP tag. This land is not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses.
It's not buried anywhere, it's literally the next paragraph after the lede.
> These acres are not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses because they offer tax benefits and externalize losses.
This is a use case where I think a current LLM shines. Ask it to summarize the important points of n papers, and slow read only the ones that pique your interest. It won't be perfect, but it will save you a ton of time while letting you focus on the things that need more attention.
I'm not anti-LLM even if the following statement sounds like it.
I don't trust LLMs, even to summarize for me. I have to fact-check every single statement. For instance, if I ask ChatGPT, "Is PLA more dense than ABS?" it answers, "No, PLA is not more dense than ABS." Those are direct quotes. In the third paragraph, ChatGPT says, "So technically, PLA is denser than ABS, not less — I misspoke earlier."
I find LLMs good for using words that I didn't think of. I can then reword a search to get better search results.
To be fair, the cherry-picked example I used above sounds a lot like a human. Humans make such mistakes and corrections. If a human had given me that response, I would shrug and ask more questions. But it would make that human not be my go to source.
It makes me shudder to think about code that is written in such a manner.
A human that makes a mistake, catches it, corrects it and apologizes is someone I'd much rather interact with than someone that makes a mistake, catches it, and doubles down on the mistake that I then later discover the issue would be the person I would not be my go to source.
Mistakes happen. If they are honest mistakes, then we can deal with it. If they are deliberate mistakes, well, we can deal with that too but in a different manner. The problem that I have is answering something in a confident manner when it's really a hedge to not sound unsure. People apparently have issues with an unsure bot. I'd much rather have a response like, "I'm not positive, but I think PLA is less dense than ABS" for the wiggle room of being able to come back later with "So technically, PLA is more dense than ABS". Even if the bot doesn't figure it out, by phrasing that way, you're clued in on what to fact check
I am researching LLMs as a summarizing tool for medical research and early results show that LLMs do a better job than the current status quo of volunteer doctors. Pre print hopefully coming soon, until then youll just have to trust me that they are really good at summarizing and critiquing research.
> It makes me shudder to think about code that is written in such a manner.
Often it has the property which was good enough for generations of C and C++ programmers, it compiles. Does it work? Eh. Do the tests, if there even are tests, check anything useful? Eh.
The focus on "it doesn't matter so long as it compiles" justifies everything up to IFNDR†, the explicit choice in C++ that if what you've written is nonsense but it would not be easy to modify the compiler to notice, just don't worry about it and say it's somebody else's problem.
† "Ill-formed, No Diagnostic Required" these words or near equivalent occur frequently in the ISO definition of the language.
I don’t know how to say this without seeming rude, but a few hundred acres is very small. 500 acres is less than a square mile. Is there something about your community that makes farms of that size more common than normal?
Edit: my (extended) family has a farm, and they cultivate X0,000 acres every year, though they own far less. They do plant a larger area than most for their community, but they’re not planting 20x their neighbors.
It's small in that you can't support a family farming 500 acres of corn/beans. It's big in that buying 500 acres would cost $5M - $10M, that's real money!
If you don't mind me asking, how do you make it work for yourself? Are you single, so you don't need more? Or perhaps you're closer to a 'hobbyist' farmer? (although 500 acres is also well beyond a hobby haha)
On a recent Odd Lots episode, they interviewed a Canadian lentil farmer. His claim was that a family of 3 (Father, Mother, Daughter) could farm 1200 acres of lentils with time left over due to modern automation.
So I guess it would depend on the automation level of the kind of crops you’re planting.
Ouch. Better in some ways and worse than others than the restaurant business, I reckon.
My mom's relatives have a long horn "farm" complying with the minimum requirements to claim various tax exemptions. :sigh: Their family business is aviation real estate, services, equipment, and aircraft.
I can walk to where sorghum and field corn is grown here in hill country because that's the major trade in these parts, apart from selling land for new housing developments.
This is probably similar in UK - although this is pure speculation.
A limited company owning the "land" which is then leased to the "farm" business that works it.
Possibly a "group" parent company is owned by the actual farmer.
I'm sure there will be good tax and legal protection reasons to structure farms in this way, not forgetting various government schemes which bring in revenue via grants and tax breaks.
This is a critical insight - the statistics likely count many actual farmer-owners as "non-farmers" due to LLC/trust structures, which significantly distorts the narrative about ownership concentration in agriculture.
I find Illinois taxes to be scarier for land than other investments.
Illinois state is in a bad financial position, they can't inflate their way out of it. Financial assets are easier to move than land if things get bad.
As a land owner you should be much more worried about state and local laws than what goes on at the fed.
There are millions of Americans who own what would otherwise be "developable and valued as such" land that became basically worthless with the state passage of various environmental laws (particularly wetlands setback stuff) that make the juice not worth the squeeze except if the location were to become "major urban area" level dense while the municipalities passed zoning laws making it all but impossible for that to ever happen.
I guess when you think about it it's not that the land is less valuable. It's that there's no value left after doing what you'd need (endless engineering and construction hoops, lawyers, court, etc) to extract the value without the government just unilaterally deciding you no longer own the land and backing that up with violence.
Land value can decrease in real terms at the same time inflation is happening, sure. But it isn’t revalued by inflation in the way that a contract denominated in the inflationary currency is.
You buy land at time t for price x. You sell land at time t+1 for price y. If (y-x)/x is is less than the same calculation for whatever other asset you would have bought (I would use sp500), then you lost money.
Yeah, I think it would have been more useful if the Tribune had been able to determine "how many people are farming on land which they do not own" whether directly or through an LLC/company.
The amount of land owned by "out of state" owners may help answer this question but they don't give a number for that either. (A local farmer could also register their LLC out of state though I'm not sure whether that's beneficial or not.)
Setting up an LLC as foreign to the state you're living in likely won't save you on fees (since you'll register it as a foreign entity in your own state, especially for holding title to real estate), but it can open up additional features not offered by your state's laws, like series LLCs. Although as far as I know it's an open question as to whether the protections of Series LLCs will be respected by other states or just discarded when you try to use them.
there is no type of farming that will beat t bills? none? people arent working on ideas to make farming more profitable? i just dont believe that american farms, which cover unimaginably vast areas and are unimaginably numerous, could be continuously funded by banks if they were losing money. thats impossible. subsidies cant explain it. i think youre lying or leaving out some context
> there is no type of farming that will beat t bills? none?
There is no type of farming that beats t-bills today if you buy the land today. There is a saying in farming: "Buying farmland never makes sense the day you buy it." The land you bought 50 years ago is looking pretty damn good now, though. The economic bet farmers not cashing out (or buying in) are making is that trend will continue.
Most farms are not owned by farmers, most housing is not owned by tenants, most airplanes are not owned by airlines, etc., etc..
Vertical integration can have benefits, but it isn't necessary and has drawbacks. Even when vertically integrated, regulations are often written under the assumption that everything is leased, not owned, so compliance is easier if you own a company that owns an asset, instead of owning that asset directly.
For example, if two people carpool in a car that one of them owns, instead of hiring a taxi, they'll usually split the costs of the fuel and the wear on the car. On the other hand, if they were flying in a small airplane owned by one of them, it's illegal to split the costs of wear on the airplane, unless its a rental or air taxi. Because of this, and other similar effects of FAA regulations, many small airplane owners own a company that owns the airplane, instead of owning it outright, and rent the airplane from themselves, whenever they use it.
>Most farms are not owned by farmers, most housing is not owned by tenants, most airplanes are not owned by airlines, etc., etc..
Sounds nice but it's not true in the US. A majority (60%) of US land in farms is owner-operated.[1] US homeownership is 65% meaning most housing units are owner-occupied.[2] And 60% of North American airplanes are owner-operated not leased.[3]
Not trying to nitpick, but I guess I am. Does "most" really mean 65%? I tend to think most needs to clear a pretty high hurdle. I bring this up not to attack you, but I've noticed this behavior in journalism or when folks are trying to win arguments where instead of quoting the actual number they'll use a term like most, which I don't think has a hard and fast threshold.
I guess, for me, most would have to be something north of 80% because it just doesn't feel right to use it below that. 65% would be majority, obviously, maybe significant majority or some such.
Anyone else feel this way?
Edit: if anyone else reads this, I totally shouldn't have even brought this up. Downvote away, but as other replies have pointed out I missed the definition of "most" when you're comparing numbers against each other.
I think most would usually mean plurality not 50% + 1. If there are 3 people and 2 of them have $5 each and the third has $6 it would be correct to say the third has the most money despite not having 50% + 1.
Regardless, the majority is also the plurality so using most when it is over 50% would also be acceptable.
Most and majority mean more than half, in the context of proportions.
>If there are 3 people and 2 of them have $5 each and the third has $6 it would be correct to say the third has the most money despite not having 50% + 1.
This is not an applicable example, as most is not being used to refer to the proportion of money. It is using a different definition of most, which is the top rank when ranking things by quantity.
Not the friendliest way to reply, but are you saying 65% does not mean most? Just wondering if we're violently agreeing. I shouldn't have said 80%. Was just trying to articulate that most is a high threshold and also not defined as an absolute number.
Cambridge does not have the best definition, imo, but even going by that the first definition would mean any plurality would qualify as "most" - setting the threshold potentially lower than 50%.
Ha, I gotta say after reading your reply I feel kind of dumb for even saying the 80%; I had blinders on. Most, when it's relative, is the highest of a set even if that number is super low. Totally spaced on that when I asked, but I was fixated on how it's used to define something that's a percentage like in the 65% example. It happens so frequently in journalism and it's frustrating because it's trying to make an argument that sometimes the numbers themselves don't support.
Anyway, appreciate you reminding me (and I deserved to feel dumb so also making me feel a bit dumb about it).
You have a misconception about what the word means. Most has a meaning: more than any other quantity. > 50% meets that definition every time, but even 2% could mean ‘most’ if everything else in the comparison is less than 2%.
