How do farmers make any money?

[ultrarunner]

I still have several cousins that are Dairy farmers but most no longer farm as the effort outweighed the reward and the tipping point for many is when the kids don’t want to farm… so what’s the point…

My grandparents were one of 4 farms at a fork in the road… only one still farms and has become bigger picking up land to farm from the neighbors.

Another now runs a horse operation for city folks…

The farms still active mostly run Fendt tractors.

 

[Hay Dude]

I still have several cousins that are Dairy farmers but most no longer farm as the effort outweighed the reward and the tipping point for many is when the kids don’t want to farm… so what’s the point…

My grandparents were one of 4 farms at a fork in the road… only one still farms and has become bigger picking up land to farm from the neighbors.

Another now runs a horse operation for city folks…

The farms still active mostly run Fendt tractors.

I’m trying to convince my son he can teach and still take over my business. He is understandably doubtful. I have a friend who is a teacher and farms as much hay as I do. He has 2 employees and lots of mowing contracts. I think my son could double his income doing the same as my friend. His future wife is tough young lady and she could help.

I’d hate to give up all I have. Once you retire/quit, you seldom can get any of it back.

 

[ultrarunner]

Not one of the family Dairy farms that stopped has come back… the equipment gets sold after the livestock and very importantly the membership in the Dairy Co-Op is gone.

Mom and her siblings grew up in the Depression and they didn’t have much but they never went hungry and everyone had a job… kids to seniors all contributed…

Always remember how self sufficient they were… even had a small hydro in the creek for DC power… enough for a few lights and Great Aunts radio…

 

[Jstpssng]

I’m trying to convince my son he can teach and still take over my business. He is understandably doubtful. I have a friend who is a teacher and farms as much hay as I do. He has 2 employees and lots of mowing contracts. I think my son could double his income doing the same as my friend. His future wife is tough young lady and she could help.

I’d hate to give up all I have. Once you retire/quit, you seldom can get any of it back.

There is a retired teacher up here who owns hundreds of acres of farmland. He slowly bought it up when he was teaching, raising potatoes and hay in summer. He is now leasing out the fields, while slowly and strategically selling it off to avoid a big tax burden.

 

[RayIN]

For anyone wanting a long-term investment, land is reliably profitable. There will never be more land, but the population of humans grows at an ever-increasing rate.

 

[ultrarunner]

For anyone wanting a long-term investment, land is reliably profitable. There will never be more land, but the population of humans grows at an ever-increasing rate.

Yes and no…

Sometimes land is just land as seen by abandoned towns dotting the West and my visit to Detroit was certainly eye opening… 1.8 million peak and now 600 thousand in rough numbers.

 

[Flogger]

Had a chance to talk with a manager at a multiple location tractor franchise and he said at harvest time a lot of the new equipment you see is leased short term…

It gets the equipment out the door, has full warranty, presents certain tax advantages and dealer is able to sell harvest returns at a discount with factory warranty and service history…

Before, it never occurred to me farmers would lease short term and I had thought they own with a payment book.

My generation started the trend of going to college to continue farming. I wasn’t part of that trend but I educated myself about finances and have seen an amazing change over the last 40 years. Today’s young farmers are very aware of finance and opportunities. In the world I grew up in my grandfather considered being a good neighbor to be of more importance than growing the farm. There are definite trade offs.

 

[California]

Just when you think you'll have a good year, the rug gets pulled.

This lady was oblivious to the changes around her. Now she's frantic.

"Her farm had been awarded a grant worth $400,000 through the U.S. Department of Agriculture​

​

"Carlson was planning to use her USDA grant money to hire 10 temporary workers from Guatemala to help with this year’s harvest. The grant would help pay to house the required workers on her property and the visa fees and airfare to fly the workers to and from the U.S."​

 

[Eagle1]

I can not believe our government would give away 400000 to fix private housing structures....or that an actual farmer would have the time to produce such a grant application.
400k is a pretty penny for 10 temp worker for a 4-6 weeks stint. She has spend 200K before having a single temp worker or costs to transport.

Seems like a scam to get free government money to me.

 

[Hay Dude]

I can not believe our government would give away 400000 to fix private housing structures....or that an actual farmer would have the time to produce such a grant application.
400k is a pretty penny for 10 temp worker for a 4-6 weeks stint. She has spend 200K before having a single temp worker or costs to transport.

Seems like a scam to get free government money to me.

 

[quicksandfarmer]

I can not believe our government would give away 400000 to fix private housing structures....or that an actual farmer would have the time to produce such a grant application.
400k is a pretty penny for 10 temp worker for a 4-6 weeks stint. She has spend 200K before having a single temp worker or costs to transport.

Seems like a scam to get free government money to me.

I know that where I am nothing gets built without a grant from the federal government. New pavement? Grant from Department of Transportation. New roof for the school? Grant from Department of Education. New firehouse? Grant from Homeland Security. New police station? Grant from the Justice Department. And if a farmer puts up fencing, a greenhouse, an irrigation system, or drills a well, that's a USDA grant.

They try to conceal it so you have to be paying attention to see it. But if you know where to look it's everywhere.

