Farm And Ranch Country Posts

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farm land prices investmentI believe the topic of land prices and land as an investment is worthy of taking a chance.  I am a real estate broker so I follow land prices pretty close.

I look at what land prices have done in the past few years.  Hunting/brush land in the Midwest has gone down a lot in value.  The spread between good land and poorer quality land is getting wider.  Old saying “you pay for a good farm once,but a bad farm you keep on paying for it.  High quality land that is easy to farm continues to bring real good money.

I talk about how some in the ag media always mention the high land sale prices, but not the bargain buys.  Headlines sells media.  They always mention the extreme highs.  Generally you have to dig into the article to glean the information.

I discuss why a young farmer may look at a poorer quality tract to get started.  And, what are you going to eventually do with that land.  Occasionally at a land sale you can get a great bargain, but you may have to attend a hundred sales to get that bargain.  With today’s technology the cost to farm hard to farm ground is not as high as it used to be.  Beginning farmer programs also generally have a loan limit.

A central place of operations.  A “home” base if that describes it better.What does it need to be attractive?  Why a poorer piece of ground may work for that.  Things to consider: drainage, road access – is it 80,000# year around, type of electric delivery, 3 phase or not, natural gas, internet high speed availability school district, either high or low taxes, or if you build a home there, where the kids will go to school?  Is this place centrally located to your enterprise?  Remember to plan for expansion.  Shop, machinery storage, grain storage, grain drying, house, pond?

A cattle farmer is thinking about several tracts that lie next to each other, have cheap “brush” land, some tillable land and some abandoned pasture on it.  What he sees as an opportunity.  Skid steers, bulldozer, track hoe can clean up a farm real quick these days.

Biggest mistake I made when I was young was not buying more farmland when it was cheap.  It may not be cheap now, but equity in land will save several older farmers in these lean years.

I think at some point in your farming career I believe a farmer or rancher needs to get a tract of land bought and paid for.  Especially as a base of operations.  A place that is yours and you can run your operation out of that place.

As land prices have come off their highs, the spread between good ground and poorer ground has widened out.  So when land was at its high the spread was closer and the poor quality was not a good as buy.  At the bottom in the 1980’s poor ground was half the price of good ground.

Higher interest rates will affect the price of ground.  Lots of pressure to raise the interest rates so savers get a better rate of return.  Investors will put some of this money in the bank instead of land if interest rates rise.

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2016 will go down as the election year the parties lost control.

trump bernie save democracy

Both the democratic and republican establishments have taken big hits and have had a lot of exposure in how “the process” really works.

Dan Carlin on his Common Sense podcast calls Donald Trump a “Historical Arsonist” an

d that Bernie Sanders is “Supplying the Firewood”.  Others now

call Trump the Tangerine Tornado for tearing through the republican primary system.

One of the reasons Bernie will not win the democratic nomination is that the democratic party has even a more rigged process than the republicans do.  It is called “super delegates” on the democratic side.

I have always believed sunlight is one of natures best disinfectants and shining the light on how the parties pick “their” presidential candidates has lots of people in the general public in an uproar.  It has always been this way.  Now was just the first time with the “new” media it has been exposed for what it really is.  a rigged game from the start.  The two party system was designed so that whoever won the nominations could go on and be President that would satisfy the “elites” in this country.  Or the establishment if you will.

Occasionally a Barry Goldwater or George McGovern would win and then the establishment figured we will just make sure “our” candidate will win the general, and they did.

I really wonder could the political establishment destroy Barry Goldwater in this day and age with conservative talk radio, the internet and everybody having a phone on their camera.  When it was just the three big liberal networks and they controlled the message it was pretty easy to control the process.  But not now.  Newspapers also had a big say in what went on, but now how many 20 somethings  read a daily newspaper?

Trump has really shown people how to use the internet, social media, and self funding to win.  Jeb Bush’s super pac was spending money on billboards outside arenas where Trump had people in line who had ordered their tickets to the event on their cell phone.  Like they were going to look up from their phone to see a billboard?

Trump has also gone around all the high priced handlers, money bundlers, pollsters, economists, message makers, etc., etc., etc.  He has hurt the business of politics.  He also was meeting voters while early in the campaign other candidates were busy spending most of their time raising money, meeting high priced donors, and having their “message massaged” by all those high priced handlers.

My father is a World War 2 combat vet and this is a quote “first SOB to come along and not be politically correct, I am going to support them”.  Think a lot of people feel that way.

So where to from here.  I think there will be lots of resistance to change, but after lots of people found out they did not even get to vote (Colorado) or their vote was pretty worthless, several things will happen.

I see more open primaries.

I see delegate results tied directly to candidates and who the delegate HAS to vote for at the convention.

People really want to have a say in who is governing them.  I believe we are on the edge of more changes and a weakening of the party structure.

OPEN and HONEST elections are what people want.  Of course I can also say “be careful what you ask for you just might get it”.

Bernie and the Donald, two outsiders who I think if they could have had a chance running as independents for President would have.  But, the system was so rigged they had to work from the inside out and make it happen that way.  Bernie just did not have Donald’s resources.

2020 election especially the primary for whatever party does not win in 2016 should be real fun to watch!

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farm size matter part 2I just continue the discussion on farm size from part 1. My first morning’s periscope created lots of comments and discussion so I did a follow up the next day. People are real sensitive when it comes to farm size. Big guys think you are trying to make them look bad. Smaller farmers think the big guys get unfair advantages from input suppliers. The downturn in the farm economy has probably hit the big farmers harder. I also discuss the role of off farm jobs in making a successful operation.

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I do a periscope #BreakfastWithBill every morning at 7:30 am central time on the periscope app. You can eitherDoes farm size matter? listen there or on twitter. This is part 1 of a 2 part series I did a couple mornings back to back on farm size.

I discuss size of farms. I talk about a farm outside of San Francisco that is a direct marketing operation and this farm said their “sweet spot” for profitability was 10,000 broilers sold a year, 5000 laying hens and 300 hogs marketed which were raised farrow to finish. This is a pasture operation also. Which is a pretty big size for a direct marketing operation.

I talk about how if you do not have many acres how you probably need to be in livestock and / or vegetables and in a direct marketing or community supported agriculture. I also mention you probably will not be able to drive big 4 wheel drive tractors over lots of acres and drink beer in your shop all winter.

Size is relative to the type of operation one has. 10,000 acres of small grains way out west is not the same as 10,000 broilers direct marketed to individuals in a large city.

Enjoy the discussion.

My marketing plan for 2016.