You're right about the 2% and I just totally had blinders on when thinking of "most" used when comparing a set of numbers (where one of those numbers is the most in the set). I disagree with your ">50% meets..." comment, but pretty sure we're not going to agree on that one so I'll just shut up now.
No, "most" is not a high threshold. You can say "most" about 30% of something in a group, if the rest are splintered between other groups getting less than 30%.
Maybe you should read the link I provided. It would likely clear up a lot of misconceptions for you.
Have you seen how expensive a tractor or combine is? The economies of scale are real in farming.
You need ~$1M worth of equipment to farm 80 acres (~$1M worth of land), but that same equipment can basically farm 800 acres (~10M worth of land). An equipment issue can destroy a years worth of work with 800 acres (e.g. frost damage from delays), but with 8000 acres you can have spares / avoid the loss with some overtime.
Fertilizer and pesticides aren't neatly contained. If you farm different crops than your neighbors, overspray can kill your yield (e.g. weeds spray for corn kills soybeans). Laws around who can grow/spray what and being big helps make that better
> You need ~$1M worth of equipment to farm 80 acres
All new? That seems way too low. You'd struggle to get into a combine alone.
Used? That seems way too high. I doubt I'd get any more than $300k for my equipment (and that's more than I paid) if I were to sell it today, and it's pretty nice equipment compared to what I see a lot of farmers using.
> 80 acres (~$1M worth of land)
We always wonder why so cheap? The 18 acres for sale down the road from me wants just about $1M (I expect that will be a hard sell, to be fair). The 130 acres further down the road wants nearly $4M (quite realistic; comparable parcels have sold for more). If you could pick up 80 acres in these parts for $1M, you just won the lottery. And, to be clear, it's not like on the edge of a city or something where other interests are driving up the price. It's just farmland. The yields are respectable, but not quite like Illinois will produce.
Anyone with 80 acres is buying used tractors. They are likely hiring someone else with a combine to harvest their fields (harvest needs a lot more labor than the 80 acre farm has so when you hire a combine you get a team of 3-4 people which also includes grain carts and semi trucks to get your grain from the field to the elevator (which might be something you own and might be something town).
I work for John Deere, though I don't speak for the company. All tractors are built to order, which means when someone buys a new tractor the dealer has several months to sell the trade-in. When the new tractor arrives from the factory the truck unloads the new one, and loads the trade in to take to someone else. A good dealer will have a list of farmers and what equipment they all have so they can put this deal together. As a result the only tractors a dealer has are service loaners (which are sometimes rented), which makes all the accountants happy.
You'd think, but you'd be surprised. In fact, one of the families I rent land from (aging couple who was looking to work less land) is still working around 50 of their acres themselves and they got a couple of new tractors recently.
> They are likely hiring someone else with a combine to harvest their fields
They even combine the crop themselves. But, to be fair, the combine is pretty old (IH 1420).
The other possibility is they have had the land for a long time and it is paid for. Payments on 80 acres of land will pay for some really nice tractors. The rational economic actor will still be going for used tractors on 80 acres, but humans are not rational. Larger farms a new tractor makes sense for various reasons.
Don't forget tax deductions. There is a reason the week between Christmas and New Year is a big on for tractor sales - your accountant suggests you want to get the down payment out now and off your books. As an accountant to explain it (I don't fully understand this)
> The rational economic actor will still be going for used tractors on 80 acres
A rational economic actor would sell the land. 80 acres would fetch around $2M around here pretty easily. You're not getting $2M of pure economic value of 80 acres.
But what are you going to supplant the enjoyment of being out on the farm with? No amount of money can buy a suitable replacement.
1M was a nice round number for equipment. I see people without much land buy new equipment all the time, it’s wild! They tend to not stick around long though.
You must have better land than we do. Land by me goes for around 14K/ acre. The bigger plots or better land goes higher.
It's decent enough, but hardly the best ever known. 200-220bu corn and 50-60bu soybeans would be pretty typical for good ground. Whereas, as I understand it, that is merely average ground in Illinois?
But the farmers are really hungry. Case in point: When I was a kid there were eight adjacent farms, including where I grew up, that all had farmers living on them. Of their kids (my generation), there are now 12 of us trying to farm in the same area. That's a 50% increase! As you can imagine, the competition is fierce.
It's actually an FAA regulation. If you are not a licensed commercial pilot, there are extremely strict rules on how and when you can accept ANY money for flying, use of an airplane, etc.
Actually, even if you are a licensed commercial pilot, there are still strict rules around payment. You can be paid for your skill as a pilot, but you cannot, e.g. charge for giving rides in your personal airplane.
There are strict rules, but in general small plane owners who are private, non-commercial pilots may still share operating costs with someone they bring along with them. 61.113(c) permits pilots to share operating expenses of a flight with passengers provided the pilot pays at least his or her pro rata share of the operating expenses of the flight. Operating expenses are limited to fuel, oil, airport expenditures and rental fees.
> Actually, even if you are a licensed commercial pilot, there are still strict rules around payment. You can be paid for your skill as a pilot, but you cannot, e.g. charge for giving rides in your personal airplane.
While that sounds like a bad rule when I first read it, I smell Chesterton's fence here. I'd like to understand why that regulation was written before getting rid of it.
It's a safety measure. When it comes to regulating aviation, in general, the FAA is concerned with protecting the public. The "public" doesn't generally have the knowledge to evaluate a pilot, aircraft, or the operation of an aviation venture. So, the FAA puts rules around these things. The private pilot is held to a much lower standard of skill than a commercial or airline pilot. But, that means that the FAA doesn't trust them to fly around the general public.
You can take your friend for a spin in your plane if you want, or go screw around and kill yourself, but you cannot "hold out" your operation as an air taxi or airline to the general public, and you can't make money off of it in any situation.
A commercial pilot has to undergo much more training in operating an aircraft safely. This means the FAA allows them to get paid to be a pilot - they could be hired to fly someone around in that person's plane. But the commercial license does not really train them in running a safe airline, so the FAA does not allow them to use their own plane to run an airline.
EDIT: To word it differently, the opportunity to get paid increases the likelihood that someone will push limits or take unsafe risks. If you aren't under pressure to make your paycheck, you're less likely to take your passengers into marginal weather. (One of the most dangerous occupations in aviation is medivac/aviation EMS. There, the pressure isn't generally monetary but moral: you want to help a sick patient, so you take more risks.)
> If you aren't under pressure to make your paycheck, you're less likely to take your passengers into marginal weather. (One of the most dangerous occupations in aviation is medivac/aviation EMS. There, the pressure isn't generally monetary but moral: you want to help a sick patient, so you take more risks.)
Critical care (but not flight) paramedic (though I have transferred patients hundreds of times to them):
When we request Heli EMS tht providers are given patient details, but the pilot is strictly given "pickup" and "destination" (they used to be given patient weight, and may still be depending on location and size of helo, but generally not) - the goal being "evaluate safety based on weather conditions only, not a patient condition that tugs the heart strings".
I'm not totally sure what the GP meant, but I think it has to do with the owning/operating organization of the plane not being a qualified (Part 121/135) company for commercial operations.
A grandfather-in-law owned his own small business (a civil engineering firm), and had a plane that he flew to get to meetings/job sites across the Midwest. He could fly company employees just fine- and the company could reimburse him for the flight expense, and since it was not for the public that was fine. He could fly his family or friends on his own dime just fine. But if a family member or friend not working for the company tried to compensate him for the costs, then it is a question of "is his company actually an unlicensed airline?" and now we're getting into territory where it gets complicated. The FAA heavily regulates airlines, which is a major reason they are so safe. But there has to be a lower bound on what gets regulated, and avoiding that is what I think that GP is referencing.
It's worse than that. It's due to some weakening in the checks and balances system of US federal regulations, as well as a hole in the system.
Historically, laws were written by the legislative branch (congress), enforced by the executive branch (the office of the president), and overseen by the judicial branch (federal courts). When oversight works, all three have to agree for an enforcement action to take place.
In somewhat recent history, congress has been passing regulations much less, instead passing authorizations for the executive branch to write their own regulations. On top of this, the judicial branch had, until last year, allowed executive organizations to use their own judges, without juries, and follow their own interpretation of laws and regulations, when it conflicted with a literal interpretation. See https://en.wikipedia.org/wiki/SEC_v._Jarkesy and https://en.wikipedia.org/wiki/Loper_Bright_Enterprises_v._Ra... for the recent rulings overturning those precedents.
Even then, there's a hole in the system that especially impacts overly broad definitions of commercial activity, which as far as I'm aware, no other executive organization has taken anywhere close to the extreme of the FAA.
That hole is that even with the precedent of the recent supreme court rulings, they only take effect when something goes to the courts. With real commercial activity, this happens regularly and often preemptively, because the costs and resources needed to take something to court are easily recovered by the extra income or savings of a ruling that follows proper checks and balances.
On the other hand, there is no incentive to spend the money and resources needed to regain rights for non-commercial activities, like carpooling (or airplanepooling) where no one is earning anything.
> I'd like to understand why that regulation was written before getting rid of it.
It's simple. Getting a commercial pilot license is a much more involved process than getting a private pilot license.
A private pilot needs just around 30 hours of flight time to get a license. A commercial pilot needs at least 250 hours and a medical certificate that needs to be renewed periodically.
> It's simple. Getting a commercial pilot license is a much more involved process than getting a private pilot license.
I understood that. But the post I quoted said that you couldn't accept payment even if you were a licensed commercial pilot, if you owned the plane. I'd expect the 250 hours and the medical certificate to be enough to make it safe for you to accept payment, and apparently the regulators who formulated the rule don't think that's the case. I was saying that I'd like to understand why they don't think that's the case before I'd want to support any relief on that rule.
> A commercial pilot needs at least 250 hours and a medical certificate that needs to be renewed periodically.
That's true, but for anything other than the most podunk regional airline, you're going to need 1,500 PIC (pilot-in-command) hours before the airline will even consider you (although I believe I heard due to pilot shortages some airlines were willing to consider 1,000 hours).
