The Ranching Economy

[Straight Arrow]

They always tell you how bad the year was but always seem to be driving a new pickup truck.

No that new truck and horse trailer aren't mine ... they belong to the ranch.

 

[mtmiller]

Wow, I grew up on a small ranch, and we were incredibly poor. Wish someone had told us about these great government giveaways.

EWG's Farm Subsidy Database

EWG's Farm Subsidy Database put the issue on the map and is driving reform. Just ten percent of America's largest and richest farms collect almost three-fourths of federal farm subsidies; cash payments that often harm the environment.

farm.ewg.org

 

[brockel]

Reminds me of when I used to build steel grain bins on local farm sites across ND. At some point during the day the farmer would drive over to say hi. They were always nice and some brought lemonade and cookies. But the 4 of us on the crew knew at 6am when we came on the jobsite how the following question was going to be answered, "so how's farming?". If we saw a new shiny current year 4x4 pickup in front of the house right next to the wife's caddy and a bunch of shiny new tractors/implements in a big aerospace sized pole barn we knew the answer was going to be 20 minutes on why the banks, and the politicians, and the government and the Arabs and the city folks all made it impossible for a decent man to earn a living farming any more. But if we saw a well maintained 5 yo pickup next to a 6 yo Oldsmobile in the yard, and obviously well used but well-maintained tractors/implements around the grounds we knew that anwer was going to be, "ya get good years and bad years, all things considered, we are doing ok, how about you, must be tough slinging steel all day in the hot summer". They never let us down. They all stayed to script. I gather not much has changed since I left ND.

Still spot on.

 

[westbranch]

Being a crop farmer and cattle feeder i have a different look at this then most people on here. I eat beef 6 days a week and am scheduled to work 7 days a week no holidays no sick pay no overtime no benefits. I'm not complaining I enjoy it even on the 30 below mornings. I do think it's quite funny how some of the hardest working people in the country that make one of the things that is essential for like "food" are viewed badly in the publics eye. The reason for the subsidies and farmer welfare is because our government wants cheap food for its people. If you look at the percentage of wages in the United States spent on food compared to the rest of the world it is one of if not the lowest.
My grandpa always said it's been to long since the people in this country have been hungry. Until people get hungry they will just think that food is over priced and farmers are the cause of all the world's troubles.
I am not totally familiar with how subsidies and government leases in the west work and I'm sure people abuse them to make ranching look bad.
Just throwing my .02 cents in what feels like but was not meant to be rant with bad grammar.

Feeling like I should establish some credentials before posting a mini-rant. I grew up on a small dairy farm in MN. My brother still owns the farm and does hay, small grains, and beef cattle on pasture. My in-laws farm in NW IA and own a large chunk of the most expensive farm ground in the country. I lived and worked in south central MN as a CPA for 7 years with a ton of ag industry clients. So I have seen the #s and done a ton of analysis on everything from small sole-prop farms trying to make a living to large family ran farms with lots of employees that were doing 8-9 figure capex projects to expand.

IME the farmers that are the most successful aren't the ones most interested in maintaining or improving the soil and trying to run a sustainable business with a love of the land and the animals. The most successful ones are "producers" that are maximizing inputs whether it be for hog/chicken/beef confinement/feedlot space, pumping the soil full of fertilizers and manure, and under the current subsidy programs there is a lot of planning to maximize income based on the subsidies. Hell, even a lot of the "top" farmers prefer to call themselves producers over farmers.

We need to stop subsidizing corn and soybeans at the expense of the soil and healthy foods. The subsidies should be incentives to improve the products of the farm and diversify, not just increasing corn, soybean, beef, pork, etc. output year after year. The next time sugar beet farmers overproduce and the coops want a bailout, the only ones that get paid should be the ones that quit farming sugar beets and start producing produce or change their farming methods. No more crop insurance for fields that flood out a couple times a decade. River/creek bottoms can be turned into cattle pasture, breakup all of the tiling. Which will also reduce flooding in midwest metro areas. No reason to be subsidizing crap food and poor farming practices. The costs of our "cheap" food are much higher with all of the indirect costs and bad incentives created.

 

[88man]

Bill says 100% synthetic beef.

Bill Gates: Rich nations should shift entirely to synthetic beef

We spoke to the Microsoft cofounder about his new book, the limits of his optimism, the tech breakthroughs and energy policies we need—and how his thinking on climate change has evolved.

www.technologyreview.com

 

[VikingsGuy]

Bill says 100% synthetic beef.

Bill Gates: Rich nations should shift entirely to synthetic beef

We spoke to the Microsoft cofounder about his new book, the limits of his optimism, the tech breakthroughs and energy policies we need—and how his thinking on climate change has evolved.

www.technologyreview.com

"The future is plastics"

 

[westbranch]

I would agree that folks that built large quantities of money from the ground up fit this, but trust fund babies, hollywood entertainers and .com folks who stumbled into money very quickly can have a bit of a carefree attitude with their funds.

Offsetting income from other profitable businesses while gaining equity in the farm is still quite common. Buying the equipment, pivots, bins, farm buildings, etc. all have favorable depreciation treatment. Crop inputs are deductible when paid, and they can defer the income by holding off on selling grain and store it in their shiny new bins. The deductions can offset other income sources while equity is built in the farm.

Even a small family farm that has a spouse working in town will use the farm losses to offset the spouse's W2 income so minimal income taxes are paid.

 

[brocksw]

Bill says 100% synthetic beef.

Bill Gates: Rich nations should shift entirely to synthetic beef

We spoke to the Microsoft cofounder about his new book, the limits of his optimism, the tech breakthroughs and energy policies we need—and how his thinking on climate change has evolved.

www.technologyreview.com

Bill's a smart man... way smarter than just about any of us. But a world without real Ribeyes is not a world I want to live in.

