Market question

[jon f mn]

Crop markets are world markets, so prices are made on world crop supplies. Bickering over who will buy is a waste of time. If China buys from someone else, then who ever was going to buy those will have to buy from us. Since there are more beans than needed the prices will be low. Politics has little to do with crop prices, but market speculation does. If your upset about price blame speculators

 

[TheBartman47]

Crop markets are world markets, so prices are made on world crop supplies. Bickering over who will buy is a waste of time. If China buys from someone else, then who ever was going to buy those will have to buy from us. Since there are more beans than needed the prices will be low. Politics has little to do with crop prices, but market speculation does. If your upset about price blame speculators

Just like in the movie, "Trading Places", speculating on stock prices driving them up or down.

 

[moresmoke]

And folks this is also why we don't have the cow herd that was of old days. Where I travel for work, use to be heavy cow calf territory, feeders, the whole thing, now is hilly and flatter bean fields and corn.
The coffee shop talk of rent to the moon, well that might just catch up with these BTO s.
And the big four packers got their dead swan event to break the cattle market right here before the fall winter runs of sales, but next spring you just watch out, they'll be the same high prices again, not enough cows to fill the demand! But yet boxed beef price still went up after the announcements, go figure!

We're trying to do our part to feed the world!
GG Wes

Boxed beef will be somewhat disassociated from bringing in Argentine beef. For the high value cuts, the American consumer will not like grass finished imported beef as it is quite different than US grain finished beef. Not saying there is anything wrong with grass fed, it is just different than corn fed. Same as Canadian barley fed beef is different but to a higher power. So most of the import will be trim/ground headed to food service and not seen in grocery stores.

 

[NY 986]

How do you fix agriculture? Everything we do takes long term investment. Land, purchased or leased reaches out into the unpredictable Future. Our ability to produce is at the same time a curse and a blessing. Our problem is overproduction, but how do we decide who drops out and who stays in. When farmers sell their land to investors and lease it back it just seems upside down. It'll fry your brain if you dwell on it to long!

In terms of society people think in terms of short term gain versus long term stability. I tend to believe that long term we will be back to serfs and nobles in less than a couple of generations because nobody thought to safeguard the future.

 

[ss55]

How to fix agriculture? Drop all the Ag tax shelters so it can compete in the free markets again. Currently farmland and farming are fantastic tax shelters for outside investors, so farmland and farm inputs are severely over priced. Everyone wants to jump on the Ag Gravy Train.

Yes that could be a painful transition, but the average farmer is already sixty years old, there will be a lot of retirement sales in the next five to ten years regardless of the economy. Over production and loss of export markets will limit farm income for several years, if not the next decade.

Now might be a good time to downsize or cash out for a secure retirement.

 

[Fritz Maurer]

Ethanol too?

 

[GermantownGreen]

How to fix agriculture? Drop all the Ag tax shelters so it can compete in the free markets again. Currently farmland and farming are fantastic tax shelters for outside investors, so farmland and farm inputs are severely over priced. Everyone wants to jump on the Ag Gravy Train.

Yes that could be a painful transition, but the average farmer is already sixty years old, there will be a lot of retirement sales in the next five to ten years regardless of the economy. Over production and loss of export markets will limit farm income for several years, if not the next decade.

Now might be a good time to downsize or cash out for a secure retirement.

But, there is the sentiment, cash out! That's the exact reason there's a low cow herd, easier to sell out than try to build a legacy, by trying to mentor someone to help the next generation to get a strapping chance! GG Wes

 

[DanielW]

But, there is the sentiment, cash out! That's the exact reason there's a low cow herd, easier to sell out than try to build a legacy, by trying to mentor someone to help the next generation to get a strapping chance! GG Wes

+1 to what Germantown said - I couldn't agree more, and you've touched on a big peeve of mine. I don't know what happened to recent generations that so many are not only willing, but eager to cash out. I totally understand the logic: On our farms we work harder, longer, with far more risk/uncertainty and for far, far less average income than pretty much everyone else. And when you get to a certain point in your farming life, I can understand the appeal to cash out and get a nice lump sum for a really cozy retirement. But whenever I hear this argument I feel like responding, "You know who also worked harder, longer, with lots of risk and for far less income than anyone else? Every other generation who owned your farm before you. And you know who didn't take the easy option and just cash out for the highest dollar? Every other generation who owned your farm before you". This isn't exactly the first (not fiftieth) time there's been some market uncertainty. I understand there are many, many cases where this is unavoidable due to other factors. But there's certainly no shortage folks who just want the quick dollar and cozy retirement, and couldn't care less about land husbandry nor legacy.

