Ag Recession ?

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Ag Recession ?

Post by Stocker Steve » Sun Oct 21, 2018 10:41 am

Seeing some continued downward trends here. Several neighbors have sold their cows and rented out their land. Most tenants are not replacing the nutrients removed, and/or insurance farmers, so this is not sustainable... Neighbors then follow a year or two later with an equipment auction and/or a land sale. Basically cashing out over about a three year period.

Lenders are threating to cut off some credit lines after several years of no operating profit. I got a call this spring asking for leads on borrowing input costs against a promissory note. :help: This trade war will be the death of some.

Interesting thing is land prices are holding up due to a mix of old family money, optimistic deer hunters, and FSA Beginning Farmer loans.

Traditional thinking is that one should be looking for opportunities here. Do you see any for not beginning farmers?


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Re: Ag Recession ?

Post by Bright Raven » Sun Oct 21, 2018 10:47 am

Good post.

Locally, all the farmers are aging - probably in their 60s. I cannot see incentives that will put younger farmers in their shoes.

I often wonder if I should cash out while there is some remaining market for farm land. Land prices are stagnant. The deer hunting market keeps marginal land almost as high as pasture land.
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Re: Ag Recession ?

Post by Stocker Steve » Sun Oct 21, 2018 11:30 am

No need to replace farmers if other operations expand, or the land is converted to a hunting lease. Our hunting land is much higher priced than pasture land. At least a 25% premium.

We do have some young farmers expanding here. They are the third or fourth generation of families that are able to work together. They have never been to the city. They enjoy FWA cab tractors. Girl friends seem to be their biggest challenge.

Our extension agent's wife has a reputation for match making. i suggested sponsoring speed dating for farm hers (I would pay to watch this) but got shot down immediately.
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Re: Ag Recession ?

Post by sim.-ang.king » Sun Oct 21, 2018 12:42 pm

Maybe it's time the government gets out of Ag. They are the ones that have been proping up the prices of land rent and input cost. Getting rid of federal funds will cut input cost almost in half. Since the seed companies, and banks will no longer have the insurance of the federal government backing farmers.
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Re: Ag Recession ?

Post by Bright Raven » Sun Oct 21, 2018 12:55 pm

Stocker Steve wrote:Girl friends seem to be their biggest challenge.

Our extension agent's wife has a reputation for match making. i suggested sponsoring speed dating for farm hers (I would pay to watch this) but got shot down immediately.


The girlfriend issue to not unique to farmers. I have been trying for 2 weeks to get four loads of gravel hauled. The trucker keeps putting it off because his girlfriend runs his life.
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Re: Ag Recession ?

Post by Stocker Steve » Sun Oct 21, 2018 1:09 pm

sim.-ang.king wrote:Maybe it's time the government gets out of Ag. They are the ones that have been proping up the prices of land rent and input cost.


Government subsidies increase the price of land. No CRP signup right now, but I expect that to change.
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Re: Ag Recession ?

Post by Stocker Steve » Sun Oct 21, 2018 1:13 pm

I searched for ag investment opportunity. I found land investments in Africa and Brazil. Which continent should I focus on?
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Re: Ag Recession ?

Post by Bright Raven » Sun Oct 21, 2018 1:29 pm

Stocker Steve wrote:I searched for ag investment opportunity. I found land investments in Africa and Brazil. Which continent should I focus on?


Africa. I would look at Tanzania.
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Re: Ag Recession ?

Post by Stocker Steve » Sun Oct 21, 2018 1:50 pm

Green Hills of Africa?

(my Kudu is much much bigger)
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Re: Ag Recession ?

Post by Bright Raven » Sun Oct 21, 2018 1:57 pm

Stocker Steve wrote:Green Hills of Africa?

(my Kudu is much much bigger)


Wonderful book. So many good books on Africa. Robert Ruark! Hemingway, etc
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Re: Ag Recession ?

Post by Brute 23 » Sun Oct 21, 2018 3:03 pm

Stocker Steve wrote:Seeing some continued downward trends here. Several neighbors have sold their cows and rented out their land. Most tenants are not replacing the nutrients removed, and/or insurance farmers, so this is not sustainable... Neighbors then follow a year or two later with an equipment auction and/or a land sale. Basically cashing out over about a three year period.

Lenders are threating to cut off some credit lines after several years of no operating profit. I got a call this spring asking for leads on borrowing input costs against a promissory note. :help: This trade war will be the death of some.

Interesting thing is land prices are holding up due to a mix of old family money, optimistic deer hunters, and FSA Beginning Farmer loans.

Traditional thinking is that one should be looking for opportunities here. Do you see any for not beginning farmers?


Their debt is killing them not policy. It was just a matter of time. The weak will get out and the strong will get stronger. That's basic business.
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Re: Ag Recession ?

Post by Stocker Steve » Sun Oct 21, 2018 3:20 pm

Brute 23 wrote:Their debt is killing them not policy. It was just a matter of time. The weak will get out and the strong will get stronger. That's basic business.


Yes, leveraging cuts both ways and it is difficult to earn your way out of a recession. Downsizing might work, but a government bailout is better. :banana:

The local sell outs here are not deep in debt. They don't have successors and don't think it is worth the effort to keep going... They are just tired. One was farming with his son - - when Dad said he had to quit due to health issues, the son sold out too. :o I think he is looking for a girl friend now.
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Re: Ag Recession ?

Post by 1982vett » Sun Oct 21, 2018 4:10 pm

:2cents: Can’t say this is a recession problem...agriculture has been on this path for a long time. Doubt anything will change in the near future.
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Re: Ag Recession ?

Post by ALACOWMAN » Sun Oct 21, 2018 4:48 pm

Brute 23 wrote:
Their debt is killing them not policy. It was just a matter of time. The weak will get out and the strong will get stronger. That's basic business.
time to kick it back into hobby mode , and ride it out...
as an adult,it's clear to me now...why Ernest T Bass, threw rocks at people..

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Re: Ag Recession ?

Post by Stocker Steve » Sun Oct 21, 2018 7:12 pm

1982vett wrote::2cents: Can’t say this is a recession problem...agriculture has been on this path for a long time. Doubt anything will change in the near future.


Unfortunately, I think you are mostly correct.
A few are doing well with organic or direct marketing or seed stock.
The ethanol fueled boom jacked up a lot of commodity expectations, but I don't think E15 will bring it back.
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