goverment payment

do you pay more rent for ground with a gov payment? or does it matter to you

First thing who gets the payment

A dumb thing to do is depend on the Gov to give a subsidy payment on crops, three years ago we got a whopper of a payment, but they waited till the last day of October to send it, made lots of people stupid depending on money from the Gov. Last year we only got an oat base payment and that wasn't much, lots of people were pizzed at them. I went into FSA in Feb for the sign up and the guy doing the paper work said everyone was coming in complaining about such a small or no payment. I said to him FSA paid out alot one year and none the next so it all evens out, and there is no sense in complaining about free money! He looked at me and said I wish I had more people like you! LOL

Free money? Hey look at my pay stub remember that when you pay federal taxes

"Windfalls" can make people really stupid, and it doesn't matter if it involves a government payment windfall, or unsustainably high commodity prices! I do not suggest that it makes all people stupid. I really struggle with those who got really crazy with the big prices on crops a few years ago, went out and jacked up cash rents to idiotically high levels, resulting in real estate changing hands. All was fine until the commodity prices went down, and the rents cannot be sustained. Prior to 2012, I saw a BTO and his equipment on the landscape just across the road from where I live, pulling a 16 row planter behind a wheeled tractor in the spring, a decent sized 4x4 performing tillage that spring and in the fall, and a big combine harvesting that fall. A year or two later, it was all new equipment including a track tractor and at least a 24 row planter, bigger 4x4, new combine, big grain cart, and a fairly new semi tractor and trailer with his name in big letters on the door. Don't know if the rest of the neighborhood is as impressed as he is. Just got wind of this BTO who filed bankruptcy. Word has it he filed bankruptcy under one legal entity and bought back the assets for pennies on the dollar through another entity. The bankruptcy appears to be correct, as I found the filings on a bankruptcy court website. The one who told me about it shared with me this tactic was used at least once before, accomplishing the exact same thing. He filed bankruptcy under one legal entity, and bought all the assets back under another entity.

I don't rent any land so I'm probably not a good judge.

The current govt program rewards insurance companies and bank loans, not really much for farmers. Imho.

The 'free money' payment has dwindled down to very little, which is fine with me. However, that part of the program was very haphazard, one county might get big payments for a year, while the neighboring county got nothing. I appreciate they tried to balance the payments to match poor crops and poor prices by location, but it really didn't seem to work out that way, turned out pretty unfair.

This is the last year of the current program, they are supposed to be hammering out a new farm program, of which 78% is free food for poor folk payments, and a few percent is for administration, and less than 20% goes to farmers - tho most of that really goes to insurance companies as crop insurance subsidies.

Many on here will be pretty upset about the 5-7% that actually does go to farmers, and that's fine. But if govt spending bothers you, remember if you take everything away from farmers, you still have 85-90% of the farm bill being spent and coming out of your paycheck, did you save very much and how much is your food bill going to increase?

I don't like some of the current direction of the farm bill, and if everyone all around would get some cut backs I'd be fine with eliminating most of it myself. As you know, farmers already lose 7-8% of the payments you think they get, while the food stamp side of it is still fully funded. Who else is getting cut back in govt program funding?

Anyhow, I'd do it different if I were emperor, but us little folk don't get asked, the farm program gets set up with bankers, insurance companies, and social services folk sitting at that table. Whatever screwy deal comes from it has little to do with actual farmers input.

It might offer 20-80 an acre (closer to the zero for most) plus some help with crop insurance payments, and can be pretty important to your banker if you have a big Ag loan. So like it or hate it, you probably have to play along with it unless you've stayed pretty small. Nothing wrong with that. Anyhow, you are at a disadvantage $$$ wise to others if you aren't playing along, so it probably hurts rental a little bit in most cases to have land that isn't in the program.

And yes, Traditional Farmer will be along soon to tell me how stupid I am, whatever. The rest of you can take or leave my comments however you like, just my view of it all.

Paul

But everybody wants cheap food the USA spends the least on food of any nation in the world.

Yea, McM Farms in northern MN/ND, Illinois Family Farms, Stamp farms in Michigan, Boersen Farms in Michigan..... and a lot of 'smaller' big farms all seem to be following that same example.

It's a shame.

Farming is sort of a gamble of spending so and so much money per acre, and hoping or planning on getting so and so many dollars back per acre. No one knows for sure.....

A person can spend more and hope something good happens and be a big gambler, and these days the bankruptcy laws can shield a lot of nonsense that is hurting the rest of a small rural community.

I can complain about it, but don't have a simple fix to it either that doesn't hurt more along the way.

Sure is disturbing tho. I'll plod along with my six row planter and open station tractor, and hope to harvest this fall with my 1980's combine, but it's disappointing to see the big get super big, and lose the community we used to have in Ag.

Paul

I've often wondered about that what are we really paying for food because we don't just pay at the grocery store we also pay through taxes with government subsidies

If you will allow me, Paul, I would like to build upon that. I had wanted to farm in the worst way going back to when I was a small kid. My father is the 4th generation on the family farm to make some sort of living from that farm. He was rather conservative in his spending. He went through some difficult times in his youth, which instilled this mindset. Other factors had been and remain at play to this day, but I am not going to delve into that. What I CAN offer, is having to watch select BTO neighbors, who have gone through two or three debt restructurings, come back bigger each time, and cannot manage to learn from prior mistakes made due to poor management and overly aggressiveness expansionistic tendencies. I had watched a couple in particular go out of their way to squeeze out a smaller operator by upping the cash rent paid to the landlord, go belly up, get a new lineup of machinery, a new pickup truck, and a new Cadillac, give it another 7 years or more, and see it happen all over again. I have had a few people ask me about renting a farm from them, and I know them quite well. They recognize I do a good job, and they realize my heart is better served on the farm as compared to working in town. More than once I have had the conversation about the land rent they are being paid. I have frankly said I cannot and will not bleed money, and if you can get that for your farm, who am I to begrudge you getting that sort of return on your land? I simply note that if they have a change of tenant become inevitable, I would be more than willing to talk about renting the farm, but not for what they are getting now. I have a 5 to 25 year old equipment lineup, with one final payment on a single piece of equipment. I can at least sleep nights. How these others I have cited, is beyond me!

I remember the 80s.

Probably didn't understand it for a decade or two after, but I remember. Everyone covered their rears and headed for the hills, banks were the worst, as they picked winners and losers. As they covered themselves, they called in the good loans so they got money, and wrote off the bad actors who circled right around and went right back into big gambles and big leveraged.

And I remember in ffa, being taught how to figure break even, and talking about 100 year and interest only loans. And wondering why anyone would want to just break even, what crazy things to learn.

In a complicated way, I wonder if insurance and renting stuff isn't the worst enemies of what was once farming and rural community. Now rent and insuring for catastrophic loss is not a bad thing of course, but the combination puts everyone so leveraged out, it becomes easy to walk away from a bad situation. I wonder if those things went too far for our own good.

And farming, like all things, are going to grow and expand and mature. So I'm not anti expansion either, I've added on to the farm twice myself. But pretty conservatively.

Enjoyed what you have to say.

Paul

my payments for years have always been under $15 an acre (for 100%) on the best payment yr. so it don't make much difference!

Now my pay check also! LOL