Paul Gonzalez10
Member
17 messages
joined Aug 2017
I won't go around quoting everyone here—it’s a waste of time. Let’s look at the reality: there are plenty of farmers out there managing 250 acres of wheat—or corn, soy, or sunflower, if you prefer, but let's stick with wheat for the sake of argument. If you asked me which single intervention would make the most impact, I’d choose herbicide application every single time. It’s the one thing that actually matters. If they can manage a decent yield from that, they might actually earn enough to cover the costs of tilling, prepping, planting, and harvesting. After all that work, they could potentially walk away with a subsidy of maybe $300,000—though, of course, that gets eaten up by corporate income tax. And let's be honest about the unfairness here: whether you're running a small family farm or a larger operation, being hit with a 40% tax rate is absolute madness. Ideally, those folks should also get access to modern machinery to actually make the labor manageable. Of course, that logic only holds water in places where land lease rates aren't astronomical. $133 Yeah, well—there are plenty of fields like that all over the USA.
Coming from the Midwest—where things actually make sense—there is absolutely no way that model works. At the end of the day, you have to actually turn a profit. $933 So, we're calling this an incentive—for what exactly? It certainly doesn't feel like one. $750 It's already happened. $603 Well, it’s alright—there are a few little perks tucked in there, but let's just say we should look at the whole package together. $650 If you want to pull that kind of money in—we’re talking serious capital here—you really have to earn it. $283 It’s all a bit much without some kind of incentive—honestly, if you want to actually pull in those kinds of numbers, you need a real reason to move. $283 Just pouring seed isn't enough anymore—you have to put in more work just to break even. Once you finally hit that point, you’re basically sitting at zero. To actually see a profit, you have to pull in at least that much extra, and even then, your actual earnings per acre end up being pretty slim. $233 You can't make this work long-term—it’s a losing game. You either have to farm massive acreage just to stay in the black, or you'll find yourself underwater within a few years. Between unpredictable ice storms, droughts, or a piece of machinery snapping shut and requiring a repair bill that costs more than the equipment itself, you're constantly one bad break away from needing to take out another loan just to survive.
Look, if you actually want to survive—let alone turn a profit—under the current economic climate (and trust me, looking at how things are trending in Germany, it’s only going to get much worse), you have to go all in. I’ve already laid out exactly what that entails, but there's a massive catch: this only works if you’re inheriting a solid foundation from your father or grandfather. If no one in your family has ever touched this business and you’re starting from absolute zero, my advice is simple: don't even bother with farming. You’ll spend your entire life just working to pay off the equipment—what I like to call "working for the iron." However, if someone actually left you something tangible to work with, then yes, you can make money—but you’re going to have to work your tail off to do it. All those little schemes people talk about—planting a few crops, doing a couple of operations, and just chasing government subsidies—that's nothing but pure nonsense. At least around here, where land leases are what they are, it's a fool's errand. $933 (private lands).
When it comes to consolidating land, you shouldn't be surprised if a boss like Mark approaches you—or if you end up at his doorstep—with a deal that sounds absolute. He’ll tell you that you’re going to manage his acreage and nobody else's. It sounds straightforward, but let's be real—there’s always a catch. We actually tried testing the waters with a small plot that sat right between our two properties, and once that guy showed up, we were left with nothing. Sure, there are plenty of reasonable people out there who play by the rules, but those types are the exception, maybe two or three in a hundred. The way I handle consolidation is simple: I wait for larger parcels to hit the market, or if the owner is dealing directly with me, I buy them then. Honestly, there isn't any other way to do it.
The whole concept of subsidies—though they didn't call them that back then—actually dates back to around 1947 in the Black Forest region of Germany. The local farmers there were facing a brutal reality: their yields simply couldn't compete with the massive harvests coming out of Southern Germany or central Germany. It just wasn't worth the grind. If a factory worker was pulling in 500 Marks, a farmer might struggle to scrape together 100 Marks—mostly because food prices weren't high enough to offset their low output. Faced with that math, people just packed up and headed for the cities, abandoning the land entirely. To stop that exodus, the government stepped in with what we now recognize as agricultural subsidies based on acreage. Suddenly, staying on the farm actually made sense—it allowed a farmer to match a factory wage, and it provided an extra cushion on top of that. There was also a clever secondary benefit: it kept consumer prices stable. Instead of forcing a systemic 20% hike in wheat prices just to ensure farmers could turn a profit—which would have sent bread prices skyrocketing at the grocery store—the subsidy bridged the gap without hitting the customer's wallet.
The issue with today's incentive is pretty straightforward—it's hard to get excited when Wheat has been stuck at this price point for basically fifteen years now. $0.33 The incentive fluctuates—sometimes by a few cents, sometimes more—but it’s clearly dropped. Given that shift, I have to wonder: what exactly was the logic behind bread prices dropping from 2?$1.00 Fifteen years ago, we were looking at one price—now, we’re staring at seven times that amount. Look, I get it: wages have climbed, commercial rent for a bakery has shot up, utility bills are through the roof... I follow the logic there. But it is sheer madness that bread prices have spiked by 300% while the cost of wheat has stayed virtually stagnant. Just imagine for a second what would happen if those government subsidies were scrapped. Let’s be real—those crooks in Washington would find a way to pocket that money regardless of how you spin it. If the subsidy disappeared, instead of seeing a modest 15% increase in costs, small businesses would be left footing the entire bill just to stay afloat. Honestly? If I were running a shop under those conditions, I don't know if I'd even show up to work for a plate of fish. And here is the kicker: instead of the price of bread rising by a reasonable 15%, you'd have all these middlemen, wholesalers, and bakery owners spinning a massive yarn about how much "costs" have increased. They wouldn't mention the 15% loss—they'd claim a 40% hike. In the end, the bread wouldn't go up by 40%; it would likely jump by 60%. So, instead of a 15% increase, we'd end up paying 60% more anyway. It's a rigged game. $2.25 rather than $3.75. there you have it...