 

[ART_SKYD]

Like all forms of government assistance there are those who use it for its intended use and those who abuse the system. There has been farm buyout programs in the past, problem is most of those who choose to go that route are ones who abuse the system, find a loop hole and are farming under a kids name a short time later. Farmers in our area are some of the most generous people around, giving to and supporting their local schools, churches, communities during good times and bad. They don’t do so because of the tax write off.
IMO the biggest reason that landowners guard their land access so closely is because there are those out there who have no respect for other’s property and ruin the chance at access for the rest of us. If you build a relationship and gain the trust of a landowner you will usually gain access to that property if it’s not tied up in a lease. Just need to find a way to start that relationship.
That being said I have found that to only be true on family farms/ ranches. If it’s owned by a corporation or investment firm good luck.

 

[longbow51]

EWG's Farm Subsidy Database

EWG's Farm Subsidy Database put the issue on the map and is driving reform. Just ten percent of America's largest and richest farms collect almost three-fourths of federal farm subsidies; cash payments that often harm the environment.

farm.ewg.org

Wow, no wonder replacing a tire or a truck battery was a total disaster for us; thanks for that. Second main reason I went to Medical School. #1 Help others #2 Told to me by a Green Beret Special Forces Medic: A Doctor ain't nobody's ...

 

[Irrelevant]

Not a ranch, but I hear a similar story about cranberry growers around here. They always tell you how bad the year was but always seem to be driving a new pickup truck.

Funny I was thinking the same thing about cherries orchardists around here or berries growers in NW Washington. One grower in Whatcom Co picked me up for a site visit for some water rights work in a new 6-pack diesel, lifted, with dualies. I commented about the Zeiss bino's he had the dash, and he responded, "oh those are just my cheap pickup nockers, I leave the good ones at home". Or the Cherry guys that don't answer their phone from Nov to Feb because they're in Mexico.

 

[Mountain Man]

The national security points falls apart when you realize most of the corn, soy, and grains grown aren’t for human consumption or require process to make them fit for consumption. I’ve worked on dairy and beef operations and had some fail. We producing more food with less land. Farms need to fail for the sake of the greater good so that those farmers that are actually well managed can make real money and not skimp by on some government controlled price setting or participation trophy subsidy.

Some good points. One clarification of my thoughts is that production capacity is important for national security. That does not mean that I feel the government is properly managing subsidies to create an optimal scenario of production capacity. That is the difference between theory and practice. I do think it is important we as a nation have the ability to produce our own food without relying on imports. That said, I cannot speak to how effective (or not) we are at it. While I agree with you that it is important farms be well managed and efficient, there is also a need to have diversification (just like investments) so the system doesn't become too reliant on a small number of "producers".

 

[noharleyyet]

Bill's a smart man... way smarter than just about any of us. But a world without real Ribeyes is not a world I want to live in.

Gate's probably hasn't had anything but Kobe in 30 years...prolly a closet omnivore.

 

[Straight Arrow]

Gate's probably hasn't had anything but Kobe in 30 years...prolly a closet omnivore.

Apparently Gates is pretty open about his love of cheeseburgers. He treated Anderson Cooper to lunch at the Burgermaster in Bellevue, Washington.
Likely he visits Juicy Lucy's when in the Twin Cities.

 

[Hydrophilic]

Offsetting income from other profitable businesses while gaining equity in the farm is still quite common. Buying the equipment, pivots, bins, farm buildings, etc. all have favorable depreciation treatment. Crop inputs are deductible when paid, and they can defer the income by holding off on selling grain and store it in their shiny new bins. The deductions can offset other income sources while equity is built in the farm.

Even a small family farm that has a spouse working in town will use the farm losses to offset the spouse's W2 income so minimal income taxes are paid.

Reminds me a fishing lodge I went to in Alaska. The guides didn't like working there and filled me in. The lodge purposefully didn't book them very busy because they wanted to take a loss and write if off. Apparently they had 5 fishing lodges around the world, owners lived in Texas. Pretty shady!

 

[noharleyyet]

Apparently Gates is pretty open about his love of cheeseburgers. He treated Anderson Cooper to lunch at the Burgermaster in Bellevue, Washington.
Likely he visits Juicy Lucy's when in the Twin Cities.

I would gladly buy Cooper all the cheeseburgers he could eat...; )

 

[VikingsGuy]

Likely he visits Juicy Lucy's when in the Twin Cities.

But which one? There is bad blood on that topic in these parts - one of the two is fake news

 

[Straight Arrow]

But which one?

Forgive me ... was not aware of more than one Juicy Lucy.

 

[VikingsGuy]

Reminds me a fishing lodge I went to in Alaska. The guides didn't like working there and filled me in. The lodge purposefully didn't book them very busy because they wanted to take a loss and write if off. Apparently they had 5 fishing lodges around the world, owners lived in Texas. Pretty shady!

To pad a business with personal costs, or to run at cost and bank on underlying deferred asset gains, or to know losses will be offsetting other gains, or to take losses now that will create greater income in a subsequent tax year are always logical (even if not always legal), but actually foregoing income to manufacture a loss actually destroys total economic value across a person's portfolio (absent some other weird govt incentives). Seems like either the guides lacked full info or the owners need better tax advisors.

 

[VikingsGuy]

Forgive me ... was not aware of more than one Juicy Lucy.

The Juicy Lucy: Two bars battling since 1950s over Minnesota's famous burger

Two Minneapolis dive bars claim to have invented the Juicy Lucy, the legendary cheese-stuffed burger.

www.startribune.com