Foreclosure update

I wrote in this blog entry about a townhouse that I purchased at a recent tax auction.  Here's the followup: 

The banks holding the mortgage took a $210k loss
The first thing that I was surprised at was that the two banks that held a combined first and second mortgage of $210k mortgage on the property didn't redeem the property for the $14k in back taxes due.  If they had, they could have foreclosed on it, and sold it, and come out with maybe $130-140k.  I expected the property to go off the auction, but the lender didn't redeem it.  when you buy a property at tax auction,  tax liens are senior to all others, and so the first and second mortgages on this property got erased.  Sorry Citibank, who apparently held the 1st mortgage, and 1st choice mortgage, who held the 2nd. 

Why didn't the bank redeem the property for the back taxes?
So I wondered why the bank didn't redeem it.  This story helped explain it.   Summary:   the company that funded the mortgage is in bankruptcy, and various people are being sued, and none of them are cooperating with each other.  This property fell through the cracks, and the banks take a big loss.  I'm guessing that citibank bought the assets of the smaller bank. 

Why didn't the previous owner just make the payments?
I asked the previous owner why he didn't pay his mortgage.  I expected something along the lines of I lost my job, or there was a medical emergency or what have you.  the answer was simpler:  They just decided to stop paying.  "We had a first and a second on this property, for a total of about 210k.  This property is worth $180k.  If we paid the back taxes of $14k, we'd be in the hole $44k, and given the market, it would take us 10 years go get back to even, so we decided to let it go." 

What was the previous owners plan? 
My opinion is that I think they were counting on the house going through foreclosure and that it would take 6 months or a year -- the tax auction happened about 2 months after they stopped making the mortgage payment, but they hadn't paid their property taxes in years already.  No idea why they didn't pay those taxes.  Or the bank didn't pay those taxes.

Sustainable: How many acres to produce 38 pigs every 4 months?

One of the biggest arguments I've had with other pig farmers, particularly those that want to claim the "pastured pork" term, is how much of their feed actually comes from their land, and how much they truck in. 

To be clear;  I see nothing wrong with feeding pigs, and with bringing that feed in.  I personally feed between 6 and 10 tons a week of produce to my pigs; that would otherwise go to the landfill; my pigs are a much better use of this good food than compost.  But I digress. 

I just ran across a blog entry where a farmer who's producing 38 hogs a quarter did the math on how much land, and what sorts of crops, they'd have to plant to make that work.  So if you're interested, you'll find that blog entry here.

But I'll cut to the chase:  To produce 38 pigs every 4 months he has to plant, cultivate, harvest and maintain 61 acres of fields.  Some are pasture, some are crops.  He goes into details about when he'd plant, and with what.    That's fertile, prime farmland. 

So to say that you can take 70 acres of marginally fertile mountain land, haphazardly seed it with random stuff and produce hundreds of pigs, and have each of those pigs get "90%" of their diet from that land...  uh huh.    It's a nice fantasy, a great marketing point.    But when you get out the pencil, it just doesn't stand up. 

My stance on antibiotics - changing.

I've been wrestling with antibiotic use on farms, both in the industry and on my own farm.  It has been common practice in industry to use constant, low doses of antibiotics to increase the weight gain of pigs. 

In my own farm I've been reluctant to use antibiotics for any reason.  Some of that is because I've been a bit skeptical about our ability (as a society) to determine which drugs are harmless.  From my layman's point of view it seems that every year there's a different drug that was thought to be beneficial but turns out to be harmful, sometimes in unintended ways.  Thalidomide, anyone? 

So the vast majority of my animals don't see drugs of any sort.  I don't feed medicated feed.  I do vaccinate the animals against common diseases -- my farm is in a major flightway for wild waterbirds and it's surrounded by essentially wild land, so I vaccinate the livestock and farm dogs and myself as a precaution, but I've resisted the use of antibiotics as much as I can. 

The problem is the little guy that is in the picture, above.

