Should I take over the family farm? Please advise

[MacLawn]

Sven, how old are ye? I'd say as long as ye stay in the real work world, health care, retirement plan at ye job, etc., you'd do good to go back to Utah. Ye farm would just be ye first love and a rightful hobby. Ye Pappy is already rich, and sounds like you even might be a tad dirty (as in filthy rich) yeself, so I say, get on back to Utah where ye belong. Then, when I come, ye can let me park me travel trailer on ye place a few dates and I'll hep ye out on ye farm. I've been about everywhere, speak Japanese, lived in Japan many years, Europe, etc., lived in San Francisco a couple of years, but am wanting to go to Utah and see the real west! I've only stopped at salt lake airport one time.

"Oh the weevils in the cotton,
And the corn don't grow,
Everybody's got trouble,
Every place I go,
Let the rain come down,
And the cold wind blow,
Gonna stay right here,
In the home I know,
Troubles, troubles, troubles..."

 

[NorTracNY]

Interesting read and decision to make. After reading it all, I don't see you enjoying the farm as much as you like. You have talent and you know you could do it well, but it doesn't sound like it's the family farm you grew up with, it won't be your farm, and it's only a temporary hobby that will compete with your job. Doesn't alfalfa need to be harvested at a certain time? What if that's during your 2 week business trip and your father is ill? Will you feel comfortable with him trying to help you out if he's ill? If you want to move closer to your parents, go ahead, but I see you trying to run the farm as a distraction. If you are enjoying your current job, stay with it.

It sounds clear that you are intelligent and will do well with what you focus on, but I don't understand the thought of starting a temporary adventure in what is left of your parent's farm.

 

[samhudson3]

I say go for it. Give it a year commitment, then re-evaluate.

If there's city pressure on the land, you've got lots of customers around. Folks are looking for local fruits and vegetables.

Life IS short, good luck!

 

[PapaPerk]

Go with your gut. But it's hard to leave your roots especially when you are older. Friends come and go... Family for better or worse is always a part of your life. And that's what's most important in the end.

 

[svenlylethor]

Try to take a long range view. Are there any farmland preservation efforts being funded in your County or statewide? When values are up and it comes time to sell there may be some PDR (purchase of development rights) program in place where your family would realize maybe 80-90% of the full value, still retain ownership for farming and you could afford to buy out the remaining 10-20% from siblings; that's what my neighbor did about 7 years ago and he's still farming it after retiring from a govt job. I think Utah has such a program but the funding ran out 2 years ago in the midst of the recession; maybe they'll crank it up when things pick up again. Just saying, it's something to inquire about and keep an eye on.

Funny you said that. Our neighbors wanted to go into a farmland preservation contract. (most of them have even smaller farms) My parents said **** no to that idea! our land is way too valuable to do something like that.

Just to give you guys some perspective on how much this 60 acre plot is worth, several years ago a large corporation wanted to buy our farm along with our neighbor's and put in a distribution warehouse because we're right off the freeway. They originally discussed purchasing our land for $80,000 per acre but because of the recession they decided to not move forward. $80,000 x 60 = ***** tons of money. My parents didn't mind because my dad had already sold other land and was more than comfortable with his money situation. He figured he still wanted land to farm with and he could hold out till later when he couldn't farm anymore.

Now I know the land isn't worth as much as that because of the recession but there's no way I would be able to buy the farm off my parents, nor would I want to. I just see this as a hobby farm to do on the side and spend more time with my dad now that his health is getting even worse. At this point we're just waiting for the right time to sell. Since we're now annexed in to the city, the land could easily sell in another 10 years.

 

[svenlylethor]

Sven, how old are ye? I'd say as long as ye stay in the real work world, health care, retirement plan at ye job, etc., you'd do good to go back to Utah. Ye farm would just be ye first love and a rightful hobby. Ye Pappy is already rich, and sounds like you even might be a tad dirty (as in filthy rich) yeself, so I say, get on back to Utah where ye belong. Then, when I come, ye can let me park me travel trailer on ye place a few dates and I'll hep ye out on ye farm. I've been about everywhere, speak Japanese, lived in Japan many years, Europe, etc., lived in San Francisco a couple of years, but am wanting to go to Utah and see the real west! I've only stopped at salt lake airport one time.

"Oh the weevils in the cotton,
And the corn don't grow,
Everybody's got trouble,
Every place I go,
Let the rain come down,
And the cold wind blow,
Gonna stay right here,
In the home I know,
Troubles, troubles, troubles..."

Yeah, I'd stay in the "real world" with a corporate job. I wouldn't go back unless I got a great job similar to what I have here. I would do this more for fun and to watch over my dad but I would still like to sell some hay on the side and at least try to be as profitable as possible. If I come back there'll be plenty of room for your travel trailer. :thumbsup:

BTW I'm 29. I turn 30 in the fall.

 

[svenlylethor]

Interesting read and decision to make. After reading it all, I don't see you enjoying the farm as much as you like. You have talent and you know you could do it well, but it doesn't sound like it's the family farm you grew up with, it won't be your farm, and it's only a temporary hobby that will compete with your job. Doesn't alfalfa need to be harvested at a certain time? What if that's during your 2 week business trip and your father is ill? Will you feel comfortable with him trying to help you out if he's ill? If you want to move closer to your parents, go ahead, but I see you trying to run the farm as a distraction. If you are enjoying your current job, stay with it.

