This is my 7th year of basically full-time farming, and over that time I've years working on a mix of things that I can do on my farm to make a profit, and at this point I'm pretty happy with the operation. I'll write a blog entry about that in a few days.
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| the link to the real estate listing is below |
But one thing that I'd like to have more of is land. Although I own about 30 acres now, it's split up into several 5 to 10 acre parcels, and having your farm all over the map is very difficult. If I were growing corn or something, it wouldn't be ideal, but it would be better. Corn doesn't
break down fences and get picked up by the animal control.
Also, commuting between the various parcels takes time, and honestly, it is time that I'd rather spend working. If everything were in one place, and my house was there too, I'd be a lot more efficient.
My first thought was to buy some more bare acres -- all of the land that I've purchased so far has been bare, and I've just
built stuff on it to
make it usable for whatever it was that I use that parcel for.
So my criteria is that it has to be more than 30 acres, it has to have at least several acres above the flood plain (because I'm REALLY tired of the
annual flood drill) so that I can have my house and barn(s) out of danger. Farming is hard enough as it is, the flood thing just adds more difficulty.
Why do I have to buy flood plain at all? Well, basically all of the nice farmland in this area that isn't on the flood plain is pretty much earmarked for or priced for development. So $10,000 to $50,000 an acre, and I'd rather pay something closer to $4,000 an acre or less. Flood plain land in this area sells for between $2,000 and $8,000/acre.
I can live with pastures that flood, I just can't have the homestead flood as well. I want to be able to watch the flood from the comfort of my living room or barn and not have to worry about the animals.
Bare land is a cash-only deal, for the most part. That helps to keep the cost down, but it means you have to have a pile of cash for any sizable purchase. Here's an example;
121 acres of farmland, with 1/2 acre off the flood plain, listed for $495,000
So do you have to spend $495,000 to buy that land? In a word, no. That land is half the land from a defunct dairy farm; a developer purchased that land for $2.4 million in 2007. The developer hung on long enough to tear down the farm buildings, but they left the house and a barn, and they started some sort of permit process on that land. Cut it into various tax parcels, applied for permits, did some grading, and then they're dead. The bank repossessed it in early 2012.
So a bank owns it now, and they'd would MUCH MUCH rather show it as a performing loan than they would as a property they own. So in this case, more so that most, if you have good credit and a good story, there's a better-than-fair chance that the bank will finance you. But it's better to have cash, no doubt. At $495k, that's $4k an acre. Smaller parcels of that same ground are selling now for $6 to $8k/acre. But I don't think that this parcel will sell for that. My guess is that it will sell for something in the $300k range. There just aren't many buyers for large chunks of land right now.
So while there are chunks of land out there that would work, it's been my experience when you buy a big patch of bare ground, it can take months or years to get the permits through to allow you to build, particularly if it's in the flood plain.
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| Dairy operations often have very large barns. You can never have too big a barn. |
For what I'd like, one type of farm that would work out pretty well is a medium sized dairy farm. I've run across a couple of them, and they're very interesting. Dairy farming hasn't been profitable for the last 4 years, from a mix of both regulatory issues and feed costs and market price for milk, and quite a few of them have shut down, but what they leave behind could easily support a small herd of beef cattle (why waste all the cattle equipment?) and a fairly big pig operation, like mine.
It's been interesting to look at farms, and it feels a lot like contrarian thinking. The farm that I looked at today shut its doors 5 months ago, and the former dairyman is still living there. It was a little tense to walk around and look at the property with him. He was gracious and i was able to get my basic questions about the farm in. He had been milking 300 cows, leasing 80 acres, farming 80 acres. He had employed 3 full time employees and himself in the farm, and he'd spent the last 14 years dairying the farm. "If I could make money milking cows I'd still be here. I couldn't do it. I figured out that I could milk 100 cows by myself, just me, and make that work, but then I calculated I'd make about a nickel a cow. "
The real estate agent asked the question that I couldn't bring myself to ask. "What will you do when the farm sells?" "I don't know",the dairyman said, shaking his head. "I'm 66, and I don't think I'll ever farm again. I can draw on my social security now, and I'll get $1500 a month from that..." his voice trailed off a bit. "...but I don't know where I'm going to move".
The real estate agent and I talked afterwards. "If I were him I'd have just left. I don't know if I could be there and have the place sold out from under me like he is", the real estate agent said, "It would kill me to be there and not be able to do anything. you don't fix anything, you can't make any plans, it's like limbo. That would just kill me".
I agree. Endings are hard.
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