It wouldn't bug me so much if folks were selling out at a price that would allow other farmers to take over. But that never happens (not around here, anyway). It's always, 'sell for the max price, divide the farm into building lots, let a subdivision get planted on it', etc. Which I also understand: If selling out, you'd want to get max price. But those same folks will complain, 'There are no younger farmers wanting to take over'. That argument really bugs me. Once again, whenever I hear this argument I feel like telling them: "If the average per-acre price is 10X what it would have been 30 years ago, but the average farm income is only 2X what it was 30 years ago, of course no younger farmers are going to want to take over. They'd still be paying down the mortgage even if they lived to 200.

 

[Fritz Maurer]

+1 to what Germantown said - I couldn't agree more, and you've touched on a big peeve of mine. I don't know what happened to recent generations that so many are not only willing, but eager to cash out. I totally understand the logic: On our farms we work harder, longer, with far more risk/uncertainty and for far, far less average income than pretty much everyone else. And when you get to a certain point in your farming life, I can understand the appeal to cash out and get a nice lump sum for a really cozy retirement. But whenever I hear this argument I feel like responding, "You know who also worked harder, longer, with lots of risk and for far less income than anyone else? Every other generation who owned your farm before you. And you know who didn't take the easy option and just cash out for the highest dollar? Every other generation who owned your farm before you". This isn't exactly the first (not fiftieth) time there's been some market uncertainty. I understand there are many, many cases where this is unavoidable due to other factors. But there's certainly no shortage folks who just want the quick dollar and cozy retirement, and couldn't care less about land husbandry nor legacy.

It wouldn't bug me so much if folks were selling out at a price that would allow other farmers to take over. But that never happens (not around here, anyway). It's always, 'sell for the max price, divide the farm into building lots, let a subdivision get planted on it', etc. Which I also understand: If selling out, you'd want to get max price. But those same folks will complain, 'There are no younger farmers wanting to take over'. That argument really bugs me. Once again, whenever I hear this argument I feel like telling them: "If the average per-acre price is 10X what it would have been 30 years ago, but the average farm income is only 2X what it was 30 years ago, of course no younger farmers are going to want to take over. They'd still be paying down the mortgage even if they lived to 200.

You can't lay it all at the next generation's door.... have to take into account local government.... taxes, mainly..... in Cuyahoga county Ohio, one must pay residential taxes, which are staggering, the land has to be farmed THREE YEARS before you are eligible to apply for CAUV. This was a piece of land that was already a farm surrounded by residential homes. We cleared it a restarted the farm but without a day job it would have been impossible to justify this investment. After a farm lays fallow and changes hands, the county changes back to residential taxes.

Then, we have the inheritance tax, which requires much legal whitewashing to get that to a manageable level. Ever get a farm appraised by a private individual..... then the county comes in with "their" appraiser? The county appraised it 100K higher. Why? What is the point of getting a license ( from the county ) to be an appraiser if your appraisal is meaningless? I appealed, and got back 80K in 2017. In 2025, the county got almost all of it back.

Sure, generations before worked dawn til dusk to keep the farm that is now in the descendants hands, but they had only a fraction of the crooked government we have today. Furthermore, I wouldn't want my descendants to kill themselves over an idea or sentimentality just to keep a piece of land in the family, when we all have to give it back sooner or later anyway. If there's money out there in a mobile home park, I say go get it.

 

[NY 986]

+1 to what Germantown said - I couldn't agree more, and you've touched on a big peeve of mine. I don't know what happened to recent generations that so many are not only willing, but eager to cash out. I totally understand the logic: On our farms we work harder, longer, with far more risk/uncertainty and for far, far less average income than pretty much everyone else. And when you get to a certain point in your farming life, I can understand the appeal to cash out and get a nice lump sum for a really cozy retirement. But whenever I hear this argument I feel like responding, "You know who also worked harder, longer, with lots of risk and for far less income than anyone else? Every other generation who owned your farm before you. And you know who didn't take the easy option and just cash out for the highest dollar? Every other generation who owned your farm before you". This isn't exactly the first (not fiftieth) time there's been some market uncertainty. I understand there are many, many cases where this is unavoidable due to other factors. But there's certainly no shortage folks who just want the quick dollar and cozy retirement, and couldn't care less about land husbandry nor legacy.

