23 ms·

I own the farm and farm it in Illinois. I owe the land through an LLC, because farming is dangerous and I don't want to go bankrupt if somebody sues me. Farms a

I own the farm and farm it in Illinois. I owe the land through an LLC, because farming is dangerous and I don't want to go bankrupt if somebody sues me. Farms are expensive and hard to subdivide, so people will put them into a legal entity and pass down to the next generation via a trust. All of my neighbors are doing the same, so we're all counted as "not farmers" here Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. The margins get better as you get bigger but still not great. Many of the buyers keep growing their farms because it's a status symbol. Everybody in your area will instantly know you're a big wig if you're one of the X family who has 2,000 acres all without the ick that comes with running other businesses. You can't buy that kind of status in my community with anything other than land.

mbreese 1y ago
It's buried in a figure legend, but the Tribune does acknowledge this too: > Note: The 12 selected counties had some of the highest cash rents in the state. For the purposes of this analysis, a business entity was defined as an organization with an LLC, Inc, LTD, Co, Corp, LP or LLP tag. This land is not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses. Edit: apparently not that buried...
- spyspy 1y ago
  It's not buried anywhere, it's literally the next paragraph after the lede. > These acres are not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses because they offer tax benefits and externalize losses.
  - mbreese 1y ago
    So it is... Chalk that up to my science reading skills -- I skimmed the text and skipped quickly to the charts, figures, and legends...
    - ASalazarMX 1y ago
      This is a use case where I think a current LLM shines. Ask it to summarize the important points of n papers, and slow read only the ones that pique your interest. It won't be perfect, but it will save you a ton of time while letting you focus on the things that need more attention.
      - freeopinion 1y ago
        I'm not anti-LLM even if the following statement sounds like it. I don't trust LLMs, even to summarize for me. I have to fact-check every single statement. For instance, if I ask ChatGPT, "Is PLA more dense than ABS?" it answers, "No, PLA is not more dense than ABS." Those are direct quotes. In the third paragraph, ChatGPT says, "So technically, PLA is denser than ABS, not less — I misspoke earlier." I find LLMs good for using words that I didn't think of. I can then reword a search to get better search results. To be fair, the cherry-picked example I used above sounds a lot like a human. Humans make such mistakes and corrections. If a human had given me that response, I would shrug and ask more questions. But it would make that human not be my go to source. It makes me shudder to think about code that is written in such a manner.
        tialaramex 1y ago
        > It makes me shudder to think about code that is written in such a manner. Often it has the property which was good enough for generations of C and C++ programmers, it compiles. Does it work? Eh. Do the tests, if there even are tests, check anything useful? Eh. The focus on "it doesn't matter so long as it compiles" justifies everything up to IFNDR†, the explicit choice in C++ that if what you've written is nonsense but it would not be easy to modify the compiler to notice, just don't worry about it and say it's somebody else's problem. † "Ill-formed, No Diagnostic Required" these words or near equivalent occur frequently in the ISO definition of the language.
        dylan604 1y ago
        A human that makes a mistake, catches it, corrects it and apologizes is someone I'd much rather interact with than someone that makes a mistake, catches it, and doubles down on the mistake that I then later discover the issue would be the person I would not be my go to source. Mistakes happen. If they are honest mistakes, then we can deal with it. If they are deliberate mistakes, well, we can deal with that too but in a different manner. The problem that I have is answering something in a confident manner when it's really a hedge to not sound unsure. People apparently have issues with an unsure bot. I'd much rather have a response like, "I'm not positive, but I think PLA is less dense than ABS" for the wiggle room of being able to come back later with "So technically, PLA is more dense than ABS". Even if the bot doesn't figure it out, by phrasing that way, you're clued in on what to fact check
