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Interesting video….

How Much Money do Farmers Make?

You know, I didn’t watch the whole thing. He is obviously an intelligent and likable young man. In fact, most farmers and ranchers are very likable people. I am first generation off the farm and I still have relatives and friends in the business.

I would say that most average size, capable farmers in our neck of the woods have seen their net worth increase on average $500k each year for a number of years. Farmers don’t care about net worth increase? Please, that is how ag bankers tell if they are making money.

He doesn’t take into account the government subsidies of crop insurance premiums, which largely, if not entirely insulate them from operating losses. Also, other government payments have been quite lucrative since Covid, and it is kind of Christmas all year around, with even the producers not fully anticipating what the Feds are going to send their way.

Also, most farms have paid for land or inherited wealth, so his land costs are likely overstated.

For 1700 acres in Iowa, I think a $900k equipment line is pretty light, also, they buy up to take advantage of accelerated depreciation to offset income.

They can delay or accelerate income for tax planning, and their income tax burden is typically pretty light/enviable. They can write off many personal expenses and assets. Nice work if you can get (inherit) it.

They bust their butt for three weeks of planting, three weeks of spraying (if they don’t have it custom applied), and 4-6 weeks of harvest (some of which is also custom done). Work after harvest ends in September-November primarily consists of a bit of maintenance and hauling grain, again, which often includes custom hire, unless they have livestock. Again, nice work if you can get it.

If it is such a tough racket, ask yourself why the price of equipment and land continues to increase strongly - because they have the cash to afford it. The equipment manufacturers know it and farmers have the wherewithal to aggressively compete amongst themselves for land. Then ask one if he would trade jobs with you. It is a very nice income and a great lifestyle. Barriers to entry are extremely high.

As I said, they are mostly really really good people. I just get tired of the whining and need for a slap on the back for how hard they work. A lot of people work hard. For 48-52 weeks a year, not 1/3 of it, without Uncle Sam making sure they “cash flow”. It is a disgrace to tax normal people to ensure the profits of millionaires.

https://www.agriculture.com/farm-income-this-year-will-be-second-highest-ever-says-usda-8409588

This is the third year in a row of extraordinarily high farm income

Wait, Jimmy C and Sammo are millionaires?

A lot of what Slope said is true when it comes to the big farmers who know how to play the game.


I'm just a small time cow farmer who, as of late, has been busy watching the cattle market drop like a rock....lol

Every farmer I know says it’s go big or go home.
Living in the world of commodity price determining income, the cyclical nature takes getting used to. Bad part is when you’re making money you don’t truly enjoy it because you know you should save it to get you through the lean years. Alcohol makes it bearable.

Some of what he said.


At best.

Well, I like those guys, and I have no idea what their situation is. In most places, even remote, non-mountain, cattle country anymore, 2000 acres is going to be worth $1mm.

Typically, returns in cow/calf operations are lower than crop operations. Ranchland is often “pretty” and invites outside competition. I think Jim has sheep, and I’m not sure on cash flows there - it can be good because of the yield (2 lambs) on investment (1 ewe). Years ago they called sheep “mortgage lifters”. But they darn sure earn it.

just gonna soak up the comments for now ...

FIL does cattle as a write off says there’s no money in it

I should be clear.....what he said is no doubt true in higher production areas...such as the Midwest and the Dakotas.


It doesn't ring true where I farm and ranch.

There is a whole lot of difference between a large farm that grows nothing but corn and soybeans, and a small diversified one that has both livestock and crops.

I bought 15 acres a few yrs ago hay land and payed for it selling square bales off of it in 3 yrs hard work but profitable

If it were easy to get rich farming, or ranching, there'd be more millionaires.

I agree, Jim, and my comments were really reflective of large cash crop operations in the Midwest, and not livestock operations. Points west (MT/WY) are very different as land prices are determined as much or more by external demand vs operators.

Farming, and ag in general, are also 2 of the deadliest professions.

My buddy Chicken Farmer bought his own farm when he was 18. Had no help from family (his father was a terrible drunk and worse farmer who went broke a few times).

Chicken Farmer was milking his own 100 cow herd by himself. Up at 4 am, finish at 7 pm. 3 days a week he’d drive 250 miles to pick up wood shavings that he’d resell for profit locally. Most days his breakfast, lunch and dinner would be whole milk from his farm, though he’s a beer guy and always had beer. Then he bought a second farm for total 150 acres.

After 25 years in it, he got into broiler chickens. Keep in mind this is Canada so there is dairy quota and chicken quota (42.000 birds per cycle), that you have to buy. He got out of dairy 5 years later, but still holds ownership in some lines and makes money from that.

The chickens were a big investment, quota, new buildings, constant upgrades of equipment, etc. He says anyone getting into it now wouldn’t make a penny for at least the first 10 years. He rents out his crop land now but farmed it before.

He just turned 60, so 42 years of doing this. Didn’t marry or have kids until he was 47. His land is paid for and he makes a fabulous income. And he’s willing to take risks that I wouldn’t. I went with him last week when he signed the papers on a 2023 Dodge Demon 170 - MSRP, dealer premium, luxury tax, etc. he’s probably paid almost $300K. He bought it as an investment and won’t mind if he breaks even if he decides to have some fun driving it.

https://www.dodgegarage.com/srt-demon-170

I don’t envy him one bit. He earned it, and I don’t think I could have done it.

Just for some perspective...the last farm I bought was 1500 acres.....and was just a hair under a million.

It's not because it's a well kept secret......! Hahaha!

They mostly are all millionaires. It’s not easy to do because of the initial capital investment. Generally, if you don’t inherit it, you can’t do it, but if you inherit it, you will be a millionaire.

around here ave. land price that would cost 7.5 mil.