Land good investment but farming won't pay for it
By Jim Garrett
The family farm soon may be a thing of
the past as rising land and production costs
force more young farmers out of the
business, according to a UNL professor of
agriculture economics.
But family ties help, said Dr. Ron Han
sen. It's almost impossible to begin farming
without some tie-in, he said, despite a
college degree.
"It is extremely hard for a new graduate
without previous ties or leads into farming
or ranching to start on their own and make
it."
Very few men or women start out on
their own today in this business, he said.
With skyrocketing land prices, an acre of
land will not pay for itself against the
borrowed capital it takes to buy it.
"Another job, a livestock operation on
the side, additional income from an alter
native source all are needed to get
established and be successful in farming or
ranching in today's economic climate,"
Hanson said.
"There wars a time when land bought
with borrowed money would pay for it
self," he said, "but without help from a
family member, friend or someone else of
that nature, initial start-up is hard."
Need land to buy land
The farmer or rancher who already
owns land is in the best position to buy
more land, Hanson said. The owned-and-paid-for
land is used to buy and pay for
additional acres needed for expansion.
Those who start farming with no pre
vious equity or land to use as collateral,
can't make it, Hanson said.
"No one will finance them to buy the
land outright," he said.
Instead, the new farmer must have a
neighbor that will cash-rent a farm to him,
a friend willing to buy the farm for him or
somehow borrow the principal at a reduced
interest rate, Hanson said.
Dean of the UNL College of Agri
culture, Dr. TJE. Hartung, said he sees
fewer farms ahead in the future. There will
be a continued decline in the number of
farms, while an increase in the number of
acres per farm in the future, 'he said.
"The rate of change will be not as fast
as in the '60s," Hartung said, "but
optimisim still exists for the existence of
the traditional family farm."
But, Hartung said the family farm will
utilize more tools traditionally confined to
business such as incorporation of the
family farm.
Double major helps
The real growth will be in the realm of
agri-business. More urban students are pur
suing careers in the agri-business world, he
said.
There is also a push by the college
graduate in areas where business manage
ment and farming meet, he said, like the
direct management of a grain farm or hog
operation by an agricultural graduate, with
out owning it.
Hartung pointed out that due to some
of the uncertainity from today's economy,
students in agriculture are equipping
themselves with more educational back
ground across department lines in addition
to the straight college major in one field.
"If the economy gets too close, and the
profit margins drop too far, the family link
between students and their relatives will
prove to be very valuable tool," Hartung
said.
One of those students who depends on
links with family members is senior Scott
Kinkaid.
Kinkaid, who will be graduating this
spring with dual majors in ag economics
and ag honors, will join his father Elno on
the family farm, which is about 40 miles
north of Norfolk, Nebraska.
Kinkaid said when he first came to the
university, there wasn't any firm agreement
made about returning home to farm, but
his father said he would help him get start
ed if he chose to farm.
The elder Kinkaid presently farms
around 720 acres in com, oats and alfalfa,
and raises 200 head of cattle and 800 head
of hogs.
Last spring the two Kinkaids started a
partnership in the livestock business, which
the younger Kinkaid said he will use to
help get him started with farming.
Farm on family land
Kinkaid plans to rent a quarter section
his grandfather owned and farmed and now
belongs to his dad, plus any additional
ground he can find to rent near his father's
farm.
"It's kind of hard to find available
ground around," he said, "but it does come
available if you can afford to wait."
Kinkaid said he plans to work on his
dad's farm in exchange for using his
father's equipment, until he can build up
his own.
Scott, 21, said there were some guys
that went right into farming out of high
school, who are presently expanding their
operations around the Kinkaid farm.
And although college wasn't necessary
for him to farm, he said he wanted to im
prove himself in management and farming.
He said school is a valuable experience and
tool which will be needed in the demand
ing climate of the modern farm operator.
Obstacles for college grads
Yet as far as open opportunities for
college graduates to get started in farming,
Kinkaid said he sees many obstacles to be
overcome.
"There are many students in ag- college
choosing agri-business careers for the very
reason it is so hard to get started farming
from scratch," he said.
Other farm kids go into business instead
of farming.
Scott's brother Dale, 30, graduated in
1975 from the UNL College of Agriculture
with majors in agronomy and ag
economics. He recently started farming
with an older farmer south of Norfolk.
Scott said his brother didn't start farm
ing after college, but went to work for an
agricultural service company that sells
chemicals and fertilizers in Norfolk. When
the company changed management hands
Scott said, Dale started working for a farm
er he had applied fertilizer for.
The youngest Kinkaid said Dale Aill
help farm about 3,000 acres, growing
course grains and popcorn as well as live
stock. Room for one, not two
Scott said if his brother had gone into
farming with his dad after graduating,
going into farming himself would have
been difficult. The family farm may be in
the family, he said, but the economics can
only support so many people at one time.
"It wasn't until this year that I finally
made up my mind to go back and farm,"
Scott said. "There was always the option,
but really no formal agreement that was
previously decided upon."
Another UNL agriculture major with
previous ties to farming before coming to
college, is well on the way to an establish
ed career in farming.
Paul Mclntyre, a senior majoring in
agricultural economics, will graduate in
December and return to farming northeast
of Fullerton, Neb. where he has been
operating since a junior in high school.
Paul, 20, began farming his mother's
quarter section in 1976, and now rents an
additional 320 acres and raises a small herd
of cattle.
Mclntyre, who graduated from high
school in 1978, said he knew he was going
to farm before he went to college but
college was a necessity to be a successful
farm manager and owner.
Mclntyre, who currently has been farm
ing full time since 1976, and runs a custom
haying operation on the side, has been
averaging about 20 hours of classes a
semester.
College not necessary , but helps
Mclntyre said college wasn't needed to
get a foot in the door to farming but was a
time for evaluation education and decision.
He said college will provide him with the
necessary skills to profitably compete in
farming and an insurance policy in case he
can't always continue to farm.
He said he plans to pursue a supple
mentary career in land appraisal during
slack periods of the farming season.
"It will be sort of co-career-farming
and land appraisal," Mclntyre said," the
two occupations will exist simultane
ously." Mclntyre, who goes home on the week
ends and summers to work on his farm,
said the success of the family farm will de
pend on the farmer's ability to be a good
manager and exercise acceptable manage
ment agriculture decisions.
"The economy will eventually weed out
the poor manager," he said. Management
in the 1980s farming operations is going to
be a very vital and important element.
As far as getting a start in farming,
Mclntyre said the big obstacle is obtaining
investment and initial working capital.
"If the beginner can get a contract on
some ground without too much down, or
someone to help him buy his first piece of
land," then Mclntyre said, "the beginning
farmer probably can make a go of it."
"The one who goes too deep in debt
buying too much land or all new equip
ment in the beginning," he safd, "will have
a real tough time making it."
Farms need good management
If a farmer is a good manager, even if
there were three years of drought, he could
probably get out of the tough spot some
way. Mclntyre said it all relates back to
good management.
Mclntyre said that there are a lot of
farmers out there in their 50s, who will be
retiring soon, so the opportunity to get
started is there, but that waiting for the
right opining is hard.
The government could help family
farms, Mclntyre said, by providing legis
lation to ease the transition of a farm be
tween parents and their children without
large losses to inheritance tax.
Mclntyre said the Reagan administra
tion gives optimistic signs for the family
farmer.
"I'm opposed to the non-family cor
porate farm," he said, "I .hate to see
marginal grass and pastureland be broken
up just to develop a tax evasion."
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perspectives
Daily Nsbrtskan Photo
monday, february 16, 1981