libraryofbabel 1y ago
> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. Non-judgmental curious question: why do you keep doing it? (As opposed to selling the land and buying tbills.)
- appreciatorBus 1y ago
  > the ick that comes with running other businesses Also non-judgmental curious question: what is this "ick" related to non-farming businesses?
  - fundad 1y ago
    I think it's the way the original poster looks down people running other businesses.
  - 9rx 1y ago
    I own both a farm business and non-farm business. I feel the "ick" he talks about. I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people... In farming, it is all laid out for you. Prices are already set in Chicago. The buyer is always there. You grow the product, deliver it, and that's that. These days, with the way technology has gone, you might not even interact with another person in the process.
    - dataflow 1y ago
      > I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people... What about all the non-organic farming, use of pesticides/antibiotics/etc., poor treatment of animals (sometimes), water waste in some cases (like almonds in CA), being beholden to & inevitably supporting the wonderful companies that are John Deere and Monsanto, having to use proprietary seeds and IP for such a basic human need, etc.? Some of our largest problems on the planet trace back to modern industrial farming. To be clear, I love and respect farmers a ton, my comment isn't about them at all. They're amazing and hardworking and anybody in the the business would be dealing with the same problems. I'm just talking about the purity of the business itself that you're talking about. The idea that the job is somehow so morally pure compared to all the other jobs baffles me. Your average local job (waiter, cashier, postal delivery worker, janitor, etc.) would seem to have a much more direct positive and impact on people's happiness and much less of an opportunity to take advantage of other beings, as you put it.
deleted 1y ago
[deleted]
pfannkuchen 1y ago
Land does weather inflation quite a bit better than T bills do, though.
- lotsofpulp 1y ago
  Some land does. A lot of land does not.
  - pfannkuchen 1y ago
    I think this is strictly not a true statement? Land value can decrease in real terms at the same time inflation is happening, sure. But it isn’t revalued by inflation in the way that a contract denominated in the inflationary currency is. Can you explain more about what you mean?
    - lotsofpulp 1y ago
      I don’t understand what your comment could mean. You buy land at time t for price x. You sell land at time t+1 for price y. If (y-x)/x is is less than the same calculation for whatever other asset you would have bought (I would use sp500), then you lost money.
      - pfannkuchen 1y ago
        I didn’t say that land was as good as the s&p at appreciating in value. That is a completely different claim which I wouldn’t assert. S&P has appreciated considerably more than inflation, right? So saying that something does or doesn’t track inflation is completely different from whether you lost money compared to if you’d instead gone with the s&p.
  - quickthrowman 1y ago
    Agricultural land you can cultivate certainly does, particularly irrigated land. Land in the desert with zero economic value (think Slab City) probably does not keep up with inflation.
- 1y ago
9rx 1y ago
> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit Well, it is ultimately a real estate business. The "hundred grand" in profit is really there only to support the mortgage payments — meaning that's what other farmers are counting on, so they're going to drive the prices down to that point. It is like a tech startup. You are counting on the assets increasing in value when you exit. That is where the profit will eventually come from, hopefully. It is not a business for everyone, but I like it. > Many of the buyers keep growing their farms because it's a status symbol. And because the fun parts of the job end too quickly when you don't have enough acres. I'd at least like to double my acreage. That is where I think I'd no longer be in a position of "That's it? I want to keep going!" and instead "That was fun, but I think I've had enough." That said, the machines keeps getting bigger, whether the farmer likes it or not, so perhaps in that future I'll need even more land to satisfy the pangs.
- dylan604 1y ago