It wouldn't bug me so much if folks were selling out at a price that would allow other farmers to take over. But that never happens (not around here, anyway). It's always, 'sell for the max price, divide the farm into building lots, let a subdivision get planted on it', etc. Which I also understand: If selling out, you'd want to get max price. But those same folks will complain, 'There are no younger farmers wanting to take over'. That argument really bugs me. Once again, whenever I hear this argument I feel like telling them: "If the average per-acre price is 10X what it would have been 30 years ago, but the average farm income is only 2X what it was 30 years ago, of course no younger farmers are going to want to take over. They'd still be paying down the mortgage even if they lived to 200.

Two sides to this. If a fair number of grandpa's to today's farmers worried about capturing as much cash as possible a fair number including people who hang out here would have had a life of chasing a broom down at the local high school or local grocery store. At the same time people are living longer today and it costs more to live off of the farm so to speak. A couple of small houses which were anything but fancy in my neighborhood recently sold for 200,000 and 290,000 dollars respectively. A Toyota Corolla is 30,000 dollars after taxes and used inventories the past few years have been extremely skimpy. If you are 65 and your health is too poor to work at most things but yet expect to live another 20 years you need to buy food, heat, and pay the taxes to name a few expenses. Greed versus necessity.

 

[rrlund]

This whole thing about the average age being 60 is hogwash. Thirty years ago the average age was 59. I'm a farmer and I've aged more than a year over the last thirty. How did that happen? Manipulating statistics is how people prove anything that they have a bias for or against. Just more "create a crisis, say you fixed it, create the next crisis".

 

[NY 986]

This whole thing about the average age being 60 is hogwash. Thirty years ago the average age was 59. I'm a farmer and I've aged more than a year over the last thirty. How did that happen? Manipulating statistics is how people prove anything that they have a bias for or against. Just more "create a crisis, say you fixed it, create the next crisis".

I also question how information such as an average age of a farmer comes to be. Not saying that 60 is not the average age as from what I see of the Mennonites but who is coming up with this information as the Mennonites usually do not report information to the government?

 

[TheBartman47]

You can't lay it all at the next generation's door.... have to take into account local government.... taxes, mainly..... in Cuyahoga county Ohio, one must pay residential taxes, which are staggering, the land has to be farmed THREE YEARS before you are eligible to apply for CAUV. This was a piece of land that was already a farm surrounded by residential homes. We cleared it a restarted the farm but without a day job it would have been impossible to justify this investment. After a farm lays fallow and changes hands, the county changes back to residential taxes.

Then, we have the inheritance tax, which requires much legal whitewashing to get that to a manageable level. Ever get a farm appraised by a private individual..... then the county comes in with "their" appraiser? The county appraised it 100K higher. Why? What is the point of getting a license ( from the county ) to be an appraiser if your appraisal is meaningless? I appealed, and got back 80K in 2017. In 2025, the county got almost all of it back.

Sure, generations before worked dawn til dusk to keep the farm that is now in the descendants hands, but they had only a fraction of the crooked government we have today. Furthermore, I wouldn't want my descendants to kill themselves over an idea or sentimentality just to keep a piece of land in the family, when we all have to give it back sooner or later anyway. If there's money out there in a mobile home park, I say go get it.

In Texas, I believe it's 5 years of farming before you can apply for "Ag Exemption" status on the land for tax assessment purposes, and has to be a minimum of 11 acres for most things, or at least 5 acres if you are a bee keeper. However, if you buy a property already currently in Ag Exempt status, it carries over and you can be Ag Exempt from the start.

There are ways to deal with "Inheritance Tax"... if your family farm is placed in a 575e Foundation Trust, then that shields you from inheritance tax as well as other tax benefits.

Getting help with reducing your property tax and appraised value can also be much more effective than appealing on your own. I recommend Ownwell (dot com) for this. Their fee is only 25% of your tax savings, and you owe nothing if they can't reduce your tax.

 

[Fritz Maurer]

In Texas, I believe it's 5 years of farming before you can apply for "Ag Exemption" status on the land for tax assessment purposes, and has to be a minimum of 11 acres for most things, or at least 5 acres if you are a bee keeper. However, if you buy a property already currently in Ag Exempt status, it carries over and you can be Ag Exempt from the start.