 

[RayIN]

I know that where I am nothing gets built without a grant from the federal government. New pavement? Grant from Department of Transportation. New roof for the school? Grant from Department of Education. New firehouse? Grant from Homeland Security. New police station? Grant from the Justice Department. And if a farmer puts up fencing, a greenhouse, an irrigation system, or drills a well, that's a USDA grant.

They try to conceal it so you have to be paying attention to see it. But if you know where to look it's everywhere.

Your description makes i sound like that area cannot survive without outside taxpayer support.
Farmers are normally very independent and adverse to handouts; at least in my area.

 

[Jstpssng]

About 10 years ago I took a class offered by the Cooperative Extension about starting a small farming business. It ran about 6 weeks. I got a good book on it but classes ended up being mostly training on how to access government programs.
I didn't bother attending the last session.

 

[quicksandfarmer]

Your description makes i sound like that area cannot survive without outside taxpayer support.
Farmers are normally very independent and adverse to handouts; at least in my area.

Are you sure about that?

The way these grants are structured you have to really know about local politics to even know they exist.

 

[RayIN]

Are you sure about that?

The way these grants are structured you have to really know about local politics to even know they exist.

Yep, I'm sure about how your description sounds.

 

[ericm979]

Are you sure about that?

The way these grants are structured you have to really know about local politics to even know they exist.

That's true in many cases. Also the support from the government has been going on for so long that people forget it's from the government. It just becomes how things work.

For example government price supports for commodity crops. That's a huge part of the federal agriculture bill every year. They have been going on since the 1930s. Price supports include paying farmers to not grow crops, crop insurance that guarantees minimum prices, and the government buying crops to store or to send as aid to poor people and other countries, which props the price up.

Farmers get very different and beneficial tax rules than people with a regular income or small business get.

Having bought a farm and doing the research I am now seeing more of the smaller stuff that happens at a local level. In Oregon farms pay significantly less in property taxes. I wish they called this out on the property tax bill but for whatever reason they hide it. In many states farmers don't pay sales tax on farm stuff. Most farms in our area get irrigation from the irrigation district. There are charges for it but they pay for only a small part of the cost of the system. The rest is federal grants. They don't talk about that either.

There are local conservation districts who can advise you on how to run your farm and rent equipment at very cheap rates.The state university system has research sites and researchers who find better ways to grow crops, all paid for by the government. There are more I know about and I'm sure there are many I don't.

Farming is the most socialistic enterprise in the US.

Of course a lot of those programs are good for society as a whole and not just farmers.

 

[quicksandfarmer]

Yep, I'm sure about how your description sounds.

Almost all of rural America would be uninhabitable without aid from the federal government.

Look up your state here and see what percent of births are paid for by Medicaid:

Births Financed by Medicaid by Metropolitan Status | KFF State Health Facts

State level data on Births Financed by Medicaid by Metropolitan Status from KFF, the leading health policy organization in the U.S.

www.kff.org

Look up your county here and see what percent of personal income is transfer payments from the federal government:

The Contributions of Government Transfer Payments to Personal Income - farmdoc daily

Mark White - Mark White - Contributions to personal income vary widely. Many working-age Americans rely heavily on the income earned from wage and salary jobs. Other Americans — particularly many older Americans — rely more on government transfer payments. This farmdoc daily article shows how...

farmdocdaily.illinois.edu

Look up your state here and see how much of state and local budgets come from federal aid:

Which states rely the most on federal aid? | USAFacts

A fifth of state and local government revenues come from federal funding.

usafacts.org

 

[Eagle1]

Almost all of rural America would be uninhabitable without aid from the federal government.

Look up your state here and see what percent of births are paid for by Medicaid:

Births Financed by Medicaid by Metropolitan Status | KFF State Health Facts

State level data on Births Financed by Medicaid by Metropolitan Status from KFF, the leading health policy organization in the U.S.

www.kff.org

Look up your county here and see what percent of personal income is transfer payments from the federal government:

The Contributions of Government Transfer Payments to Personal Income - farmdoc daily

Mark White - Mark White - Contributions to personal income vary widely. Many working-age Americans rely heavily on the income earned from wage and salary jobs. Other Americans — particularly many older Americans — rely more on government transfer payments. This farmdoc daily article shows how...

farmdocdaily.illinois.edu

Look up your state here and see how much of state and local budgets come from federal aid:

Which states rely the most on federal aid? | USAFacts

A fifth of state and local government revenues come from federal funding.

usafacts.org

Guess I have it all wrong, ran my campground and farm without help until I retired. Still running the farm but the only government funds was a 2500 ppp loan during covid .
No tax breaks, got charged extra for being a business. Nothing tax free just extra fees and inspections because we were a business. Now it's just a hobby farm with my critters feeding us.

Most "farmers" here have full time jobs to be afford having the farm.

 

[Mtsoxfan]

So, the federal government has an income tax, so they can control who gets the money instead of states. Has the opportunity to allow corruption into the fold...

 

[Jstpssng]

So, the federal government has an income tax, so they can control who gets the money instead of states. Has the opportunity to allow corruption into the fold...

A lot of it, such as the farm programs started out as something good but outlived it's usefulness. The problem is that once a program is started it doesn't end.