  If you don't need a couple of million dollars worth of tractors, combines, and other equipment that are all driven by GPS then you don't have enough acres.
  - sandworm101 1y ago
    Lol, a couple million. A single combine can easily be 1mil. And when you need them, you need more than one.
    - dylan604 1y ago
      right, so a couple million. you must be one of those poors that think a couple means exactly two. when you're rich AF, you toss a couple million around to mean plebe monies. too bad farmers aren't rich AF. when you have to use the farm as collateral for the tractors, you gotta ask if we're doing something wrong
  - dzhiurgis 1y ago
    Do you need to buy them or can they be hired / outsourced? I guess they all are needed at roughly same time and cannot be easily transported huge distances.
yieldcrv 1y ago
> all without the ick that comes with running other businesses can you elaborate on this perception?
- Loughla 1y ago
  As a farmer my customer is the grain elevator, co-op, or sale barn. I don't have to hustle for sales, just play the market. At least when I still farmed that's what it was. I answered to myself, not to customers or clients.
  - yieldcrv 1y ago
    All commodities extraction/producing businesses are like that And there are more outside of the commodities space Well, thanks for pointing out what may be a common perspective amongst farmers, I think I prefer other businesses without the ick of running a farm
- smeeger 1y ago
  its ignorant slop.
- forkeep 1y ago
  [dead]
travisennis 1y ago
I was just looking at a GIS map yesterday for my area and noticed that nearly every field was owned by an LLC and/or trust. Didn't think much of it at the time until I read this.
- lotsofpulp 1y ago
  In richer parts of town, many houses will be in trusts also. It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court. Plus in the states and wealth levels that many people on this website have, it is also a no brainer to save on taxes.
  - toast0 1y ago
    > It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court. What I keep hearing from experienced estate attorneys is that California probate court is onerous and worth a lot of effort to avoid, but other state's have reasonable probate; it might still be worth it to avoid probate, but it's not such a big deal. OTOH, dealing with assets in a revocable trust can be a PITA while you're still alive and may not give much benefit while you're living either. If you're not in California, it's worth taking stock of the situation before you use California biased advice. Having an estate in trust may not actually save on taxes either. Yes, you'll avoid probate fees in California, which is significant. But your estate will still pay estate tax. Otherwise, if an irrevocable trust holds the assets, it pays the taxes, and trusts have very abbreviated brackets; your heirs might well pay less income tax holding the property themselves. When your heirs/beneficiaries die and their heirs become the new beneficiary, that's not subject to estate tax, which is great, but as a result it doesn't get a step up in basis. If the trust is large relative to the estate tax exemption, it's beneficial to not pay estate tax; if not, it's more beneficial to get a step up in basis. Certainly, in some situations, trusts are more tax efficient, but you have to actually look at your situation to see. Default everyone should have a trust assumptions add a lot of senseless confusion and delay to the people who don't actually get a benefit from it. There are asset protection benefits from trusts as well, and it's reasonable to consider those depending on the situation as well. Holding a farm in a trust or llc makes a lot of sense to me, because it makes it easier to split ownership without dividing the farm.
SoftTalker 1y ago
Yep I own one rental house and it's in an LLC. Very common for any property used as a business to have a business owner of record.
insane_dreamer 1y ago
Yeah, I think it would have been more useful if the Tribune had been able to determine "how many people are farming on land which they do not own" whether directly or through an LLC/company. The amount of land owned by "out of state" owners may help answer this question but they don't give a number for that either. (A local farmer could also register their LLC out of state though I'm not sure whether that's beneficial or not.)
- mindslight 1y ago