I've seen vehicle registration documents with an owner and a lienholder. But the lienholder is also in possession of the title (which may be electronic). I see a few more than two states where the owner is in possession of the title, but I haven't lived in any of those.
I think the difference is for real estate, title documents and liens are recorded, whereas for vehicles, titles are registered, and possession of the physical title is almost enough to change the registration; it makes sense for the lender to physically hold the title until the loan is satisfied, in order to prevent a sale without paying back the loan.
> On the other hand, if they were flying in a small airplane owned by one of them, it's illegal to split the costs of wear on the airplane, unless its a rental or air taxi.
That AC and the regulations cited in it couldn't be clearer-- if you and the pilot are both going to $destination for $reasons, you and the pilot can definitely split the cost of the fuel.
Moreover, this is perfectly analogous to the carpooling example as you stated it-- two people both having a stated purpose traveling to a destination, both sharing the cost of gas/wear.
There of course could be ways to carpool where the passengers pay the total cost of the driver's gas/wear/etc. You can't do that in your airplane. But again, I think the reasons for this are glaringly obvious-- keep silicon valley from attempting to create an unregulated taxi service in the sky. (In fact, IIRC there was someone who tried over a decade ago-- perhaps these laws are a response to that?)
> Because of this, and other similar effects of FAA regulations, many small airplane owners own a company that owns the airplane, instead of owning it outright, and rent the airplane from themselves, whenever they use it.
I mean, the pilots I know who do that are either a) multiple people owning a single plane, or b) single owner literally running a rental taxi service. Who isn't covered by those two categories?
The op clearly stated wear, not fuel. Hourly rates on a plane will have a maintenance reserve, from tens to hundreds of dollars per hour. This cost can not be shared by a pilot. If the plane is owned by an LLC, and rents the plane to the pilot at a rate that includes the maintenance reserve, the cost of the rental CAN be split. So by putting the plane in an LLC, you can legally recoup the true cost from your friends.
It's pretty common for a single person to form a trust or LLC to buy an airplane, but it's mostly only worth the cost when the airplane is very expensive or when it's going to be used for commercial activity. I used the only example I could think of, off hand, that applies to non-commercial activity, because it's more relatable.
Also, I think it's worth mentioning that the advisory circulars, legal interpretations, and other letters the FAA writes aren't regulations, and it takes a ruling going to a federal court, not an FAA panel or tribunal, to set a precedent for what is and isn't legal. As far as I understand, this has never happened with FAR 61.113, which is a bit self contradictory and the FAA's overly broad definition of compensation where "the building up of flight time may be compensatory in nature if the pilot does not have to pay the costs of operating the aircraft" (https://www.faa.gov/media/15611) is extremely unlikely to ever hold up to a jury.
I guess it depends a lot on what you measure in "most": housing per head or housing in square feet? Lots of heads cramped into rented minimum viable housing. Lots of square feet held by owners who occasionally live there, when they do happen to be in town.
(the general upwards trajectory of real estate makes it an investment even when it does not generate any income, do much better than owning a boat!)
It's impossible to know with the data we collect. Census tracks the homeownership rate, which tracks if the house is owned by someone living in it. However if you are a tenant living in a house that someone else owns and lives in it as well, for example if you are an adult renting in your parents house, that counts as a homeowner owned home. We do not collect the tenant non-ownership rate, but it would be much higher than the inverse of the homeownership rate.
The headline is provocative, as some amount of corporate-owned farmland is owned by corporations that are in turn owned by farmers and their families.
I would also push back on the notion that owner-operators are in a better position. It's more accurate to say that farmers who have assets of any kind are better off than those who don't have assets. As an example, generations back in my family we owned a lot of farmland. There were some bad investments made in the farming operation and we almost lost it all. This was in the early 1980s for those who are familiar.
If my grandfather had sold all of his land and equipment in the late 1970s and invested it in the recently-started Vanguard group, rather than re-investing in the farming operation, then my family would be wealthy. Now expecting a farmer to know about index investing and to bet on it when it was just starting is unreasonable. But it's a good lesson in diversification.
When people lionize farming owner-operators, they discount the risk that owner is taking by having so many assets concentrated in one operation. Now farmers do know about investing and diversification, and some do make the rational decision to cash out. Many also don't, for various reasons.
But it's not totally fair to expect farmers to behave differently than other asset owners because farming is seen romantically or in terms of national security.
This is a different argument than one which would decry the position of tenant farmers. Obviously being a tenant farmer owning nothing but equipment is harder than being a farmer who has $5 million invested somewhere else and rents the land he farms.
Yeah. I think it's important to think about whether or not you want millions of dollars of assets tied up in land that you can farm. For example, I don't know how to farm, and I don't wish my 401(k) was land and structures... I am happy to have higher exposure to the wider economy.
Obviously there are recessions and having your own vegetable farm and place to live is nice... but most of the time there isn't a cataclysmic recession, so you're leaving money on the table. Meanwhile, it's pretty easy to have a bad year farming. Weather. Pests. Having a lot of assets doesn't help you when they're not liquid and plants won't grow for a year.
Farming is somehow still regarded as being some mom-and-pop heartland thing rather than the highly optimized manufacturing operation it has been for decades. Direct farm employment is now just 1.2% of the population. It was 40% in 1900. The special treatments farms and farmers get is an outdated relic kept alive by the electoral college.
It’s because it’s still mom and pop because 72% of farms are still fully owned by people but they tend to be smaller in size and only account for 30% of the total farm land. And majority of farms are still under a 1000 acre size. The problem is that there are about 27000 farms that are hyper giants of 5000+ acres which are the consolidated operations that account for a huge portion of the US farmland.
Also, farming is mom and pop highly optimized operation. Those two don’t need to be separate things. Once you understand that running a farm can be hundreds of thousands of dollars if not millions, you can understand the disconnect.
There is a lot of national security benefit to propping up the domestic agricultural industry. We've probably overstepped that line, but just "leave it to the free market" is a really bad option, too.
People hammer subsidies for farms, but I'd rather not have one bad year cause food shortages the following year when we lose production from shuttered farms. The free market shouldn't control everything.
Unfortunately "the farmers" is simply a marketing gimmick along the lines of "the children". It is used to evoke a specific image and implied set of ideals. And because of that we have to deal with all kinds of crap legislation tied to it.
At the population scale in the US "The farmers" as in the stereotype of the rugged, individual American by and large does not. That's part of the point of this article.
The workplace is becoming increasingly abstract. I wonder if there'll be a time when cubicles and spreadsheets become an object of nostalgia or romantization.
The special treatment of farmers is about food security. We generally trust farmers to keep delivering us food and we're willing to allow them a lot of special treatment because of that.
> an outdated relic kept alive by the electoral college.
And yet, farmers are a vocal and critical political bloc in every other EU country, too.
Farming is just important. Not as much because it employs a large portion of the population, but because it keeps a large portion of the population alive. It is the original industry that's "too big to fail" - if you let it, you get famine.
The country wouldn't even exist without the electoral college. It was pivotal in uniting the states under a federal government, and is working as intended. Maybe the USA should be abandoned, and all ties between the states renegotiated, but you shouldn't be able to unilaterally change the terms of the deal.
Useful to who? It's working exactly as intended. You shouldn't get to unilaterally change the terms of a contract. If both parties agree, then sure. But if not, you have to accept the good with the bad, it's a compromise. We've gotten a lot more out of the deal than it has ever cost.
I think the founders would be pretty surprised to see the vast majority of electoral votes being determined all-or-nothing by the popular vote of the citizens of the state. If that was how they intended it to work, you might think they would've set it up that way in the first place.
It set up the critical vulnerability that we have today, that in states where the votes are close at the state level, switching just a handful of votes completely moves the votes in the electoral college. This will be a continuing temptation, and a weakness of the us system. The 200 or 300k votes in swing states that had Biden beating Trump and then Trump beating Harris this time is not a great thing in democracy.
So this vulnerability makes it a potential attraction to steal votes. There was the notorious recorded phone call when Trump called up the Secretary of State in Georgia and said he only needed 11,700 votes, please give them to him.
They explicitly negotiated the electoral college to protect their ability to not be overwhelmed by more populous states, and forever maintain their voice in the union. It is working exactly as intended, and is essentially a contract we are all a party to.
We don't let one party unilaterally change other contracts, why should we here? It seems you'd have to be a very big hypocrite to support such a thing. You should honour the deal or find a way to renegotiate it that makes everyone happy, not just yourself.
For one thing, the social contract among the states was already changed in the 1860s. We're no longer some loose confederation of independent states. The Feds are in charge, whether you like it or not, and the states are effectively administrative divisions, whether you like it or not. We literally fought a war about this and the "states' rights" people lost.
For another, we're not bound to contracts between people who are long dead.
For another, the constitution (little c, not the actual document) is not a literal contract. That's a methaphor.
Finally: Why do you, as a person, want a system where land can vote? Or are you a parcel of land pretending to be a person?
The highly optimized manufacturing operation has made farming into a powerful tool of statecraft internationally. Other countries become dependent on our beans and corn to [indirectly] feed their people or for inputs for their own industries. That gives us diplomatic leverage.
Once you start thinking about that, a lot of the mystery or 'inefficiency' of farming in the USA makes more sense. For example, the subsidies to grow corn and soy but not kale and squash or whatever was in the article- growing kale and squash isn't a strategic priority.
It’s worth noting that this industrial scale is only possible with pesticides and herbicides that are very bad for insects and suspected hormone disruptors and carcinogens, etc.
If structured the right way, agricultural land has numerous tax benefits that can range based on jurisdiction from carve-outs on inheritance taxes all the way down to property tax exemptions on what could not even be considered a hobby farm (very large exurban lots)
This is such a contrast to upstate NY where farmland is still overwhelmingly owned by individuals and families. It was nearly 75% the last time I checked. And 70% is owner-operator (the owner is also the farmer). Only a very tiny percentage of active farmland is owned by an investment company.
New York state has gone to great lengths over the last 40 years to highly incentivize (read: subsidize) local, family farmers and deter megacorp speculators and investors.
