"Tell your story!" Anyone in the agriculture industry has been hearing it! It is important and I'm the first to boast how much I love to tell my story.
But, if I am honest, I'm usually telling my husband's story. He's the farmer.
Well not this year! Matt is sliding over into the buddy seat and turning me loose on my very own 60 acres! And I'm taking you along for the ride by detailing the entire process of raising corn right here, all season long!
When it comes to land, farmers generally talk in acres. One acre is 43,560 square feet - roughly the size of a football field.
The first step for any crop farmer is the most obvious (and most expensive) one - find some land.
Generally there are two options available for a farmer to obtain land - buy it or rent it.
On a side note- some farmers are given land, most families cannot simply turn over acres to the next generation that wants to come back. That would essentially be taking one family's income and cutting it in half. Generally, when a child comes back to the farm, the farm has to grow - a prime example of why "large farms" do not equal bad farms.
Buying land can be very challenging. Matt farmed for 7 years before we were actually able to buy any land. Land has to be for sale in an area that makes sense for the farmer, it has to be the right type of land for what the farmer wants to use it for, and the farmer has to be able to afford to purchase the land.
For years we kept an eye out for farms that might be for sale in our area. Several times we looked at farms that were either too far away, not the right type of soil for growing crops, or we simply could not afford them.
Just when Matt had all but given up, a couple we rented land from decided to give us the opportunity to buy the farm Matt had his eye on for as long as he could remember!
Owning a farm, instead of renting, is a financial game changer for a young farm family in the same way that owning a home, over renting, is for the average American family!
This farm was in the exact right location, with the mixture of crop and pasture land that matched our family's needs.
Additionally, the sellers were willing to wait on us to obtain funding from the USDA's beginning farmer loan program - which can be a long process. In a market where they could have contacted an investor and had their money in a few weeks, this was unbelievably gracious, a blessing we will never forget.
Traditional farm loans usually require a 30% down payment, at adjustable interest rates higher than a typical home loan. Also unlike home loans, most farm loans are made on 20 year instead of 30 year terms.
The USDA's young and beginning farmer program allowed us to be qualified for a 30 year farm loan - partially from a private bank and partially from the USDA - with only 5% down.
When it comes to a first farm purchase, many young farmers would never have a chance if it wasn't for these programs, funded through the farm bill. Matt and I were no different.
My sixty acres is part of the farm that Matt and I own. So although we do not pay rent, we do have a loan on the farm, which means there is a payment that still has to be made - from crops and calves we raise each year. That payment will be made not only from income off this farm, but from income from the farms Matt rents as well.
Renting land comes in many different forms. Farmers need to find land in the area, that is available for rent, and that can grow the crops they want to grow.
Rent contracts have gotten more creative and unique over the last few decades but most agreements take on one of two general forms - crop shares or cash rents.
Crop shares - or share cropping depending on your location- was the most popular way to rent ground for a long time. This form of rent allows the landowner and farmer to share in the risk, and the reward, of farming.
Many crop shares today are still on a standard 50/50 agreement where the landlord and farmer split the costs of putting in the crop, the land owner provides the land and the farmer the equipment and labor, and they then split whatever crop is raised off the farm half and half, or 50/50.
Another common crop share version is a different split such as an 80/20 or 70/30 share where the farmer covers all costs of the crop and pays the landowner the agreed upon share of the crop as rent.
In the last decades, the cash rent agreements have become more popular. Some of these contracts can become very complex with multiple payments, price averages, yield bonuses and more but the concept of cash renting is largely the same.
The farmer pays the agreed upon rent, sometimes in the fall, sometimes in the spring, and sometimes in two payments in fall and spring, and the farmer keeps 100% of the crop. The farmer takes on all of the risk and all of the reward with growing a crop.
Matt told me that he could probably rent my sixty acres for to another farmer for $100 an acre - so he would agree to rent it to me for $150! (By the time I harvest this crop he will be wishing he charged me more!)
Now that I have my 60 acres "rented", I have some major decisions to make on seed, fertilizers, crop insurance and more before it's time to plant.