I'm going to guess that this would started as a small cut or puncture, maybe from a litter mate; a squabble over a nipple, for instance.  It progressed into an abscess, that broke and drained, but in doing so removed quite a bit of the piglets cheek.  Yes, it may heal up fine without any intervention.  In fact, the reason that this piglet is on my knee being photographed is that I've got it at the house, and am bottle feeding it and another little pig that had a different issue. 

Click on image for larger version. 

In this case the piglets eye is ok, but currently has scabs that are holding it mostly shut.  The wound is relatively clean, and is healing.  and here's where I'm going to treat this little piglet.  She's getting a shot of penicillin every day per a vets recommendation, and we'll continue that course until she's better. 

No antibiotic use of any sort means that you'll watch animals that could otherwise be saved, die, or you'll be putting animals down that could have been saved. 

So what will I do with this little girl?  Other than the face wound, she's in good weight and appears healthy.  I'm going to notch her ear to show that she's had antibiotics -- to differentiate her from the pigs that have never been treated -- and evaluate her when she's a little bigger and healed as to what I'll do.

I think that a middle ground -- medicating to save lives -- is the tact I'm going to take.  I just don't have the heart to watch and do nothing. 

"grass fed, grain finished"

Reading an article about the food scene in Portland, oregon, and this phrase caught my eye: 

"Most of the beef is grass-fed and grain-finished. " (6th paragraph down from "Beef heaven at laurelhurst market")

They're offering this beef as if it's something special -- unique.  But that's pretty much the definition of what a feedlot fed cow is.  It's fed on grass when born, and up to some weight, like 600 pounds.  then sold and shipped to a feedlot where it's fed grain for 3-6 months, and then slaughtered.    So this beef, in my opinion, is the same as that you'd get in any retail meat establishment.  If they're trying for something special, grass-finished would be different -- but there's a problem. 

I've been eating a steer that I raised on grass and finished on grass, and it's a different beast than I've had in the past.  Lean is the word I'd use to describe it.  The meat is good, tasty, but the amount of fat on this animal doesn't compare with that found on feedlot beef.  In fact, it's been a wake up call for me because it's so different.  I've changed my cooking habits to accommodate this -- braising the beef, for instance, instead of roasting.  Or serving rare.  Similar to what I'd do with venison, which is typically very lean as well.

Understand that I'm a fan of grass fed beef.  Truly I am.  I like the idea of a cow converting grass into meat, and I feed tons of grass to my cows, but as a typical consumer I've been trained to like the taste and texture of grain-fed beef.  I like a rim of fat around my tbone.  I like (and miss) intramuscular marbling.  Our whole meat grading system is oriented around grain-feeding beef -- most grass-finished beef would not rate high; I don't think you could get a prime rating from a grass fed animal. 

I'll even confess:  I'm tempted to grain-finish my next steer.   

Farmland prices soar

I think that there's a lot of money sloshing around the globe right now.  Bond rates suck -- at less than 1%, it's almost the same as stuffing the cash under your mattress.  Houses/mortgages, a traditionally safe bet, are considered toxic.  Commercial real estate loans, the same. 

But people like the idea of owning tangible assets, and farmland has long been seen as a stable investment.  People have to eat, right?   

"We're starting to see more interest in farmland purchases by nonfarm investors," Henderson said. "It's more attractive than other kinds of fixed income investments, CDs, stock market investments. It looks like an attractive rate of return for some investors."

The price of farmland is rising steeply in the midwest; in an era of declining real estate values, it's up more than 10%;  and the rise isn't limited to the USA -- in various countries in Africa there's been an increase in foreign ownership of land.

This is partially driven by the cost of grain; Russia had their grain crop fail last year, and prohibited exports.  Wheat, corn and soybeans are all used for animal feeds; when one of them goes up in price, others will rise as well, as people feeding animals seek the lowest cost feed solution. 

What does this mean?  Speculation never leads to price stability.  I'm guessing that we're going to see higher prices for food in the near term, and some sort of bust cycle, as is usual with speculation, in a few years. 

