West of Mpls MN about 50 miles on Hwy 12 | My first opportunity to crop farm was presented to me by a neighbor lady who asked if I wanted to share rent her not the "best" land 40 acres instead of my dad the spring of my freshman year of high school back in 1979. I literally used my life savings including my confirmation money to buy bin run soybean seed from my dad. Fast forward 46 years to the spring of 2025 I will be handing the financial farming torch over to my nephew who wants to expand his farming efforts...My job description will become senior advisor when asked/banker/tractor driver hopefully until the day I die...Does that mean I'm retired?
We have been transitioning for a decade by him taking over some of the land I had been renting. He has been using some of my machinery in exchange for providing me with some labor. He has also been expanding his cow/calf operation which I have had very limited involvement in.
My nephew will be renting my land from me as well as the remaining land I was renting from my mother, (his grandmother) as well the remaining rented land from neighbors I have been farming which includes the 40 acres that I first rented back in 1979. My nephew also had the opportunity to rent some additional land from a couple long time neighbors whose previous renter decided to let the land go this spring. My nephew will experience about a 700 acre increase in tillable land. Some of the rented land is not the "best" land for around here and the amount of rent reflects that fact.
My nephew and I are in the process of coming to purchase price/finance terms on my depreciated out/paid for line of machinery. I consider my machinery as being a well taken care of mid 2000s vintage "affordable" line of machinery that will easily accommodate the requirements to successfully farm 1500 + acres including grain dryer/handling equipment. My machinery is "field ready" but will require ongoing maintenance including big ticket items like tires and possibly tracks within the next five years to remain reliable.
We're thinking somewhere between $200,000.00 and $400,000.00 depending on what my nephew feels he wants/needs/can afford will be the agreed upon purchase price for the machinery. What machinery my nephew doesn't want will be sold on Steffes auction. I'm not sure what to do about the 120,000 bushels of grain storage and semis. My nephew will be making interest and principal payments to me for the machinery. Finacing for anything else will have to come from someone other than me because like my dad used to say..."I'm tired of putting it all on the line every year to make living."
My nephew is married, has two kids. He owns about 120 acres including some run-down livestock buildings. The house is a pretty decent remodeled farmhouse that will require ongoing remolding. He also owns some row crop machinery and livestock equipment including one semi along with his cow/calf herd. I have no idea if any money is owed on these assets. Technically I have "helped" my nephew acquire these assets by giving my nephew a VERY good deal on our, my machinery trade for his labor agreement the past decade...one year I even bought all his fuel.
Honest question. Given the current farming environment, am I, his grandmother, and our neighbors giving my nephew an opportunity to succeed or fail?
ETA...more information
Edited by CMN 3/21/2025 13:43
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