  Setting up an LLC as foreign to the state you're living in likely won't save you on fees (since you'll register it as a foreign entity in your own state, especially for holding title to real estate), but it can open up additional features not offered by your state's laws, like series LLCs. Although as far as I know it's an open question as to whether the protections of Series LLCs will be respected by other states or just discarded when you try to use them. (I'm not a member of any guilds)
deleted 1y ago
[deleted]
comprev 1y ago
This is probably similar in UK - although this is pure speculation. A limited company owning the "land" which is then leased to the "farm" business that works it. Possibly a "group" parent company is owned by the actual farmer. I'm sure there will be good tax and legal protection reasons to structure farms in this way, not forgetting various government schemes which bring in revenue via grants and tax breaks.
pinkmuffinere 1y ago
I don’t know how to say this without seeming rude, but a few hundred acres is very small. 500 acres is less than a square mile. Is there something about your community that makes farms of that size more common than normal? Edit: my (extended) family has a farm, and they cultivate X0,000 acres every year, though they own far less. They do plant a larger area than most for their community, but they’re not planting 20x their neighbors.
- potato3732842 1y ago
  You're projecting "western desert but we pretend like it isn't" norms onto "eastern rich arable land" areas.
  - pinkmuffinere 1y ago
    Interesting! It shocks me that you can run a farm on less than a square mile, I can practically plant that by hand, lol
  - akgoel 1y ago
    On a recent Odd Lots episode, they interviewed a Canadian lentil farmer. His claim was that a family of 3 (Father, Mother, Daughter) could farm 1200 acres of lentils with time left over due to modern automation. So I guess it would depend on the automation level of the kind of crops you’re planting.
- arbor_day 1y ago
  Yeah, it's sorta both big and small. It's small in that you can't support a family farming 500 acres of corn/beans. It's big in that buying 500 acres would cost $5M - $10M, that's real money!
  - pinkmuffinere 1y ago
    If you don't mind me asking, how do you make it work for yourself? Are you single, so you don't need more? Or perhaps you're closer to a 'hobbyist' farmer? (although 500 acres is also well beyond a hobby haha)
WalterBright 1y ago
> so we're all counted as "not farmers" here Reminds me of when, a few years ago, the outrage headlines were "half of all US corporations didn't pay income tax last year!" When one dug into it, it was because half the corporations didn't make any money that year.
smeeger 1y ago
there is no type of farming that will beat t bills? none? people arent working on ideas to make farming more profitable? i just dont believe that american farms, which cover unimaginably vast areas and are unimaginably numerous, could be continuously funded by banks if they were losing money. thats impossible. subsidies cant explain it. i think youre lying or leaving out some context
- 9rx 1y ago
  > there is no type of farming that will beat t bills? none? There is no type of farming that beats t-bills today if you buy the land today. There is a saying in farming: "Buying farmland never makes sense the day you buy it." The land you bought 50 years ago is looking pretty damn good now, though. The economic bet farmers not cashing out (or buying in) are making is that trend will continue.
ethan_smith 1y ago
This is a critical insight - the statistics likely count many actual farmer-owners as "non-farmers" due to LLC/trust structures, which significantly distorts the narrative about ownership concentration in agriculture.
burnt-resistor 1y ago
Ouch. Better in some ways and worse than others than the restaurant business, I reckon. My mom's relatives have a long horn "farm" complying with the minimum requirements to claim various tax exemptions. :sigh: Their family business is aviation real estate, services, equipment, and aircraft. I can walk to where sorghum and field corn is grown here in hill country because that's the major trade in these parts, apart from selling land for new housing developments.
tim333 1y ago
My dad also had a farm in the UK owned through a company for tax reasons. Farming was a loss maker, land appreciation made loads of money.
dzhiurgis 1y ago
How does vertical vs horizontal integration work? I imagine most of specialized gear doesn't make sense to acquire until you are at some scale. Cute it's a status symbol. But that just screams market inefficiency ergo everyone worse off.

