The daily Nebraskan. ([Lincoln, Neb.) 1901-current, February 16, 1981, perspectives, Page page 6, Image 14
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." 7V I w if M page 6 perspectives Daily Nsbrtskan Photo monday, february 16, 1981