What's interesting about this is that cropland prices haven't really changed in western Washington.  That's because there's so few people farming there's virtually no demand.  Farmland in Iowa is selling for $7k an acre.  You can get a good, fertile acre of ground here for around $3k. 

Cheese and manure and regulation and choice

Sally Jackson Cheese is a small producer of "artisan" cheeses that recently announced that they were going out of business after 30 years of cheese production.   If you were to read the news stories, you'd find statements about unsanitary conditions and a recall, but if you read a bit more, you'll find that Sally Jackson had been ordered to replace her cheese making facility, and the double-blow of both a recall and the anticipated expense of rebuilding were too much of a hurdle to cross. 

In the news article, Sally cited her taxable income of $12,000 a year, which compares with an average wage in okanogan county of $34,000.   Her cheese was sold in whole foods and at a variety of high-end outlets, and by all accounts was appreciated by her customers at prices around $30/lb.

 Sally Jackson sold cheese in 17 states. , which would lead you to believe that she had a large company, but three cows, a herd of sheep and a herd of goats was her source for the dairy.  For the type of cheese she produced -- raw milk cheeses -- the market is fairly small.

"dw, december 18th, 2010 at 15:24:  Sally Jackson makes an exquisite, traditional style cheese with a flavor that is just outstanding. I suspect it will turn out that these fears about her cheese in particular are unfounded. Unfortunately her operation is small and I'm worried that this kind of PR could be very hard on her farm and on our neighbors who work with her."


A raw, artisan cheese.  Great flavor.  A producer that probably has a name for each of their animals.  8 people sick, some of which ate her product, some that can't remember.  And no more of this product. 

2010 airedale puppies for sale

Litter of 9 Airedale puppies, born November 6th.  There are 4 girls and 5 males. 

each of these pictures is of a different puppy, and we have more pictures on request.  We do ship dogs, and can ship them in time for the holidays if you wish, but you'll have to make a decision soon.  Shipping costs are the actual shipping costs + $70 for health exam + $25.   these puppies are young enough not to require health exams. 

#1, Female pup, one of the larger in the litter, social and friendly.  $550

#2, Male pup, $425

#3, male pup, $425

#4, female pup, $500

#6, male pup, smaller than most of the litter, $400

#7,  male pup, smallest of the male puppies, $400

#8 Female pup, medium sized of this litter, $500

#9 larger female pup, $550

#10:  This is a larger pup, 4 months old, returned to me by a family that moved after they received their pup.  Rehoming fee of $200. 

All pups are guaranteed healthy.  Parents have been screened for hip dysplasia and are clear.  This is a young, friendly male dog. 

Bedding pigs -- what I do

The climate that I farm is is perpetually damp, and pretty cool to cold.  We don't get the sort of dry cold that you get in the midwest or in the north, or even in Eastern Washington; our cold is about 40 degrees and moist.  In the summer it dries up a little, but in the winter its cool and it rains pretty often. 

I struggled for a few years with trying to keep dry bedding in the pigs areas, but between the damp pigs and the rain, it'd last a day or two, and then be damp.  The picture above was really my eureka moment; well, not really.  Deep bedding is the concept. I just do it in small scale. 
The little pigs showed me the way.  Here's a bunch of weaners that found the warm, just-cut chips, and they're glued to it.  Weaner pigs love warmth.  So What I do is use a couple of feet of new chips under each shelter to provide them with it. 

Composting only happens at temperatures above about 45, but when a bunch of pigs lay on compost, it gets warmed up, and starts to generate its own heat.  Pretty soon, if it's thick enough, it'll maintain a comfortable temperature of around 120 degrees F for two weeks or so, as the microbes break down the sugars in the newly cut tree.  To get the most warmth out of the chips I usually use them immediately after they're cut.  I get 9 to 10 truckloads of chips each week, so I have a pretty good choice at any time.   I'll put down two tractor scoops of chips, and then put a shelter down on top of it. 