mbreese 1y ago

It's buried in a figure legend, but the Tribune does acknowledge this too: > Note: The 12 selected counties had some of the highest cash rents in the state. For the purposes of this analysis, a business entity was defined as an organization with an LLC, Inc, LTD, Co, Corp, LP or LLP tag. This land is not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses. Edit: apparently not that buried...

spyspy 1y ago
It's not buried anywhere, it's literally the next paragraph after the lede. > These acres are not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses because they offer tax benefits and externalize losses.
- mbreese 1y ago
  So it is... Chalk that up to my science reading skills -- I skimmed the text and skipped quickly to the charts, figures, and legends...
  - ASalazarMX 1y ago
    This is a use case where I think a current LLM shines. Ask it to summarize the important points of n papers, and slow read only the ones that pique your interest. It won't be perfect, but it will save you a ton of time while letting you focus on the things that need more attention.
    - freeopinion 1y ago
      I'm not anti-LLM even if the following statement sounds like it. I don't trust LLMs, even to summarize for me. I have to fact-check every single statement. For instance, if I ask ChatGPT, "Is PLA more dense than ABS?" it answers, "No, PLA is not more dense than ABS." Those are direct quotes. In the third paragraph, ChatGPT says, "So technically, PLA is denser than ABS, not less — I misspoke earlier." I find LLMs good for using words that I didn't think of. I can then reword a search to get better search results. To be fair, the cherry-picked example I used above sounds a lot like a human. Humans make such mistakes and corrections. If a human had given me that response, I would shrug and ask more questions. But it would make that human not be my go to source. It makes me shudder to think about code that is written in such a manner.
      - tialaramex 1y ago
        > It makes me shudder to think about code that is written in such a manner. Often it has the property which was good enough for generations of C and C++ programmers, it compiles. Does it work? Eh. Do the tests, if there even are tests, check anything useful? Eh. The focus on "it doesn't matter so long as it compiles" justifies everything up to IFNDR†, the explicit choice in C++ that if what you've written is nonsense but it would not be easy to modify the compiler to notice, just don't worry about it and say it's somebody else's problem. † "Ill-formed, No Diagnostic Required" these words or near equivalent occur frequently in the ISO definition of the language.
      - dylan604 1y ago
        A human that makes a mistake, catches it, corrects it and apologizes is someone I'd much rather interact with than someone that makes a mistake, catches it, and doubles down on the mistake that I then later discover the issue would be the person I would not be my go to source. Mistakes happen. If they are honest mistakes, then we can deal with it. If they are deliberate mistakes, well, we can deal with that too but in a different manner. The problem that I have is answering something in a confident manner when it's really a hedge to not sound unsure. People apparently have issues with an unsure bot. I'd much rather have a response like, "I'm not positive, but I think PLA is less dense than ABS" for the wiggle room of being able to come back later with "So technically, PLA is more dense than ABS". Even if the bot doesn't figure it out, by phrasing that way, you're clued in on what to fact check

libraryofbabel 1y ago

> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. Non-judgmental curious question: why do you keep doing it? (As opposed to selling the land and buying tbills.)

appreciatorBus 1y ago
> the ick that comes with running other businesses Also non-judgmental curious question: what is this "ick" related to non-farming businesses?
- fundad 1y ago
  I think it's the way the original poster looks down people running other businesses.
- 9rx 1y ago
  I own both a farm business and non-farm business. I feel the "ick" he talks about. I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people... In farming, it is all laid out for you. Prices are already set in Chicago. The buyer is always there. You grow the product, deliver it, and that's that. These days, with the way technology has gone, you might not even interact with another person in the process.
  - dataflow 1y ago
    > I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people... What about all the non-organic farming, use of pesticides/antibiotics/etc., poor treatment of animals (sometimes), water waste in some cases (like almonds in CA), being beholden to & inevitably supporting the wonderful companies that are John Deere and Monsanto, having to use proprietary seeds and IP for such a basic human need, etc.? Some of our largest problems on the planet trace back to modern industrial farming. To be clear, I love and respect farmers a ton, my comment isn't about them at all. They're amazing and hardworking and anybody in the the business would be dealing with the same problems. I'm just talking about the purity of the business itself that you're talking about. The idea that the job is somehow so morally pure compared to all the other jobs baffles me. Your average local job (waiter, cashier, postal delivery worker, janitor, etc.) would seem to have a much more direct positive and impact on people's happiness and much less of an opportunity to take advantage of other beings, as you put it.

deleted 1y ago

[deleted]

pfannkuchen 1y ago

Land does weather inflation quite a bit better than T bills do, though.

lotsofpulp 1y ago
Some land does. A lot of land does not.
- pfannkuchen 1y ago
  I think this is strictly not a true statement? Land value can decrease in real terms at the same time inflation is happening, sure. But it isn’t revalued by inflation in the way that a contract denominated in the inflationary currency is. Can you explain more about what you mean?
  - lotsofpulp 1y ago
    I don’t understand what your comment could mean. You buy land at time t for price x. You sell land at time t+1 for price y. If (y-x)/x is is less than the same calculation for whatever other asset you would have bought (I would use sp500), then you lost money.
    - pfannkuchen 1y ago
      I didn’t say that land was as good as the s&p at appreciating in value. That is a completely different claim which I wouldn’t assert. S&P has appreciated considerably more than inflation, right? So saying that something does or doesn’t track inflation is completely different from whether you lost money compared to if you’d instead gone with the s&p.
- quickthrowman 1y ago
  Agricultural land you can cultivate certainly does, particularly irrigated land. Land in the desert with zero economic value (think Slab City) probably does not keep up with inflation.
1y ago