At this point I think it's basically impossible to actually lose money on a farm as long as it's family/individual owner-operator.
It's also why NY state cropland is among the most expensive in the country. Once you get it, the value will only ever go up regardless of crop yield in any given year.
The US needs another Orville Freeman, someone who understands the intricacies of both economics and food production. Pretty much no-one in a position to affect subsidies and the legal system has a clue. And this isn't unique to the USA, watching Clarson's Farm is a prime example of a bunch of know-nothing politicians screwing things up. Which is how for example in TX, half of the rural community is getting AG exemptions on their property taxes, while not actually producing anything other than tax dodges.
Part of the land — 120 of the nearly 700 acres — is rented from a family who owns multiple farm properties and wants their fields weed-free with perfectly straight grids of crops, a deep-rooted tradition among Midwestern farming communities.
“They want that land to be clean corn and soybeans,” Bishop said. Before the restrictions, his father was growing organic corn and soybeans on part of the field and letting Bishop grow vegetables on the rest.
I've seen this mentioned elsewhere, but the idea that you'd force someone else to create a mono-crop desert, not even out of a sense of efficiency, but _just because it looks right_, is just so frustrating.
from that link: "Etymology: Not known with certainty. Two long-held hypotheses are as follows: One describes combat soldiers wistfully wishing to go back home, buy a farm, and live peacefully there; later, after they had been killed in combat, their fellow soldiers would say that they had bought the farm (compare the established metaphor pattern of having gone to that big [whatever sort of nice place] in the sky). Another links the phrase to the idea that governments compensate farmers whose land is damaged by a military aircraft crash; a deceased pilot was thus said to have bought the farm, and the term eventually entered wider use."
Thanks. Got a plain made: “The content is not available in your region”. I’m actually happy the website content is a simple html document instead of JavaScript bloated with capitalism surveillance trackers
If you want to be part owner of agricultural land, I couldn't recommend AcreTrader more. I've been investing with them for a few years now and the overall experience has been great. Too early to discuss profits yet as most investments are on a 5-10 year horizon.
> Eight states in the Corn Belt — Iowa, Indiana, Nebraska, Minnesota, Missouri, Kansas, South Dakota and Wisconsin — restrict the size, structure and purpose of corporations that can own farmland to limit ownership by large investment funds.
> More than 22% of the farmland in 12 Illinois counties with the highest rents is owned by a business entity, defined as an operation with an LLC, Inc, LTD, Co., Corp, LP or LLP tag. Sangamon and Edgar counties were included in this analysis because historical data was not needed.
The TL;DR is that Illinois is one of the few states where there aren't restrictions on farmland owners, and even there it's a small (if growing) problem.
I think this is one of those problems that should theoretically be self-limiting. The economics of a farming family owning their land is too strong - just from the amount of tax breaks and subsidies available. Put another way, the land in a farmer's hands is worth more than in a corporation's.
I think the real risk comes from large farm landholders who want to cash out of their farm but don't have an heir or successor lined up. Farmers are getting old and their kids more often than not don't want to run the family farm anymore and there simply aren't going to be any other buyers.
Selling the land that had been in the family for generations is what happened recently in my family. My dad (wealthy retired 80 year old engineer) unfortunately decided he wanted the money, instead of keeping it in the family. It has been in our family 150 years. None of us are farmers in the current family, but we had relatives who were still renting the land in the area. They couldn't afford to buy the land either. So no farmers in the family today doesn't make it obviously something that we can keep - still I was disappointed with the outcome.
We sold it to some outside group. Apparently the best way to sell land today is an online action. You announce it ahead of time, there is a minimal amount to start bidding, and then like an ad auction, there is a minimal increment to go up by, fixed time limit of like a week to bid.
I was really sad that it left the family. The sale price of the midwest farm land ended up about $10k an acre for cropland. The amount of money that renting brought in didn't seem like it would be enough for any young person to actually buy land at current prices. I am sure they'd have a lot of tax deductions but can they get a million dollar loan? I expect there will be houses put on the land eventually. I had an idea for how to keep it suitable for future farmland, which was to put solar power on it with a 20 year contract with a local power company (with everything removed after).
You start with a few acres - general poor land that can only grow livestock. You raise a few cows/hogs/... per year on the land but you go to work in the nearest town doing something else full time to live. In 5 years you have a reputation with the bank and some of the land paid down so you can buy another lot when it goes on sale thus expanding the farm - but you are still working full time somewhere else to get money. After 20 years of this eventually you build up enough that you can support yourself farming - much of the land is bought at yesterdays prices - but it will be many more years before you can make more than if you stayed working.
Or you marry someone who will inherit land - this is often the best way in.
Right. Most of it is owned by the llc the farmer set up for thier land, and/or the family trust set up to prevent the land from being split into ever smaller parcels by inheritance.
I inherited farm land from my grandfather. I am very much not a farmer, I do not want to live in Southern Illinois, but I don’t want to give up the land, so I rent the land to a farmer with adjacent property.
I realize that’s not really the point of this article—this is more about huge firms buying up non-trivial amounts of land.
Is this different from factories not being owned by the assembly line workers? Not saying it is right or wrong but I wonder why farming is treated differently. Even for me, seeing this headline makes me feel bad for farming and the idyllic view I have of it.
Most F1 pilots do not own the cars, the race tracks, or even the suits they're wearing while driving. Neither do they own the F1 organization, the F1 brand or any of the technology involved.
If you look at history, this is an ancient pattern.
In Judaeo-Christian scriptures, the prohibitions against anyone acquiring ownership of land go all the way back to the Torah.
Though like pretty much every religious prohibition on behaviors which the well-to-do want to do - those commandments fall under the "we never talk about that part" rule.
There is no biblical prohibition against owning land, but there is plenty of debate, discussion and grappling with the problems of ownership and accumulation. It shows it always an issue, and rules and laws and social norms always need to be debated and changed.
In the Levitical law, there was specifically a concept that all of the land in Israel be split up equally among families. And that ownership of the land reverts every 49 years. So "buying" land was tantamount to a lease.
There is actually some interesting scholarly work that shows such a system would work perfectly fine within a modern capitalist system - it would reduce inequality and neatly lines up with natural debt cycles.
Forget China. The greatest threat to American freedom and global power is robber baron billionaires. We live in a full-on kleptocracy. It's about time we add some new amendments to the constitution to relevel the balance of powers.
I have to admit that for as corrupt as Illinois is, Pritzker has managed to support a few things which his billionaire buddies weren't too fond of. It's not all good, but it's better than I expected. He's called for higher taxes on the rich, stronger labor protections, higher minimum wages and better support for the poors.
It's both sardonic and genuine. If he's genuine, then I genuinely wish him the best luck. However, it is very hard for me to believe that any billionaire would ever do something generally disfavorable to the current billionaire class. It's even harder for me to believe that, if one of them was to do so, that it would not be for their own further gain, just to the detriment of their peer cohort. I'm a bit jaded from having been lied to too many times.
Again, however, if he is genuine: I genuinely wish him the best luck taking on his matched opponents.
The problem is that they have bought all three systems of government so they can do whatever they want. They own all the media as well. Even something like PBS that is supposed to be more independent is highly dependent on "philanthropy" from these same billionaires and they've fallen victim to what I'm going to moniker as Sinclair's Law ("It is difficult to get someone to understand something when their salary depends upon not understanding it" -Upton Sinclair)
There are plenty of countries that don't like capitalism. If you don't like it you can move to one of those. You can even go somewhere like the UK if you don't want to give up the US's anglo/protestant culture.
We have a lot of problems in the US but electing our own shyster based on lies to get a democratic president isn't going to fix the problem.
We'll need a truth and reconciliation group after or if Trump gets out of power. We need significant reforms, like getting rid of the electoral college and making supreme court justices have term limits but also not be able to take bribes. Also the president should not have immunity - the unitary executive theory is incredibly dangerous and destructive.
Only suits particular crops. For most things, the infrastructure would be needlessly expensive. More viable to plant and harvest at scale with massive machinery.
in the long view, much of the US's economic success (prior to the post-wwii economic miracle) can be attributed directly or indirectly to cheap and plentiful food. this of course means that farming is not a very profitable business. but that could change if a handful of large corporations buy up a plurality of the farms and exert their monopoly power to push prices up. this would be very bad.
Farm subsidies are both the single most important national security policy a nation can have, and an incredibly inexpensive yet extremely effective insurance policy.
The Omnivore's Dilemma points out that the food economy doesn't even behave like the normal economy - supply is variable due to weather (bumper crop vs famine year) but demand is inelastic, people generally eat the same amount year-to-year. How do you grow your food business if people only eat so much? One method is to increase portion sizes.
Europe also does some very heavy subsidies. Without subsidies, a lot of farming just goes away due to the uncompetitiveness in labor vs the southern hemisphere. The Amazon would be replaced completely with farms for rich countries. It's not surprising that countries just don't want so much of the country basically depopulating.
- Use arable land where it exists, not just where the cheapest labor is
- Don't do deforestation or other such things
I would like policies that directly address this:
- Legal immigration fairly moves the people the arible land, rather than moving the farming to the cheap people. The goal would be in 200 years there is enough economic development and immigration that there is no longer global scale labor arbitrage.
- Paying to protect the land we directly care about directly protects that land, and removes the incentive to farm there after all. (If you farm there, you loose the preservation rent.)
Farmers in brazil are notoriously far-right-wing, just like else where, and so paying the gov to not farm has other return-to-center-and-sanity benefits too.
The US government also has a program of subsidizing/mandating biofuels that raise prices of both food and fuel for supposed environmental and energy security reasons that mostly don't pass a sniff test.
Yeah, biofuels is more of a PR program. You could cut that one without any real harm, and you could definitely cut back on corn in general and promote some other stuff or move things around
The risk is going back to the time where we left corn in piles to rot. That's not harmful in any kind of immediate sense, but losing that energy to waste heat instead of converting it back into usable energy is less than ideal.