Stay tuned!
But, if I am honest, I'm usually telling my husband's story. He's the farmer.
Well not this year! Matt is sliding over into the buddy seat and turning me loose on my very own 60 acres! And I'm taking you along for the ride by detailing the entire process of raising corn right here, all season long!
When it comes to land, farmers generally talk in acres. One acre is 43,560 square feet - roughly the size of a football field.
The first step for any crop farmer is the most obvious (and most expensive) one - find some land.
Generally there are two options available for a farmer to obtain land - buy it or rent it.
On a side note- some farmers are given land, most families cannot simply turn over acres to the next generation that wants to come back. That would essentially be taking one family's income and cutting it in half. Generally, when a child comes back to the farm, the farm has to grow - a prime example of why "large farms" do not equal bad farms.
Buying land can be very challenging. Matt farmed for 7 years before we were actually able to buy any land. Land has to be for sale in an area that makes sense for the farmer, it has to be the right type of land for what the farmer wants to use it for, and the farmer has to be able to afford to purchase the land.
For years we kept an eye out for farms that might be for sale in our area. Several times we looked at farms that were either too far away, not the right type of soil for growing crops, or we simply could not afford them.
Just when Matt had all but given up, a couple we rented land from decided to give us the opportunity to buy the farm Matt had his eye on for as long as he could remember!
Owning a farm, instead of renting, is a financial game changer for a young farm family in the same way that owning a home, over renting, is for the average American family!
This farm was in the exact right location, with the mixture of crop and pasture land that matched our family's needs.
Additionally, the sellers were willing to wait on us to obtain funding from the USDA's beginning farmer loan program - which can be a long process. In a market where they could have contacted an investor and had their money in a few weeks, this was unbelievably gracious, a blessing we will never forget.
Traditional farm loans usually require a 30% down payment, at adjustable interest rates higher than a typical home loan. Also unlike home loans, most farm loans are made on 20 year instead of 30 year terms.
The USDA's young and beginning farmer program allowed us to be qualified for a 30 year farm loan - partially from a private bank and partially from the USDA - with only 5% down.
When it comes to a first farm purchase, many young farmers would never have a chance if it wasn't for these programs, funded through the farm bill. Matt and I were no different.
My sixty acres is part of the farm that Matt and I own. So although we do not pay rent, we do have a loan on the farm, which means there is a payment that still has to be made - from crops and calves we raise each year. That payment will be made not only from income off this farm, but from income from the farms Matt rents as well.
Renting land comes in many different forms. Farmers need to find land in the area, that is available for rent, and that can grow the crops they want to grow.
Rent contracts have gotten more creative and unique over the last few decades but most agreements take on one of two general forms - crop shares or cash rents.
Crop shares - or share cropping depending on your location- was the most popular way to rent ground for a long time. This form of rent allows the landowner and farmer to share in the risk, and the reward, of farming.
Many crop shares today are still on a standard 50/50 agreement where the landlord and farmer split the costs of putting in the crop, the land owner provides the land and the farmer the equipment and labor, and they then split whatever crop is raised off the farm half and half, or 50/50.
Another common crop share version is a different split such as an 80/20 or 70/30 share where the farmer covers all costs of the crop and pays the landowner the agreed upon share of the crop as rent.
In the last decades, the cash rent agreements have become more popular. Some of these contracts can become very complex with multiple payments, price averages, yield bonuses and more but the concept of cash renting is largely the same.
The farmer pays the agreed upon rent, sometimes in the fall, sometimes in the spring, and sometimes in two payments in fall and spring, and the farmer keeps 100% of the crop. The farmer takes on all of the risk and all of the reward with growing a crop.
Matt told me that he could probably rent my sixty acres for to another farmer for $100 an acre - so he would agree to rent it to me for $150! (By the time I harvest this crop he will be wishing he charged me more!)
Now that I have my 60 acres "rented", I have some major decisions to make on seed, fertilizers, crop insurance and more before it's time to plant.
Stay tuned!
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