9rx 1y ago

> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit Well, it is ultimately a real estate business. The "hundred grand" in profit is really there only to support the mortgage payments — meaning that's what other farmers are counting on, so they're going to drive the prices down to that point. It is like a tech startup. You are counting on the assets increasing in value when you exit. That is where the profit will eventually come from, hopefully. It is not a business for everyone, but I like it. > Many of the buyers keep growing their farms because it's a status symbol. And because the fun parts of the job end too quickly when you don't have enough acres. I'd at least like to double my acreage. That is where I think I'd no longer be in a position of "That's it? I want to keep going!" and instead "That was fun, but I think I've had enough." That said, the machines keeps getting bigger, whether the farmer likes it or not, so perhaps in that future I'll need even more land to satisfy the pangs.

dylan604 1y ago
If you don't need a couple of million dollars worth of tractors, combines, and other equipment that are all driven by GPS then you don't have enough acres.
- sandworm101 1y ago
  Lol, a couple million. A single combine can easily be 1mil. And when you need them, you need more than one.
  - dylan604 1y ago
    right, so a couple million. you must be one of those poors that think a couple means exactly two. when you're rich AF, you toss a couple million around to mean plebe monies. too bad farmers aren't rich AF. when you have to use the farm as collateral for the tractors, you gotta ask if we're doing something wrong
- dzhiurgis 1y ago
  Do you need to buy them or can they be hired / outsourced? I guess they all are needed at roughly same time and cannot be easily transported huge distances.

yieldcrv 1y ago

> all without the ick that comes with running other businesses can you elaborate on this perception?

Loughla 1y ago
As a farmer my customer is the grain elevator, co-op, or sale barn. I don't have to hustle for sales, just play the market. At least when I still farmed that's what it was. I answered to myself, not to customers or clients.
- yieldcrv 1y ago
  All commodities extraction/producing businesses are like that And there are more outside of the commodities space Well, thanks for pointing out what may be a common perspective amongst farmers, I think I prefer other businesses without the ick of running a farm
smeeger 1y ago
its ignorant slop.
forkeep 1y ago
[dead]

travisennis 1y ago

I was just looking at a GIS map yesterday for my area and noticed that nearly every field was owned by an LLC and/or trust. Didn't think much of it at the time until I read this.

lotsofpulp 1y ago
In richer parts of town, many houses will be in trusts also. It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court. Plus in the states and wealth levels that many people on this website have, it is also a no brainer to save on taxes.
- toast0 1y ago
  > It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court. What I keep hearing from experienced estate attorneys is that California probate court is onerous and worth a lot of effort to avoid, but other state's have reasonable probate; it might still be worth it to avoid probate, but it's not such a big deal. OTOH, dealing with assets in a revocable trust can be a PITA while you're still alive and may not give much benefit while you're living either. If you're not in California, it's worth taking stock of the situation before you use California biased advice. Having an estate in trust may not actually save on taxes either. Yes, you'll avoid probate fees in California, which is significant. But your estate will still pay estate tax. Otherwise, if an irrevocable trust holds the assets, it pays the taxes, and trusts have very abbreviated brackets; your heirs might well pay less income tax holding the property themselves. When your heirs/beneficiaries die and their heirs become the new beneficiary, that's not subject to estate tax, which is great, but as a result it doesn't get a step up in basis. If the trust is large relative to the estate tax exemption, it's beneficial to not pay estate tax; if not, it's more beneficial to get a step up in basis. Certainly, in some situations, trusts are more tax efficient, but you have to actually look at your situation to see. Default everyone should have a trust assumptions add a lot of senseless confusion and delay to the people who don't actually get a benefit from it. There are asset protection benefits from trusts as well, and it's reasonable to consider those depending on the situation as well. Holding a farm in a trust or llc makes a lot of sense to me, because it makes it easier to split ownership without dividing the farm.