> and you could definitely cut back on corn
It's not that you try to grow too much corn, but its yield can be pretty unpredictable. Last year, with favourable weather, yields around here were nearly 100 bushels per acre higher than pre-harvest estimates! That is a hell of a lot of extra product that nobody ever expected before the combines started rolling.
And if you plan for those freak years every year, you're going to end up short more often than not. There is a lot of guesswork involved. That is what ethanol was originally intended to be: A way to buffer that guesswork.
> in general and promote some other stuff
Like what?
1. The consumer dictates what you grow. The consumer loves corn (mostly because it turns into meat). You'd have to compel the consumer to eat something else, and that is going to be one hell of an uphill battle. Many organizations have been trying to get people away from meat for decades and meat consumption is only going up. Meat doesn't necessarily have to come from corn, granted, but other options are more expensive. The consumer isn't going to pay more for meat either.
2. Corn equipment is compatible with other human foods (beans, wheat, etc.) that are also being grown in the crop rotation. If you expect a corn/bean/wheat farmer to start growing carrots in place of corn, good luck. They'd never be able to afford the capital expenditure to add carrot equipment to their lineup.
Avoiding starvation on a country level is a good goal of government, even if it isn't perfectly efficient. That can mean price floors and things that are not optimal for cars or toys.
Besides keeping food costs low, as other commenters mentioned, I certainly think it's desirable to keep our agriculture sector from devolving into a small number of large corporations. I trust small independent farmers a lot more than I trust large corporations to take care of the land and to produce healthy food (which isn't to say independent farmers are perfect by any means).
We detached this comment from https://news.ycombinator.com/item?id=44738071 and marked it off-topic. It's not OK to follow users around HN and attack them for things they've posted in other threads, no matter who they are, what the topic is or whatever was in the original comment that you found objectionable. That's not what we do here.
Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. The margins get better as you get bigger but still not great.
Many of the buyers keep growing their farms because it's a status symbol. Everybody in your area will instantly know you're a big wig if you're one of the X family who has 2,000 acres all without the ick that comes with running other businesses. You can't buy that kind of status in my community with anything other than land.
Well, it is ultimately a real estate business. The "hundred grand" in profit is really there only to support the mortgage payments — meaning that's what other farmers are counting on, so they're going to drive the prices down to that point. It is like a tech startup. You are counting on the assets increasing in value when you exit. That is where the profit will eventually come from, hopefully. It is not a business for everyone, but I like it.
> Many of the buyers keep growing their farms because it's a status symbol.
And because the fun parts of the job end too quickly when you don't have enough acres. I'd at least like to double my acreage. That is where I think I'd no longer be in a position of "That's it? I want to keep going!" and instead "That was fun, but I think I've had enough."
That said, the machines keeps getting bigger, whether the farmer likes it or not, so perhaps in that future I'll need even more land to satisfy the pangs.
I'm glad there are lots of types of people!
It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court.
Plus in the states and wealth levels that many people on this website have, it is also a no brainer to save on taxes.
What I keep hearing from experienced estate attorneys is that California probate court is onerous and worth a lot of effort to avoid, but other state's have reasonable probate; it might still be worth it to avoid probate, but it's not such a big deal. OTOH, dealing with assets in a revocable trust can be a PITA while you're still alive and may not give much benefit while you're living either. If you're not in California, it's worth taking stock of the situation before you use California biased advice.
Having an estate in trust may not actually save on taxes either. Yes, you'll avoid probate fees in California, which is significant. But your estate will still pay estate tax. Otherwise, if an irrevocable trust holds the assets, it pays the taxes, and trusts have very abbreviated brackets; your heirs might well pay less income tax holding the property themselves.
When your heirs/beneficiaries die and their heirs become the new beneficiary, that's not subject to estate tax, which is great, but as a result it doesn't get a step up in basis. If the trust is large relative to the estate tax exemption, it's beneficial to not pay estate tax; if not, it's more beneficial to get a step up in basis.
Certainly, in some situations, trusts are more tax efficient, but you have to actually look at your situation to see. Default everyone should have a trust assumptions add a lot of senseless confusion and delay to the people who don't actually get a benefit from it. There are asset protection benefits from trusts as well, and it's reasonable to consider those depending on the situation as well.
Holding a farm in a trust or llc makes a lot of sense to me, because it makes it easier to split ownership without dividing the farm.
IANAL but to be clear, I'm pretty sure that CA does not have an estate tax. And the federal estate tax limit was just reaffirmed (BBB) at the prior threshold.
Non-judgmental curious question: why do you keep doing it? (As opposed to selling the land and buying tbills.)
Also non-judgmental curious question: what is this "ick" related to non-farming businesses?
I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people...
In farming, it is all laid out for you. Prices are already set in Chicago. The buyer is always there. You grow the product, deliver it, and that's that. These days, with the way technology has gone, you might not even interact with another person in the process.
What about all the non-organic farming, use of pesticides/antibiotics/etc., poor treatment of animals (sometimes), water waste in some cases (like almonds in CA), being beholden to & inevitably supporting the wonderful companies that are John Deere and Monsanto, having to use proprietary seeds and IP for such a basic human need, etc.? Some of our largest problems on the planet trace back to modern industrial farming.
To be clear, I love and respect farmers a ton, my comment isn't about them at all. They're amazing and hardworking and anybody in the the business would be dealing with the same problems. I'm just talking about the purity of the business itself that you're talking about. The idea that the job is somehow so morally pure compared to all the other jobs baffles me. Your average local job (waiter, cashier, postal delivery worker, janitor, etc.) would seem to have a much more direct positive and impact on people's happiness and much less of an opportunity to take advantage of other beings, as you put it.
That is all much the same as the prices being set in Chicago: Someone else has made the decision. While someone else no doubt feels the "ick", I am but the customer who is being taken advantage of. (Well, except in the case of Monsanto — they closed up shop years ago)
> Your average local job (waiter...
It seems you, deep down, even understand that. Comparing farming to being a waiter as opposed to the restaurant owner, I feel, is a pretty good portrayal of the difference and it is telling that you chose that point of comparison. Technically farming is like owning the restaurant, but in practice, because everything is laid out for you and decisions are made elsewhere, it feels more like being the waiter. You are layers removed from the "ick".
Depending on one's values though I'd see something similar in some modern conventional farming where the land is being degraded, but there's still the righteousness that you are feeding people so it's justified.
There are ways to farm and some other kinds of businesses too that are win win for everyone involved. They're generally not the most short term profitable. Or even in-one-lifetime profitable.
I therefore wondered if it refers to this, a disease of corn...or if it was just a coincidental use of the word.
https://www.nature.com/articles/srep43818.pdf?error=cookies_...
I work in project management for a massive multi-national, about as "businessy business" as you can get, and my moon-shining, hog-raising cousins give me shit for being a sellout (we grew up showing and milking cows together) but we all still can sense a vibe about "certain types from the big city" that's more about respect and shared culture that any sort of financial, social, political, or other illiteracy/incompetence.
I had a coworker once who lives in this region and owns some amount of farmland in a similar situation. He could have sold it and moved his family to <insert modest paradise here, in his case Florida> at any point; even now I think it would be easily done, if not as easy as in the past. But of course he still lives there, immiserating himself to keep the farm barely viable and working a second job to provide a livable salary.
Why? Because selling it would offend his dead father’s pride.
they might if you count opportunity cost (ok not $5M but you get my point)
You have tons of businesses that are viable (produce enough money to support a family) as long as you never load it with debt; because they do NOT produce enough to support a family and the debt load that would come from buying it.
So they're unsaleable.
I've been thinking about this situation as "the bakery trap". The labor dimension here is that the best possible career move for the person you've spent the past n years training is to immediately leave once they've mastered your hot-cross bun recipe.
Jokes on them because it's even less of a business now.
Eventually I met the father, and he was big into the farm life. running a small but industrial farm. I still didn't understand, he mentioned a love of feeding people, why is he doing this and why is he putting his family through this, my girlfriend was translating the things he said but I didn't get it, so I assumed language barrier. They did seem to be respected in the town though by all the shopkeepers. But given the options, they were quite liquid and wealthy, it seemed contrived.
Then I met the grandfather, now, I liked that guy. The grandfather had a diversified portfolio, golf ranges, restaurants, farms, different siblings and children running them all. There was no "I just love feeding people" bullshit, just revenue streams and property. The farmer son just got the short straw and had to adopt that persona.
Deluding yourself into believing in what you do is easier than getting up every morning knowing it's bullshit.
Certain areas of government, debt collection companies, insurance industry, there are literally high rises full of people who live that existence every single day.
Yeah, this is the pertinent detail. The whole point is putting down only a fraction of the amount.
When you calculate the rate of return on a financed property, the rate of return is versus the capital you put down, not the value of what you financed. Plus accruing equity in the property is part of the return.
If you put down $1.25 million and you get a $5 million property paid off after 20 years, that's double the rate of return on your bonds.
But opportunity cost is a thing. No land equals no farm and no opportunity for that return.
If not farming, what kind of job can the would-be farmer get and how would they accrue enough capital for their return on T-bills + income to equal their farming income paying off the land? Also my calculations didn't consider that the land value would rise, which it almost assuredly would.
Let me tell you about farming... this isn't true.
When you buy land to develop, you have to pony up cash for it. I have never heard of a lender lending without a cash flow producing asset as collateral.
Doesn't seem accurate. See:
https://agamerica.com/land-loans/real-estate-loans/
https://www.farmcrediteast.com/en/FINANCING/Land-Loans
Land not occupied by some money making asset also being financed or used as collateral in the deal cannot be financed at rates that are not the lending equivalent of a "we really don't want this job so we're bidding high".
Since you're an expert link poster why don't you cherry pick us all up some of those underwriting guidelines you cite?
I look forward to learning about ag specific loan products.
Guidelines are openly available at Fannie Mae, Freddie Mac, and USDA websites (unless there are specific overlays a bank is using, which is typically proprietary).
I love government subsidies through implicit and explicit loan guarantees. It’s the reason a 30 year mortgage exists. It’s the reason one can default on an FHA mortgage with almost no consequences (while being almost impossible to default on student loan debt).