It sounds clear that you are intelligent and will do well with what you focus on, but I don't understand the thought of starting a temporary adventure in what is left of your parent's farm.

Good point. Maybe if I do find a good job and move back to Utah I should manage my expectations on what I could really do to help. Maybe it's just living in Salt Lake where my work is and going back home on the weekends to help out in the fields. I'm sure he'd appreciate that. Either way my dad is going to be on the farm until his body has completely given up on him.

I like my work but I don't see myself here or in Boston permanently. I don't know if I'd ever settle down somewhere permanently but maybe that's just because I haven't found the right place yet. When I think about what I'd do in the near future it's usually about working for an international company, John Deere or AGCO corporate, getting an MBA, working abroad, moving back home, or a combination of any of those.

 

[timbatrader]

Earlier on in the thread the OP wanted to produce weed-free certified organic alfalfa in my experience weed free and organic just don’t go together the price you sell that for would have to be huge to justify the costs involved. Not sure which organization you would use to certify over there. Over here you would have to run the farm without chemicals for several years (up to five maybe) before you were able to claim organic status and get the premium price. Have you a plan on how you are going control the weeds organically 80 acres is a lot of acres to pull weeds by hand

 

[dave1949]

<snip>

I like my work but I don't see myself here or in Boston permanently. I don't know if I'd ever settle down somewhere permanently but maybe that's just because I haven't found the right place yet. When I think about what I'd do in the near future it's usually about working for an international company, John Deere or AGCO corporate, getting an MBA, working abroad, moving back home, or a combination of any of those.

You don't know what you want to be when you grow up. :laughing: Most people do struggle with that, or look back later in life and think about what may have been, what should have been, yada yada.

The jobs these days sort of lend themselves to multiple careers or careers in segments. Maybe you could identify some career goal segments. Give yourself 12-15 years at something you enjoy doing most. It probably won't be forever even if that were to be your preference.

Your family life makes a difference, not just your parent's. Jobs with lots of travel are hard on relationships and child raising. If you like doing that now and have the freedom to do it, I would say carry on and be happy.

Personally, I wouldn't invest a lot of time and emotion into a farm that I will never own. If you want to own a farm, I would start with one that you have sole control over now and into the future.

Providing support to aging parents is a challenge when you aren't near, and of course you feel some obligation to "be there" for family. On the other hand, parents want their kids to do well and follow their own course. They didn't raise you to hang around for ever. Parents understand you need to live your own life. I think, if I have read well, that if you remove your Dad from the equation, you wouldn't really consider temporarily messing with 60-80 acres of alfalfa.

Whatever you do, give the ideas time to cook a bit. In two-three-six months you may see it differently.

 

[downslope]

Funny you said that. Our neighbors wanted to go into a farmland preservation contract. (most of them have even smaller farms) My parents said **** no to that idea! our land is way too valuable to do something like that.

Just to give you guys some perspective on how much this 60 acre plot is worth, several years ago a large corporation wanted to buy our farm along with our neighbor's and put in a distribution warehouse because we're right off the freeway. They originally discussed purchasing our land for $80,000 per acre but because of the recession they decided to not move forward. $80,000 x 60 = ***** tons of money. My parents didn't mind because my dad had already sold other land and was more than comfortable with his money situation. He figured he still wanted land to farm with and he could hold out till later when he couldn't farm anymore.

Now I know the land isn't worth as much as that because of the recession but there's no way I would be able to buy the farm off my parents, nor would I want to. I just see this as a hobby farm to do on the side and spend more time with my dad now that his health is getting even worse. At this point we're just waiting for the right time to sell. Since we're now annexed in to the city, the land could easily sell in another 10 years.

I don't know how the preservation programs were working in your area, but are you saying they weren't offering your neighbors in the range of 80-90% of full appraised value? If they were, then you could sell the DR, still own the land and farm it and have the option of selling in the future to another farmer or horse person and recoup the balance, if desired. The way sale of DR usually works is that you should receive full appraised value minus what the land is worth as farmland.

I'll give you another perspective. Farmland in our area (about 2 hours from NYC) on which the development rights have already been sold off (the land can only be used for farming) still fetches $30-35K per acre. I only own 30 acres but back in 2007 when things were booming it was appraised at over $300K per acre and it's highest and best allowable use is only for residential single family homes. So, like your parents I'm waiting and hoping for things to bounce back, which maybe is starting to happen.

If your parents are comfortable now, then they have no reason to sell at all. Just let it pass to the children and you will all inherit it at the stepped-up basis and possibly avoid capital gains taxes in the future. If it really has commercial/industrial potential and your family's only goals are to maximize profit, then your father has the right idea, just sit on it and wait for the economy to fully recover, either in his lifetime or whenever.

EDIT: The only point I was trying to make here is that there's nothing wrong with farming on expensive land where the ROI appears poor as long as either (1) It's a hobby farm and/or you're just holding it for investment and the farm activity keeps the real estate taxes down with some opportunity for tax writeoffs, or (2) You can get some cash out of it from a PDR program or something similar. A bona fide full time farmer with aspirations of expansion would most likely sell the expensive small acreage and move on to something bigger and better. On the other hand, if a full time farm is profitable without any need or desire to expand, then even they could continue to operate on the valuable real estate.