"I love to farm."
That is the most common reason I get from those who feel compelled to respond to a question about their occupational choice. There is soul searching going on today in rural America, because of low grain prices, shifting demographics and increasingly attractive off-farm employment.
I have two letters, from opposite ends of the spectrum, both expressing love for the lifestyle, but unhappiness that their dreams have not been realized.
Stan is 28 years old. He grew up on a 300-acre farm raising corn, soybeans and 20 beef cows. Stan attended college and now has a job 100 miles from the family farm, so he only can get there on weekends.
Last year, I purchased an 80-acre farm. The profit off of the farm is just enough to make the payment, even using dad's equipment. I just have to do the same for 29 more years. How does one pay for equipment and still acquire land? How do you compete with the large farms? I consider 1,000 acres a large farm. Especially when it comes to getting much bigger farm payments from the government. If the land is not passed down to you, it is hard to make farming work. Who is going to farm in the future? I do not see how I can compete with a 10,000-acre farmer!.
Stan is a "wannabe" farmer. He is from the land, but his parents must have encouraged him to get an education, so that he would have options. Now that he has the city job, he wants to go back to the lifestyle of his youth. Hard, cold fact, Stan: You can't go back. If you did, you would not be able to make a living from farming 80 acres, and you have no means to buy up to the size necessary to be full time. If you left your job and your family saw a drop in their lifestyle, you would have to make a choice between keeping them or the farm and probably head to the city again to make enough income to restore your buying power. Your best bet is to meld your career and desire for rural lifestyle together. Live in the country and work in the city.
Hank and Margo combined to write me a letter that comes from the opposite view.
Dear Mr. Root:
I know why I started farming. It was to raise a family in a rural environment, to be independent and to work outside. Our children are on their own now and my wife has had enough cold feet and wet gloves. So, why do I continue on my own? It is because I can't get loose from the farm. Although the farm is no longer profitable with today's commodity prices, I don't feel that with what I have saved, plus the proceeds of the land, cattle and equipment that there is enough capital to retire with the same standard of living that we have become used to.
This is why the younger generation can't get into farming, because the older generation cannot accept the tax bite to exit. When you enter a business to support a lifestyle and raise children, you don't set up an exit strategy. It appears that you have accomplished your stated goal, but a lifestyle decision going in has turned to a business decision coming out. If the farm is not making money, I would assume it is losing money minus the annual appreciation in land value and government payments. In your remaining working years, will the amount of equity consumed be larger than the capital gains tax? If so, sell out now, if not, farm the land and the government as long as possible.
Entering farming because you love it is admirable, but short sighted. Its tough enough to enter a marriage that way. Loving what you do is a great basis for doing it well, but the real world of business requires that you make enough money to pay all expenses and have enough profit to support your lifestyle. Don't throw all your effort into romancing the land. Be a good business person first and the love affair can last a lot longer.
A human relations expert, from Ohio State University, told me that the best farming operations he has seen were partnerships. His example was a dairy operated by two brothers. One brother loved caring for the cows. The other brother hated cows. He only had interest in records and marketing. Perhaps this is the formula for a husband and wife or a farming partnership in the new century. Find your specific skill that contributes to the common goal.
Next week: "You will be sorry when we are gone, and the corporations are the only ones farming in this country."
Feel free to write me, as you may make this column more interactive: Ken Root, Host of AgriTalk, 634 Hall of Fame Drive, Bonner Springs, KS 66012; e-mail, firstname.lastname@example.org; or fax, 913-489-4051.
Farmers, as a group, get favorable tax treatment relative to corporations or wage earners who don't own a home. Most of the tax cases involving farmers today involve those who materially participate in farming, but want to receive their payments without a self-employment tax added to them. It appears the Internal Revenue Service is going to change these in favor of the farmer.
Editor's note: Ken Root is host of AgriTalk. He is an Oklahoma native and worked in Kansas for seven years as a farm news broadcaster. He has been a broadcast and agribusiness professional for 26 years, with a portion of the time spent in Oklahoma, New Jersey and Washington, DC. AgriTalk is a live, call in talk show heard across the country Monday through Friday, at 10:06 to 11 a.m. Central time, on 115 affiliate stations and the Internet, at agritalk.com.