To your point this is “subsidized by the rest of us,” the bottom 50% of American earners only pay 2.3% of total federal income tax collected, with the top 50% paying the rest. The poor folks are not on the hook for subsidies when they come out of general federal gov revenue (FHA loans charge an upfront and monthly mortgage insurance premium, and there are similar costs for USDA and VA loans but lesser so; we can consider those costs “cost recovery” for the purpose of evaluating self funded vs subsidies via transfer from the general fund).
https://taxfoundation.org/data/all/federal/latest-federal-in...
Like student loans?
>It’s the reason a 30 year mortgage exists.
Which is a large part of the reason houses cost what they do.
>the bottom 50% of American earners only pay 2.3% of total federal income tax collected,
"Well the poors aren't paying for it, you are" isn't the endorsement you think it is. And the poors still get kicked in the dick by spending driven inflation same as the rest of us anyway.
I have no experience with farmland, but for other purposes such as building hotels/retail/etc, you can't just get a loan for the land, you buy the land with cash and then get a construction loan to start development. I assumed you would have to at least need to have a plan to operate a farm to get a loan.
https://www.farmcreditil.com/Products/farm-loans
There's even government grants and loans to help:
https://www.fsa.usda.gov/resources/farm-loan-programs/farm-o...
Edit - we're on HN. If you'd ever tried to get a business loan you'd know it's near impossible for a new business without 100% collateral, which is why the entire venture capital business, and HN, even exists...
>Farm Ownership Loans offer up to 100 percent financing and are a valuable resource to help farmers and ranchers purchase or enlarge family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations.
What is "assist with land tenure to save farmland for future generations"? Is that speculating for future price increase?
Banks will let you finance any land if you have a way to pay for it. They'll let you mortgage some plot of land in the middle of nowhere if you have the income to pay for it.
A farm is income. A future farm is a business plan. But if you want to speculate on land from the city and work an office job, yeah, they'll give you a loan for that too.
> What is "assist with land tenure to save farmland for future generations"? Is that speculating for future price increase?
Pretty much yeah.
> Note: The 12 selected counties had some of the highest cash rents in the state. For the purposes of this analysis, a business entity was defined as an organization with an LLC, Inc, LTD, Co, Corp, LP or LLP tag. This land is not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses.
Edit: apparently not that buried...
> These acres are not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses because they offer tax benefits and externalize losses.
I don't trust LLMs, even to summarize for me. I have to fact-check every single statement. For instance, if I ask ChatGPT, "Is PLA more dense than ABS?" it answers, "No, PLA is not more dense than ABS." Those are direct quotes. In the third paragraph, ChatGPT says, "So technically, PLA is denser than ABS, not less — I misspoke earlier."
I find LLMs good for using words that I didn't think of. I can then reword a search to get better search results.
To be fair, the cherry-picked example I used above sounds a lot like a human. Humans make such mistakes and corrections. If a human had given me that response, I would shrug and ask more questions. But it would make that human not be my go to source.
It makes me shudder to think about code that is written in such a manner.
Mistakes happen. If they are honest mistakes, then we can deal with it. If they are deliberate mistakes, well, we can deal with that too but in a different manner. The problem that I have is answering something in a confident manner when it's really a hedge to not sound unsure. People apparently have issues with an unsure bot. I'd much rather have a response like, "I'm not positive, but I think PLA is less dense than ABS" for the wiggle room of being able to come back later with "So technically, PLA is more dense than ABS". Even if the bot doesn't figure it out, by phrasing that way, you're clued in on what to fact check
Often it has the property which was good enough for generations of C and C++ programmers, it compiles. Does it work? Eh. Do the tests, if there even are tests, check anything useful? Eh.
The focus on "it doesn't matter so long as it compiles" justifies everything up to IFNDR†, the explicit choice in C++ that if what you've written is nonsense but it would not be easy to modify the compiler to notice, just don't worry about it and say it's somebody else's problem.
† "Ill-formed, No Diagnostic Required" these words or near equivalent occur frequently in the ISO definition of the language.
Edit: my (extended) family has a farm, and they cultivate X0,000 acres every year, though they own far less. They do plant a larger area than most for their community, but they’re not planting 20x their neighbors.
It's small in that you can't support a family farming 500 acres of corn/beans. It's big in that buying 500 acres would cost $5M - $10M, that's real money!
So I guess it would depend on the automation level of the kind of crops you’re planting.
My mom's relatives have a long horn "farm" complying with the minimum requirements to claim various tax exemptions. :sigh: Their family business is aviation real estate, services, equipment, and aircraft.
I can walk to where sorghum and field corn is grown here in hill country because that's the major trade in these parts, apart from selling land for new housing developments.
A limited company owning the "land" which is then leased to the "farm" business that works it.
Possibly a "group" parent company is owned by the actual farmer.
I'm sure there will be good tax and legal protection reasons to structure farms in this way, not forgetting various government schemes which bring in revenue via grants and tax breaks.
Illinois state is in a bad financial position, they can't inflate their way out of it. Financial assets are easier to move than land if things get bad.
There are millions of Americans who own what would otherwise be "developable and valued as such" land that became basically worthless with the state passage of various environmental laws (particularly wetlands setback stuff) that make the juice not worth the squeeze except if the location were to become "major urban area" level dense while the municipalities passed zoning laws making it all but impossible for that to ever happen.
I guess when you think about it it's not that the land is less valuable. It's that there's no value left after doing what you'd need (endless engineering and construction hoops, lawyers, court, etc) to extract the value without the government just unilaterally deciding you no longer own the land and backing that up with violence.
Land value can decrease in real terms at the same time inflation is happening, sure. But it isn’t revalued by inflation in the way that a contract denominated in the inflationary currency is.
Can you explain more about what you mean?
You buy land at time t for price x. You sell land at time t+1 for price y. If (y-x)/x is is less than the same calculation for whatever other asset you would have bought (I would use sp500), then you lost money.
Land in the desert with zero economic value (think Slab City) probably does not keep up with inflation.
Reminds me of when, a few years ago, the outrage headlines were "half of all US corporations didn't pay income tax last year!"
When one dug into it, it was because half the corporations didn't make any money that year.
can you elaborate on this perception?
At least when I still farmed that's what it was. I answered to myself, not to customers or clients.
The amount of land owned by "out of state" owners may help answer this question but they don't give a number for that either. (A local farmer could also register their LLC out of state though I'm not sure whether that's beneficial or not.)
(I'm not a member of any guilds)
There is no type of farming that beats t-bills today if you buy the land today. There is a saying in farming: "Buying farmland never makes sense the day you buy it." The land you bought 50 years ago is looking pretty damn good now, though. The economic bet farmers not cashing out (or buying in) are making is that trend will continue.
Vertical integration can have benefits, but it isn't necessary and has drawbacks. Even when vertically integrated, regulations are often written under the assumption that everything is leased, not owned, so compliance is easier if you own a company that owns an asset, instead of owning that asset directly.
For example, if two people carpool in a car that one of them owns, instead of hiring a taxi, they'll usually split the costs of the fuel and the wear on the car. On the other hand, if they were flying in a small airplane owned by one of them, it's illegal to split the costs of wear on the airplane, unless its a rental or air taxi. Because of this, and other similar effects of FAA regulations, many small airplane owners own a company that owns the airplane, instead of owning it outright, and rent the airplane from themselves, whenever they use it.
Sounds nice but it's not true in the US. A majority (60%) of US land in farms is owner-operated.[1] US homeownership is 65% meaning most housing units are owner-occupied.[2] And 60% of North American airplanes are owner-operated not leased.[3]
[1]https://www.ers.usda.gov/topics/farm-economy/land-use-land-v... [2]https://www.advisorperspectives.com/dshort/updates/2025/07/2... [3]https://www.iata.org/en/iata-repository/publications/economi...
I’d bet it’s less than 60%
I guess, for me, most would have to be something north of 80% because it just doesn't feel right to use it below that. 65% would be majority, obviously, maybe significant majority or some such.
Anyone else feel this way?
Edit: if anyone else reads this, I totally shouldn't have even brought this up. Downvote away, but as other replies have pointed out I missed the definition of "most" when you're comparing numbers against each other.
Most people who voted for US President in 2020, voted for Joseph Robinette Biden, Jr.
The majority of people who voted for US President in 2020, voted for Joseph Robinette Biden, Jr.
(I'm a native speaker, but there might be some regional differences here.)
Regardless, the majority is also the plurality so using most when it is over 50% would also be acceptable.
>If there are 3 people and 2 of them have $5 each and the third has $6 it would be correct to say the third has the most money despite not having 50% + 1.
This is not an applicable example, as most is not being used to refer to the proportion of money. It is using a different definition of most, which is the top rank when ranking things by quantity.
https://dictionary.cambridge.org/us/dictionary/english/most
No, "most" does not mean "80%" or any other made up number.
I prefer Merriam Webster, which is far more clear. Definition 2 (defn 1 does not apply in this context): https://www.merriam-webster.com/dictionary/most
There may be a minority government elected, with 40% of the seats, and 30%, 20%, 10% to other parties.
The 40% party will be described as winning the most seats.
Anyway, appreciate you reminding me (and I deserved to feel dumb so also making me feel a bit dumb about it).
It's a different definition than defn 2 (m-w), which is what is used when saying "Most farms are not owned by farmers."
"The 40% party won the most seats" carries a different meaning than "The 40% party won most seats"
Pure "most" is implicitly that option versus all the rest.
Maybe you should read the link I provided. It would likely clear up a lot of misconceptions for you.
You need ~$1M worth of equipment to farm 80 acres (~$1M worth of land), but that same equipment can basically farm 800 acres (~10M worth of land). An equipment issue can destroy a years worth of work with 800 acres (e.g. frost damage from delays), but with 8000 acres you can have spares / avoid the loss with some overtime.