With the pile of chips, I'll roll over one of my calf domes and put it right on top of the chips. 

The final touch is to put another scoop of chips on top of the shelter.  the chips fall off the top, and it helps "glue" the shelter down.  The pigs will tend to try to get their noses under it and flip the shelters over.  The third scoop on top prevents that.  It may provide some additional insulation, but the weight and coverage of the edge is what I'm really after.  . 

All done.  Cozy, warm, ready for occupancy.

Going up, part 2

Spent the day putting up the form boards for the sidewalls of the barn.  each board is varying length and 2' wide.  The cleats are attached to metal rods that go through the form.  these cleats aren't tightened; we're still adjusting the forms and bracing them.  You tighten them by pounding them down; the 'ramp' of the form will cause it to draw tight. 

 We'll use a concrete pump truck to put the concrete into the top of the forms.  The sidewalls will be about 10' tall when we're all done.  Probably pour end of next week. 

these form boards are pretty simple -- pieces of 1.25" thick plywood.  I like simple. 

Horse rescue costs 15% of snohomish counties animal control budget...

Article in the local paper that states that something around 15% of the entire animal control budget of snohomish county is currently being spent taking care of seized horses.  This is a followup note to my blog "Horses -- the other red meat" that I wrote pointing out that outlawing the slaughter of horses in the US has made the plight of horses worse, not better. 

Maybe we should just license all horses and use the fees generated to fund the rescues that regularly appear.  As a non-horse owner, I don't see anything wrong with all horse owners chipping in to pay for their chosen animal.    We do that for dogs and cats. 

If we're going to consider horses pets and not livestock, then a licensing scheme based on the same sort of idea should be considered.    Yes, we can bill the owner of the horses, but most of the time they're broke and you can't get blood from a stone. 

The dirty secret of grass fed beef

I've been thinking about this for a while, and I'm going to say something about it here.  This may come as a shock to you, but it's true, and it's something that you will never hear on any other farm blog.  It's something that we all hide from the consumers.  Some of them would be horrified to know this, but I'm going to say it. 

COWS HATE GRASS

There.  It's said.  Given any other sort of food to eat, cows will eat it in preference to grass.  They'll eat your chicken feed.  They'll eat pig feed.  They'll accept apples from strangers.  They'll chase you down to look into buckets that you're carrying, in the hopes that it contains something other than grass. 

They'll break into your chicken coop.  They'll pace along the fence, following you for miles in the vain hope that you'll give them something to break the grass monopoly.  It's true.  Given the choice, a cow will eat just about anything else first. 

This isn't a peaceful pastoral scene, above.  That's my cow calculating in a slow, deliberate cow way how many steps it will take to run me down and take the bucket from my hands.  I'm only safe if I'm near a gate, and can dodge out.  I often feed the other animals discreetly; hiding my bucket, or holding it behind me, for fear of a cow mugging. 

COWS HATE GRASS. 

First test of the corral and loading chute with the cows

This is the first time we've used the new corral with full-sized cows.  we've loaded and unloaded various pigs, sheep and goats, but my $5 calves are HUGE now.  The biggest is around 1400lbs, the smaller ones are around 900.  They're between 5 and 6 foot tall at the shoulder. The load/unload chute walls are too short for them; I'm going to extend them up another 18", and I'm going to add more crossbars across the top to prevent cows from going up and over.  These guys were pretty calm, but as you can see their backs are level with the walls of the chute. 

As big as they are, their hips touch both sides as they walk through.  I was a bit concerned about size, but these are my biggest critters, and they fit nice and tight; no way for them to turn around, which is the point. 

The first cow through balked a little; there were turkeys perched on both sides, and the cow didn't like them above her head, so stopped.  We had to move all the turkeys before she'd continue. 

