How do farmers make any money?

[rvds]

Why does it matter who owns the farm?

I saw a documentary once that explained how some of the subsidies worked. Some clever farms were incorporated and had many shareholders EACH of which was eligible for a cheque even if their stock was only worth a thousand dollars and the cheque was more than that.

 

[rvds]

Don’t be so negative. Especially when you don’t farm.

4. You use your own money, take your own risk, and get zero handouts and still do ok farming.

It’s not just your #1,2 & 3.

Some people DO know how to manage a profitable farming business without being given a dime. Ask me how. Been doing it a long time, too. Was given nothing.

I thought you said earlier that you did not pay rent for the land? I was offered 425$ per acre to rent two of my farms this year and as I do not net that much I am seriously considering it. It sounds like somebody is giving you some dimes?

 

[Elviscaretaker]

Good topic. Watching Clarkson's Farm is also great entertainment value here on our farm/ranch. I've been at it for only 4 years now after shuttering my companies during covid. Sold off my holdings, moved to another state and over paid for a run down neglected farm. But, I own it all free and clear including the new and old equipment I bought. We started off haying it after cleaning up the fields etc. Weeding was a very suck job since my wife doesn't want chemicals used and doesn't do the weeding herself One cost not needed). Keep in mind, I was a hood rat and had no clue about farming. After trial and error we still hay but now it's to support our cattle (second cost savings (?), not relying on others for it). Each head brings a Hefty price because of the breed. For now I sell limited but in 3 states. Direct sales is the only way this will pay for itself and I figured it would take 7-8 years to build our herd the way I want it, to produce some of the best beef in the US. Plus, I need the head count to be able to supply consistently) I do this all myself except for things only a vet should do (my vet also has a sense of humor and has taught me to preg check, pull calves but only kids so far, give shots and so on). I'm still bleeding $ but each year it has gotten less. Being able to fix a baler, tractor (new and older) swather, stack wagon ( thanking the Lord I learned about those!) etc will make this easier to sustain down the road. Will it make me rich? No, it'll cost me money that'll I'll only ever get back by selling this prime land/location I'm sitting on. But that's not the point for me. It's not a hobby, I don't (won't) take subsidies and my goal is simple.... I just want it to pay for itself (not cost me $) while producing a healthy meat that I can sell, not to just the wealthy (half my sales go to the tech industry) but the average person who normally thinks this breed is out of their financial reach. The rest of my animals are for personal use. By the way, horse are the equivalent of boats, just start throwing $$ at them. Do you need to be a little nutty to do this? Yes, but you can't be stupid. I use all of the things Ive learned over my long life to do this. Yet, I'd not change a damn thing either as I love the work and dealing with the animals vs the animals in the corporate world. Also, green doesn't always mean JD, think Duetz Farr. Great tractors but crappy tier4 so I electronically eliminated it, no, it won't cause any issues down the road doing it on one of these. Did I get off topic again? LOL Yes, you can make money at this, if you can survive the start up costs and/or were born into it. Again, I've been fortunate in my abilities in my life so I can eat the start up costs until this is self sustaining. But, I'm doing stuff that no city folk would ever dream of including myself 4 years ago. ALL of my animals are trained to be handled by me, I even picked up an "untrainable draft mix colt" that I've been able to train, not having a clue on what to do... I just started treating them all like I would my dogs as I trained them for what ever job I had them for and it worked out rather well. I also run a daily spreadsheet so I know exactly what, where and why on everything here and where it goes including daily health checks with notes.
Back to work, final check on the animals and to look for any predators. I do this every night. Thermal makes it easier

 

[rvds]

I’m not speaking for LHF2019, but it’s easy to have big (gross) profits and no money if your expenses were really high.
If I make 200K gross profits, but equipment payments, inputs, expenses (repairs, fuel, insurance, etc) were abnormally high, like $150,000, you could have little “money” left.

I do not understand this logic. Gros profit is normally gros sales minus input costs? After that net profit (taxable income) is what is left after all the other expenses are deducted. In my case I have never had to use any depreciation to reduce my net income to avoid income tax and indeed tractors purchased new in the 70s are worth more now than we paid for them.

 

[JasperFrank]

There are two classes of farmers. One just does a strategic crop like Soy, that have target prices all set up and a minimum buy level. If you can always be under that minimum buy level, you are good. On scale, these do very well. Everyone else has to always maintain or find a new market. Some just go to direct distribution as a subscription delivery service or get very specialized doing "exotic" things and contracting directly with many restaurants and vendors.

 

[LHF2019]

Correct me if I'm wrong but doesn't paying so little for milk still end up costing the consumers when dairy farmers that can't make it have to be subsidized.

So which would you prefer? Pay more in the store knowing it goes to the farmer or not see the costs every week but know it your taxes are attempting to help the farmer with programs? In a nut shell this is the simple explanation. But it is not that simple is it? There are greedy middle men just waiting to take. If it wasn't so difficult there would be more onsite sales farm to consumer options where you would know exactly who is getting your money. But again there are so many government hoops to jump through. I'm milking now for my personal use. I do it every year. It would be great if I could sell the access. Milk, cream, and butter. 100% raw.

 

[Dryland Farmer]

From a personal perspective I would rather just pay more for milk, simple because I don't consume much. From a farmers perspective I would almost think I would prefer to be able to make a living without assistance. I suppose if it didn't work you wouldn't be doing it.

 

[Hay Dude]

There are two classes of farmers. One just does a strategic crop like Soy, that have target prices all set up and a minimum buy level. If you can always be under that minimum buy level, you are good. On scale, these do very well. Everyone else has to always maintain or find a new market. Some just go to direct distribution as a subscription delivery service or get very specialized doing "exotic" things and contracting directly with many restaurants and vendors.

Just two, huh?
Got it.

 

[lman]

Another way farmers southwest of here are making money is growing solar panels. 20,000 acres in the last couple of years. You can't blame them at $1,000/acre it's hard to turn down that money. Who needs corn, soybeans or potatoes anyway. That's what was grown there previously.

 

[Snezzy]

Another way farmers southwest of here are making money is growing solar panels. 20,000 acres in the last couple of years. You can't blame them at $1,000/acre it's hard to turn down that money. Who needs corn, soybeans or potatoes anyway. That's what was grown there previously.

If grass or weeds grow under the panels you've got to mow. Or instead you could keep sheep to do the mowing. Science-fiction writer Philip K. Dick wrote "Do Androids Dream of Electric Sheep." Voila!