Fertilizer and pesticides aren't neatly contained. If you farm different crops than your neighbors, overspray can kill your yield (e.g. weeds spray for corn kills soybeans). Laws around who can grow/spray what and being big helps make that better
All new? That seems way too low. You'd struggle to get into a combine alone.
Used? That seems way too high. I doubt I'd get any more than $300k for my equipment (and that's more than I paid) if I were to sell it today, and it's pretty nice equipment compared to what I see a lot of farmers using.
> 80 acres (~$1M worth of land)
We always wonder why so cheap? The 18 acres for sale down the road from me wants just about $1M (I expect that will be a hard sell, to be fair). The 130 acres further down the road wants nearly $4M (quite realistic; comparable parcels have sold for more). If you could pick up 80 acres in these parts for $1M, you just won the lottery. And, to be clear, it's not like on the edge of a city or something where other interests are driving up the price. It's just farmland. The yields are respectable, but not quite like Illinois will produce.
I work for John Deere, though I don't speak for the company. All tractors are built to order, which means when someone buys a new tractor the dealer has several months to sell the trade-in. When the new tractor arrives from the factory the truck unloads the new one, and loads the trade in to take to someone else. A good dealer will have a list of farmers and what equipment they all have so they can put this deal together. As a result the only tractors a dealer has are service loaners (which are sometimes rented), which makes all the accountants happy.
You'd think, but you'd be surprised. In fact, one of the families I rent land from (aging couple who was looking to work less land) is still working around 50 of their acres themselves and they got a couple of new tractors recently.
> They are likely hiring someone else with a combine to harvest their fields
They even combine the crop themselves. But, to be fair, the combine is pretty old (IH 1420).
Don't forget tax deductions. There is a reason the week between Christmas and New Year is a big on for tractor sales - your accountant suggests you want to get the down payment out now and off your books. As an accountant to explain it (I don't fully understand this)
A rational economic actor would sell the land. 80 acres would fetch around $2M around here pretty easily. You're not getting $2M of pure economic value of 80 acres.
But what are you going to supplant the enjoyment of being out on the farm with? No amount of money can buy a suitable replacement.
You must have better land than we do. Land by me goes for around 14K/ acre. The bigger plots or better land goes higher.
It's decent enough, but hardly the best ever known. 200-220bu corn and 50-60bu soybeans would be pretty typical for good ground. Whereas, as I understand it, that is merely average ground in Illinois?
But the farmers are really hungry. Case in point: When I was a kid there were eight adjacent farms, including where I grew up, that all had farmers living on them. Of their kids (my generation), there are now 12 of us trying to farm in the same area. That's a 50% increase! As you can imagine, the competition is fierce.
I'm sure you're right about the compliance thing in general, but I don't get your example.
Actually, even if you are a licensed commercial pilot, there are still strict rules around payment. You can be paid for your skill as a pilot, but you cannot, e.g. charge for giving rides in your personal airplane.
While that sounds like a bad rule when I first read it, I smell Chesterton's fence here. I'd like to understand why that regulation was written before getting rid of it.
You can take your friend for a spin in your plane if you want, or go screw around and kill yourself, but you cannot "hold out" your operation as an air taxi or airline to the general public, and you can't make money off of it in any situation.
A commercial pilot has to undergo much more training in operating an aircraft safely. This means the FAA allows them to get paid to be a pilot - they could be hired to fly someone around in that person's plane. But the commercial license does not really train them in running a safe airline, so the FAA does not allow them to use their own plane to run an airline.
EDIT: To word it differently, the opportunity to get paid increases the likelihood that someone will push limits or take unsafe risks. If you aren't under pressure to make your paycheck, you're less likely to take your passengers into marginal weather. (One of the most dangerous occupations in aviation is medivac/aviation EMS. There, the pressure isn't generally monetary but moral: you want to help a sick patient, so you take more risks.)
Critical care (but not flight) paramedic (though I have transferred patients hundreds of times to them):
When we request Heli EMS tht providers are given patient details, but the pilot is strictly given "pickup" and "destination" (they used to be given patient weight, and may still be depending on location and size of helo, but generally not) - the goal being "evaluate safety based on weather conditions only, not a patient condition that tugs the heart strings".
A grandfather-in-law owned his own small business (a civil engineering firm), and had a plane that he flew to get to meetings/job sites across the Midwest. He could fly company employees just fine- and the company could reimburse him for the flight expense, and since it was not for the public that was fine. He could fly his family or friends on his own dime just fine. But if a family member or friend not working for the company tried to compensate him for the costs, then it is a question of "is his company actually an unlicensed airline?" and now we're getting into territory where it gets complicated. The FAA heavily regulates airlines, which is a major reason they are so safe. But there has to be a lower bound on what gets regulated, and avoiding that is what I think that GP is referencing.
Historically, laws were written by the legislative branch (congress), enforced by the executive branch (the office of the president), and overseen by the judicial branch (federal courts). When oversight works, all three have to agree for an enforcement action to take place.
In somewhat recent history, congress has been passing regulations much less, instead passing authorizations for the executive branch to write their own regulations. On top of this, the judicial branch had, until last year, allowed executive organizations to use their own judges, without juries, and follow their own interpretation of laws and regulations, when it conflicted with a literal interpretation. See https://en.wikipedia.org/wiki/SEC_v._Jarkesy and https://en.wikipedia.org/wiki/Loper_Bright_Enterprises_v._Ra... for the recent rulings overturning those precedents.
The effects of those last two cases are still working their way through the relevant bureaucracies, so until then, the FAA will keep with their current interpretation of gaining experience as a form of commercial income (https://www.faa.gov/media/15611) and having a reputation as form of advertising (https://www.faa.gov/documentLibrary/media/Advisory_Circular/...).
Even then, there's a hole in the system that especially impacts overly broad definitions of commercial activity, which as far as I'm aware, no other executive organization has taken anywhere close to the extreme of the FAA.
That hole is that even with the precedent of the recent supreme court rulings, they only take effect when something goes to the courts. With real commercial activity, this happens regularly and often preemptively, because the costs and resources needed to take something to court are easily recovered by the extra income or savings of a ruling that follows proper checks and balances.
On the other hand, there is no incentive to spend the money and resources needed to regain rights for non-commercial activities, like carpooling (or airplanepooling) where no one is earning anything.
It's simple. Getting a commercial pilot license is a much more involved process than getting a private pilot license.
A private pilot needs just around 30 hours of flight time to get a license. A commercial pilot needs at least 250 hours and a medical certificate that needs to be renewed periodically.
I understood that. But the post I quoted said that you couldn't accept payment even if you were a licensed commercial pilot, if you owned the plane. I'd expect the 250 hours and the medical certificate to be enough to make it safe for you to accept payment, and apparently the regulators who formulated the rule don't think that's the case. I was saying that I'd like to understand why they don't think that's the case before I'd want to support any relief on that rule.
You absolutely can. But your _aircraft_ also has to be maintained to commercial standards (likely FAR 135).
Basically, you need to operate an airline to carry paying passengers.
That's true, but for anything other than the most podunk regional airline, you're going to need 1,500 PIC (pilot-in-command) hours before the airline will even consider you (although I believe I heard due to pilot shortages some airlines were willing to consider 1,000 hours).
So most homes are owned by the occupant. I suppose if you want to be pedantic and say mortgaged homes are owned by the bank, sure I guess?
But I think homes should not be included in your list here.
Well, pedantically, you own the home, but the bank has a lien, and contractual rights in the event of default. But the title is in your name.
Contrast to a vehicle, where the lender is the Legal Owner on registration docs, and retains title (in all but two states, I believe).
I think the difference is for real estate, title documents and liens are recorded, whereas for vehicles, titles are registered, and possession of the physical title is almost enough to change the registration; it makes sense for the lender to physically hold the title until the loan is satisfied, in order to prevent a sale without paying back the loan.
This isn't true:
https://www.faa.gov/documentLibrary/media/Advisory_Circular/...
That AC and the regulations cited in it couldn't be clearer-- if you and the pilot are both going to $destination for $reasons, you and the pilot can definitely split the cost of the fuel.
Moreover, this is perfectly analogous to the carpooling example as you stated it-- two people both having a stated purpose traveling to a destination, both sharing the cost of gas/wear.
There of course could be ways to carpool where the passengers pay the total cost of the driver's gas/wear/etc. You can't do that in your airplane. But again, I think the reasons for this are glaringly obvious-- keep silicon valley from attempting to create an unregulated taxi service in the sky. (In fact, IIRC there was someone who tried over a decade ago-- perhaps these laws are a response to that?)
> Because of this, and other similar effects of FAA regulations, many small airplane owners own a company that owns the airplane, instead of owning it outright, and rent the airplane from themselves, whenever they use it.
I mean, the pilots I know who do that are either a) multiple people owning a single plane, or b) single owner literally running a rental taxi service. Who isn't covered by those two categories?
Also, I think it's worth mentioning that the advisory circulars, legal interpretations, and other letters the FAA writes aren't regulations, and it takes a ruling going to a federal court, not an FAA panel or tribunal, to set a precedent for what is and isn't legal. As far as I understand, this has never happened with FAR 61.113, which is a bit self contradictory and the FAA's overly broad definition of compensation where "the building up of flight time may be compensatory in nature if the pilot does not have to pay the costs of operating the aircraft" (https://www.faa.gov/media/15611) is extremely unlikely to ever hold up to a jury.
Government should focus on making it easier for new companies to compete as that is what generally yields better and/or less expensive products.
(the general upwards trajectory of real estate makes it an investment even when it does not generate any income, do much better than owning a boat!)
I would also push back on the notion that owner-operators are in a better position. It's more accurate to say that farmers who have assets of any kind are better off than those who don't have assets. As an example, generations back in my family we owned a lot of farmland. There were some bad investments made in the farming operation and we almost lost it all. This was in the early 1980s for those who are familiar.
If my grandfather had sold all of his land and equipment in the late 1970s and invested it in the recently-started Vanguard group, rather than re-investing in the farming operation, then my family would be wealthy. Now expecting a farmer to know about index investing and to bet on it when it was just starting is unreasonable. But it's a good lesson in diversification.