SoftTalker 1y ago

Yep I own one rental house and it's in an LLC. Very common for any property used as a business to have a business owner of record.

insane_dreamer 1y ago

Yeah, I think it would have been more useful if the Tribune had been able to determine "how many people are farming on land which they do not own" whether directly or through an LLC/company. The amount of land owned by "out of state" owners may help answer this question but they don't give a number for that either. (A local farmer could also register their LLC out of state though I'm not sure whether that's beneficial or not.)

mindslight 1y ago
Setting up an LLC as foreign to the state you're living in likely won't save you on fees (since you'll register it as a foreign entity in your own state, especially for holding title to real estate), but it can open up additional features not offered by your state's laws, like series LLCs. Although as far as I know it's an open question as to whether the protections of Series LLCs will be respected by other states or just discarded when you try to use them. (I'm not a member of any guilds)

deleted 1y ago

[deleted]

comprev 1y ago

This is probably similar in UK - although this is pure speculation. A limited company owning the "land" which is then leased to the "farm" business that works it. Possibly a "group" parent company is owned by the actual farmer. I'm sure there will be good tax and legal protection reasons to structure farms in this way, not forgetting various government schemes which bring in revenue via grants and tax breaks.

pinkmuffinere 1y ago

I don’t know how to say this without seeming rude, but a few hundred acres is very small. 500 acres is less than a square mile. Is there something about your community that makes farms of that size more common than normal? Edit: my (extended) family has a farm, and they cultivate X0,000 acres every year, though they own far less. They do plant a larger area than most for their community, but they’re not planting 20x their neighbors.

potato3732842 1y ago
You're projecting "western desert but we pretend like it isn't" norms onto "eastern rich arable land" areas.
- pinkmuffinere 1y ago
  Interesting! It shocks me that you can run a farm on less than a square mile, I can practically plant that by hand, lol
- akgoel 1y ago
  On a recent Odd Lots episode, they interviewed a Canadian lentil farmer. His claim was that a family of 3 (Father, Mother, Daughter) could farm 1200 acres of lentils with time left over due to modern automation. So I guess it would depend on the automation level of the kind of crops you’re planting.
arbor_day 1y ago
Yeah, it's sorta both big and small. It's small in that you can't support a family farming 500 acres of corn/beans. It's big in that buying 500 acres would cost $5M - $10M, that's real money!
- pinkmuffinere 1y ago
  If you don't mind me asking, how do you make it work for yourself? Are you single, so you don't need more? Or perhaps you're closer to a 'hobbyist' farmer? (although 500 acres is also well beyond a hobby haha)

WalterBright 1y ago

> so we're all counted as "not farmers" here Reminds me of when, a few years ago, the outrage headlines were "half of all US corporations didn't pay income tax last year!" When one dug into it, it was because half the corporations didn't make any money that year.

smeeger 1y ago

there is no type of farming that will beat t bills? none? people arent working on ideas to make farming more profitable? i just dont believe that american farms, which cover unimaginably vast areas and are unimaginably numerous, could be continuously funded by banks if they were losing money. thats impossible. subsidies cant explain it. i think youre lying or leaving out some context

9rx 1y ago
> there is no type of farming that will beat t bills? none? There is no type of farming that beats t-bills today if you buy the land today. There is a saying in farming: "Buying farmland never makes sense the day you buy it." The land you bought 50 years ago is looking pretty damn good now, though. The economic bet farmers not cashing out (or buying in) are making is that trend will continue.

ethan_smith 1y ago

This is a critical insight - the statistics likely count many actual farmer-owners as "non-farmers" due to LLC/trust structures, which significantly distorts the narrative about ownership concentration in agriculture.

burnt-resistor 1y ago

Ouch. Better in some ways and worse than others than the restaurant business, I reckon. My mom's relatives have a long horn "farm" complying with the minimum requirements to claim various tax exemptions. :sigh: Their family business is aviation real estate, services, equipment, and aircraft. I can walk to where sorghum and field corn is grown here in hill country because that's the major trade in these parts, apart from selling land for new housing developments.

tim333 1y ago

My dad also had a farm in the UK owned through a company for tax reasons. Farming was a loss maker, land appreciation made loads of money.

dzhiurgis 1y ago

How does vertical vs horizontal integration work? I imagine most of specialized gear doesn't make sense to acquire until you are at some scale. Cute it's a status symbol. But that just screams market inefficiency ergo everyone worse off.