The ramp framing was sufficient to hold 3 of the cows at once, which is good.  This is the hinged part that allows us to move the ramp from side to size to precisely line up with the trailer door.  Worked well.  The slotted part slides out, so that when the ramp is at an angle, you can extend it so that there's no gap a cow can fit through. 

Here's the chute entirely full of cows, following nose to tail. 

Here's my holstein swim team, all safe and sound in the crowding gate area.  Welcome home, critters!

High water pictures

Picture taken 12-12, about flood level about 25'

Picture taken 12-13, flood level about 29'
29' is still about 24" below the top of the dike, but it's always a little nerve wracking when it gets close. Water is receding now, so this alert is over.  Now to see if the dike is damaged somewhere. 

Cow pasture flooded

I got a call from the snohomish county sheriff that my cows were out, and I was a little amazed.  I had just checked on them last night, around 8pm, and the fence was secure, electric fence working and charged, and the cows were contentedly eating 6 bales of hay that I'd brought them.  All was good on the cow front, or so I thought. 

 The cows apparently got out of the fence because the pasture that they're in flooded after my check last night.  It looks like the water got 4' deep (the 4th rail on the corral shows water marks, so pretty darned deep) and pretty fast, too.  In a few hours.  I shouldn't have been surprised; the stilliguamish river hit record flood levels yesterday, and apparently a dike failed, prompting the brief closure of I5 and highway 530, near where I took the pictures in yesterdays blog entry. 

The cows probably just walked over the fence when the electric fence charger went under water, or the wires shorted.  Either way, I'm glad that they self-rescued, and it gave me the chance to meet more of the neighbors and hand out my card.   Since the pasture is pretty much underwater, I'm moving the cows to my ebey island property now. 

I've marked on the fence posts the height that the water reached -- which provides me with a level for future building projects.  Figure if this is an all-time record-setting flood, that if I build a foot above the actual levels I'll be good. 

2010 flood alert followup

 This is the island side of the dike.  I'm not sure what the big green pipe is, but it's pretty big.  maybe 8' tall and 6' in diameter.   Note that there's a gate in the upper right hand of that picture. You'll see that same gate in the next picture. 

This is the river side of the dike.  Note the gate.  the river level is 8-10' above the land inside the dike, and this isn't at peak water.  When the dike was installed in 1920, the land inside the dike was drained, and over the last 90 years has subsided quite a bit -- if the dike breaks, the island fill fill up like a bathtub, even if there's not a flood.  The reason that I worry during flood season is that...

 during a flood a huge quantity of debris comes down the river.  This picture was taken in the same place, about 4 hours later.  There's probably 60 trees, lodged in the pillars of the highway bridge, forming an impromptu beaver dam.  This sort of dam redirects the water into the dike, eroding it, and causes the water level to go up higher than it would otherwise.  The highway department sends out a trackhoe that sits on the bridge and knocks the logs loose as they float down the river, but they were a little slow this time, and a huge logjam formed before they had their equipment in place. 

 This is a business located a few miles north, at the intersection of highway 530 and interstate 5. (Satellite view here; this is the business located due east of the shell station; i'm standing with my back to the shell station as i took this picture)  The water in the foreground is about 2' deep, and is moving from left to right at about 6mph.  that's a pretty fast, deep flow.  The state patrol has closed this road at the time of this writing, but the businesses in this area are probably going to get a few feet of water.   My cow pasture is 2 miles upstream, but strangely enough doesn't have any flood water on it at all, despite being in the same flood plain.  Go figure.   Local news coverage here.

 At the gas station being slowly submerged, I saw this cool hovercraft.  It's a specialized rescue sled, and it's pretty darned cool. 

 No propellers; the nozzles at the rear propel and steer it.  You can see the skirt around the base; any flat surface -- water, dirt, mud, whatever, and it'll move right across it.  I've never seen one of these before, and they're very cool.

While I was there the water went up 6" more.  Pretty soon these guys won't have to unload this gadget.  It'll just float right off.