When people lionize farming owner-operators, they discount the risk that owner is taking by having so many assets concentrated in one operation. Now farmers do know about investing and diversification, and some do make the rational decision to cash out. Many also don't, for various reasons.
But it's not totally fair to expect farmers to behave differently than other asset owners because farming is seen romantically or in terms of national security.
This is a different argument than one which would decry the position of tenant farmers. Obviously being a tenant farmer owning nothing but equipment is harder than being a farmer who has $5 million invested somewhere else and rents the land he farms.
Obviously there are recessions and having your own vegetable farm and place to live is nice... but most of the time there isn't a cataclysmic recession, so you're leaving money on the table. Meanwhile, it's pretty easy to have a bad year farming. Weather. Pests. Having a lot of assets doesn't help you when they're not liquid and plants won't grow for a year.
Also, farming is mom and pop highly optimized operation. Those two don’t need to be separate things. Once you understand that running a farm can be hundreds of thousands of dollars if not millions, you can understand the disconnect.
BigAg farms? You're absolutely right.
Of course, the irony is that now we romanticize industry too.
And yet, farmers are a vocal and critical political bloc in every other EU country, too.
Farming is just important. Not as much because it employs a large portion of the population, but because it keeps a large portion of the population alive. It is the original industry that's "too big to fail" - if you let it, you get famine.
I think the founders would be pretty surprised to see the vast majority of electoral votes being determined all-or-nothing by the popular vote of the citizens of the state. If that was how they intended it to work, you might think they would've set it up that way in the first place.
To the electorate at large.
It set up the critical vulnerability that we have today, that in states where the votes are close at the state level, switching just a handful of votes completely moves the votes in the electoral college. This will be a continuing temptation, and a weakness of the us system. The 200 or 300k votes in swing states that had Biden beating Trump and then Trump beating Harris this time is not a great thing in democracy.
So this vulnerability makes it a potential attraction to steal votes. There was the notorious recorded phone call when Trump called up the Secretary of State in Georgia and said he only needed 11,700 votes, please give them to him.
They explicitly negotiated the electoral college to protect their ability to not be overwhelmed by more populous states, and forever maintain their voice in the union. It is working exactly as intended, and is essentially a contract we are all a party to.
We don't let one party unilaterally change other contracts, why should we here? It seems you'd have to be a very big hypocrite to support such a thing. You should honour the deal or find a way to renegotiate it that makes everyone happy, not just yourself.
For another, we're not bound to contracts between people who are long dead.
For another, the constitution (little c, not the actual document) is not a literal contract. That's a methaphor.
Finally: Why do you, as a person, want a system where land can vote? Or are you a parcel of land pretending to be a person?
Direct election of senators has been way worse for the country. You need something that represents the states as entities.
Once you start thinking about that, a lot of the mystery or 'inefficiency' of farming in the USA makes more sense. For example, the subsidies to grow corn and soy but not kale and squash or whatever was in the article- growing kale and squash isn't a strategic priority.
https://www.osc.ny.gov/files/reports/pdf/profile-of-agricult...
It's interesting how little of NY state is farmland (21.6%).
"When the extended family of the farmer is taken into consideration, 94.6 percent of New York farms are family-owned."
At this point I think it's basically impossible to actually lose money on a farm as long as it's family/individual owner-operator.
It's also why NY state cropland is among the most expensive in the country. Once you get it, the value will only ever go up regardless of crop yield in any given year.
https://en.wikipedia.org/wiki/Orville_Freeman https://ers.usda.gov/sites/default/files/_laserfiche/publica...
“They want that land to be clean corn and soybeans,” Bishop said. Before the restrictions, his father was growing organic corn and soybeans on part of the field and letting Bishop grow vegetables on the rest.
I've seen this mentioned elsewhere, but the idea that you'd force someone else to create a mono-crop desert, not even out of a sense of efficiency, but _just because it looks right_, is just so frustrating.
it's not a new phenomenon, most people who bought the farm do not follow through and till that land...
ok ok, i'll stop. to people who are not native speakers of US English, "bought the farm" is a euphemism for dying https://en.wiktionary.org/wiki/buy_the_farm#English
from that link: "Etymology: Not known with certainty. Two long-held hypotheses are as follows: One describes combat soldiers wistfully wishing to go back home, buy a farm, and live peacefully there; later, after they had been killed in combat, their fellow soldiers would say that they had bought the farm (compare the established metaphor pattern of having gone to that big [whatever sort of nice place] in the sky). Another links the phrase to the idea that governments compensate farmers whose land is damaged by a military aircraft crash; a deceased pilot was thus said to have bought the farm, and the term eventually entered wider use."
> More than 22% of the farmland in 12 Illinois counties with the highest rents is owned by a business entity, defined as an operation with an LLC, Inc, LTD, Co., Corp, LP or LLP tag. Sangamon and Edgar counties were included in this analysis because historical data was not needed.
The TL;DR is that Illinois is one of the few states where there aren't restrictions on farmland owners, and even there it's a small (if growing) problem.
I think this is one of those problems that should theoretically be self-limiting. The economics of a farming family owning their land is too strong - just from the amount of tax breaks and subsidies available. Put another way, the land in a farmer's hands is worth more than in a corporation's.
I think the real risk comes from large farm landholders who want to cash out of their farm but don't have an heir or successor lined up. Farmers are getting old and their kids more often than not don't want to run the family farm anymore and there simply aren't going to be any other buyers.
We sold it to some outside group. Apparently the best way to sell land today is an online action. You announce it ahead of time, there is a minimal amount to start bidding, and then like an ad auction, there is a minimal increment to go up by, fixed time limit of like a week to bid.
I was really sad that it left the family. The sale price of the midwest farm land ended up about $10k an acre for cropland. The amount of money that renting brought in didn't seem like it would be enough for any young person to actually buy land at current prices. I am sure they'd have a lot of tax deductions but can they get a million dollar loan? I expect there will be houses put on the land eventually. I had an idea for how to keep it suitable for future farmland, which was to put solar power on it with a 20 year contract with a local power company (with everything removed after).
Or you marry someone who will inherit land - this is often the best way in.
I inherited farm land from my grandfather. I am very much not a farmer, I do not want to live in Southern Illinois, but I don’t want to give up the land, so I rent the land to a farmer with adjacent property.
I realize that’s not really the point of this article—this is more about huge firms buying up non-trivial amounts of land.
Isn’t this the historical norm? Anyway, we don’t live in a communist utopia, so most people don’t own their workplace, farmers or not.
they should have noted _what percentage_ of farmland is owned by out-of-state businesses; otherwise the 250% increase isn't meaningful
In Judaeo-Christian scriptures, the prohibitions against anyone acquiring ownership of land go all the way back to the Torah.
Though like pretty much every religious prohibition on behaviors which the well-to-do want to do - those commandments fall under the "we never talk about that part" rule.
EDIT:
- Please note my "against anyone ACQUIRING ownership of" phrasing, above.
- Details are in Leviticus, Chapter 25
There is actually some interesting scholarly work that shows such a system would work perfectly fine within a modern capitalist system - it would reduce inequality and neatly lines up with natural debt cycles.
but you know, that interferes with commerce too much. (also part of the reason for huge amounts of anti-Semitism from about 1100-now )
Again, however, if he is genuine: I genuinely wish him the best luck taking on his matched opponents.
I also don't live in the US.
We'll need a truth and reconciliation group after or if Trump gets out of power. We need significant reforms, like getting rid of the electoral college and making supreme court justices have term limits but also not be able to take bribes. Also the president should not have immunity - the unitary executive theory is incredibly dangerous and destructive.
Farm subsidies are both the single most important national security policy a nation can have, and an incredibly inexpensive yet extremely effective insurance policy.
I thought the current thing was "shrinkflation"?
Need more legal immigration, and paying Brazil, etc. not to farm there. Better to do that than subsidize farmers.
- Use arable land where it exists, not just where the cheapest labor is
- Don't do deforestation or other such things
I would like policies that directly address this:
- Legal immigration fairly moves the people the arible land, rather than moving the farming to the cheap people. The goal would be in 200 years there is enough economic development and immigration that there is no longer global scale labor arbitrage.
- Paying to protect the land we directly care about directly protects that land, and removes the incentive to farm there after all. (If you farm there, you loose the preservation rent.)
Farmers in brazil are notoriously far-right-wing, just like else where, and so paying the gov to not farm has other return-to-center-and-sanity benefits too.
Our current system produces a successful harvest (and surplus) for us every year, so I'm gonna stick with that.
I think you could definitely move the subsidies around, but subsidizing food is a basic good idea for any state really.
The risk is going back to the time where we left corn in piles to rot. That's not harmful in any kind of immediate sense, but losing that energy to waste heat instead of converting it back into usable energy is less than ideal.
> and you could definitely cut back on corn
It's not that you try to grow too much corn, but its yield can be pretty unpredictable. Last year, with favourable weather, yields around here were nearly 100 bushels per acre higher than pre-harvest estimates! That is a hell of a lot of extra product that nobody ever expected before the combines started rolling.
And if you plan for those freak years every year, you're going to end up short more often than not. There is a lot of guesswork involved. That is what ethanol was originally intended to be: A way to buffer that guesswork.
> in general and promote some other stuff
Like what?
1. The consumer dictates what you grow. The consumer loves corn (mostly because it turns into meat). You'd have to compel the consumer to eat something else, and that is going to be one hell of an uphill battle. Many organizations have been trying to get people away from meat for decades and meat consumption is only going up. Meat doesn't necessarily have to come from corn, granted, but other options are more expensive. The consumer isn't going to pay more for meat either.
2. Corn equipment is compatible with other human foods (beans, wheat, etc.) that are also being grown in the crop rotation. If you expect a corn/bean/wheat farmer to start growing carrots in place of corn, good luck. They'd never be able to afford the capital expenditure to add carrot equipment to their lineup.
No, I don't love biofuels either. but it's not entirely a bad idea.