There are ways to deal with "Inheritance Tax"... if your family farm is placed in a 575e Foundation Trust, then that shields you from inheritance tax as well as other tax benefits.

Getting help with reducing your property tax and appraised value can also be much more effective than appealing on your own. I recommend Ownwell (dot com) for this. Their fee is only 25% of your tax savings, and you owe nothing if they can't reduce your tax.

So land tax can be contested at any time, not just at time of sale?

 

[TheBartman47]

So land tax can be contested at any time, not just at time of sale?

Every year, property tax assessment time.

 

[Fritz Maurer]

Every year, property tax assessment time.

Thank you I did not know that.

 

[rrlund]

Thank you I did not know that.

What state are you in? Don't you have Board of Review? We have it every March here in Michigan. I've been on it for thirty years. Come in and make a case for why your valuation or classification should be changed.

 

[Fritz Maurer]

The board of review... that's the place I went to, couldn't think of the title.

I had appraisal paperwork that time, my appraisal and the county's was 100K apart so i figured i had a case.

So i get an appraisal at assessment time and go back?

I am in Lorain County Ohio.

 

[rrlund]

With 100k difference, something sounds sketchy. Did you talk to the assessor or just to the board? I'd for sure be sitting down with the assessor and comparing everything on the appraisal with everything on the assessment role. Sounds like the assessor has something on that property that isn't there.

I can't tell you how things are done in Ohio, I can only tell you how they work in Michigan. Here, every assessor in every township or city in the entire state use the same computer program. It takes all of the opinion out of it. They take all of the information and enter it in the computer. That gives what's called State Equalized Valuation. It's equal statewide. The computer adjusts for what's called Economic Condition Factor, or ECF, so a home or building in some remote area in the middle of nowhere won't have the same actual value as it would in the most affluent neighborhood in the state, but the beginning value would be the same before the ECF is factored in.

Now, with an appraisal, yes it's facts, but then it's human opinion that comes up with the final numbers. You could have 50 different appraisers do an appraisal on a parcel and come up with 50 different values. We're told not to use a bank appraisal. They tell us that those will always be at least 10% low to protect the bank from loss in case they have the cost of repossessing. They even say right in the first few pages that the appraisal is for the bank only and not to be used for anything else. I don't remember how they're worded exactly, but that's the meaning of it.

If you talk to the assessor and all of the details are correct, and it's only the values that are different, then I'd say, at least here in Michigan with the computer program we use, the difference is appraisers opinion vs State Equalized Value, but here anyway, if Board Of Review and he assessor disagree with your appraisal, and he board denies you, you can appeal to the State Tax Tribunal, which is run by the State Tax Commission.

 

[Fritz Maurer]

With 100k difference, something sounds sketchy. Did you talk to the assessor or just to the board? I'd for sure be sitting down with the assessor and comparing everything on the appraisal with everything on the assessment role. Sounds like the assessor has something on that property that isn't there.

I can't tell you how things are done in Ohio, I can only tell you how they work in Michigan. Here, every assessor in every township or city in the entire state use the same computer program. It takes all of the opinion out of it. They take all of the information and enter it in the computer. That gives what's called State Equalized Valuation. It's equal statewide. The computer adjusts for what's called Economic Condition Factor, or ECF, so a home or building in some remote area in the middle of nowhere won't have the same actual value as it would in the most affluent neighborhood in the state, but the beginning value would be the same before the ECF is factored in.

Now, with an appraisal, yes it's facts, but then it's human opinion that comes up with the final numbers. You could have 50 different appraisers do an appraisal on a parcel and come up with 50 different values. We're told not to use a bank appraisal. They tell us that those will always be at least 10% low to protect the bank from loss in case they have the cost of repossessing. They even say right in the first few pages that the appraisal is for the bank only and not to be used for anything else. I don't remember how they're worded exactly, but that's the meaning of it.

If you talk to the assessor and all of the details are correct, and it's only the values that are different, then I'd say, at least here in Michigan with the computer program we use, the difference is appraisers opinion vs State Equalized Value, but here anyway, if Board Of Review and he assessor disagree with your appraisal, and he board denies you, you can appeal to the State Tax Tribunal, which is run by the State Tax Commission.

Noted and thank you for the information. Just to be clear, they did modify it back in'17 and gave back 50K. But at this point it's almost back to where they started.