First flood alert of 2010 season

We've got a lot of rain on top of a heavy snowpack heading our way.  They're saying that it'll be a short event, but I'm moving my animals into the evacuation pasture on Saturday morning on this warning. 

River levels of 32 feet or better are where the danger zone is for me.  It's forecasted to reach 27-28 feet (above flood level, but below the level of the dike) on 12-13 and 12-14.  I'll be watching it carefully. 

You can see current river levels and projected levels here. 

tax foreclosure auction 2010 and sticky subjects

(Skip to the last paragraph of this entry for the sticky subject: what do you do with the person who used to own the house and who still lives there now.  )

For the last few years I've been going to the Snohomish county tax foreclosure auction, held each year in January.  I've written about it in the past, in 2008 and in 2009.  These auctions are held in accordance with  
RCW 84.64

I go to these auctions because it's a chance to pick up land at a pretty much rock-bottom price.  There's some complications, and you can get burned, and the land is offered without any guarantee, and the land itself may have no or very limited use,so if you do go to one of these auctions and buy land, be aware.  Talk to a good attorney about the risks, and make sure that attorney knows what they're talking about. 

The rules of the auction are pretty simple:   As-is, as each parcel is auctioned you've got to pay cash or cashiers check, there are some ways that the previous owner can get the property back (consult an attorney if you're curious, but they're all unlikely) and Kirk Sievers kinda sucks as an auctioneer, but you get used to him*. 

I purchased the property that I'm currently grazing my cows on for $2k/acre in the 2008 auction; in fact, usually I'll purchase bare land because it's what I know best.  This year I bought a building lot and a townhouse, which is a departure for me.

I think that we're at a point where most folks think that owning real estate is like having a rabid dog, and that sort of pessimism really interests me.  Western Washington is still growing fast -- we issue 16,000 new  drivers licenses each month, and those folks have got to live somewhere. 

There were quite a few people who attended this years auction; so many, in fact, that they weren't sure that they'd have enough property lists to go around.   I purchased two properties at this auction:  A .25 acre building lot and a townhouse a few miles north of my farm.   The bidding this year was more lively and intense than in the previous two years.  I think that we're getting our confidence back. 

The townhouse is 3br, 2.5 baths, 2,000 square feet.  Constructed in 2005, it's relatively new.  It sold for 165k in 2005, and then sold for $243k in 2007.  What's a fair price for it now?  whatever the market will bear.  I purchased it for 101k, roughly 43% of the market price 3 years ago.  About $50 a square foot.  Other properties in the area are selling for an average of $133/sq foot, so I figure i got a good deal.   If you think you're positive on your own home mortgage, you might want to look at these numbers.  This house sold for 40% of what it was worth 3 years ago. 

Now this is the kinda touchy part.  Prior to the sale you don't have any right to see or inspect the property in question.  For the most part, you're buying blind, and the pricing reflects that risk.  In this case the inside looks pretty good.   Heres some pictures from the townhouse i purchased earlier today, taken today.

2 car garage converted into home office. 

nice sunny dining area. 

small but serviceable kitchen

master bedroom with attached private bath

2nd upstairs bath

spare bedroom

3rd bedroom with attached bath. 

Sticky subjects

You can tell from the pictures that the previous owner, a mortgage broker, really hasn't made any attempt to pack or move.  He's living in this townhouse with his wife and 86 year old mother.  Since this property was lost to foreclosure, I'm sure that he's not paid his mortgage in a very long while.  If you don't have rent or a mortgage to pay, you can get used to having that extra money.  Mortgage is usually the single largest budget item.  So I'm not sure what I'll do with this fellow.  I'll talk to him on Monday and see if we can work out a plan; but as I said to him today "hey, your credit isn't very good with me; you haven't paid your mortgage, and as a landlord, that's pretty much the worst sort of debt to not pay.  Lets talk on Monday. "

* Kirk needs to wait longer after a bid to see if there are other bids.  He's often too quick to call "Sold" and people debating bidding more are cut off.  I've learned to bid loudly and quickly; I've been trained.