Another BTO bites the dust

[malleefarmer]

A all to common story i suggest.

https://www.wsj.com/articles/two-brothers-tied-to-the-land-face-wrath-of-americas-farm-bust-1513615986

[Guest]

wow, 40 mil under water !bet it looked good from the road, though

[bgmb]

farmed 50,000 ac and only worth 16 million at the peak wow.

[Kinger]

Only owned 160 acres of it. Rest was rented.

Equipment would have been the only real equity. Even that sounds highly leveraged though.

[bucket]

Equipment has no equity .....it depreciates....to zero!!!!!!

[Kinger]

Yeah equity may be the wrong word.

Asset would likely be the better terminology.

Would actually only ever depreciate to what the scrap value of the machine is.

[bgmb]

I would imagine the only equity he would have would be profits from the good years of 6-7 dollar corn. article also says he was a potato and beet farmer. 50,000 ac of that crop mix would be pretty profitable on the way up.

[Guest]

Equipment has no equity .....it depreciates....to zero!!!!!!

lots of farm tractors that were bought used have appreciated . guess you haven't tried to buy a 20 year old tractor lately ! I know they're not real dollars anymore but it's the same for all things you are buying or selling . we bought a 1995 9270 case about 15 yrs ago for 59k with 3000 hrs , could easily get $70 k now with 4800 hrs . lots of examples like that . the worst beating is at Ritchie's after 1 or 2 years and green dealerships are causing that . land is definetly a better investment , but you need the riggin too, and lots of it , especially with our narrow little window here to grow a crop . just have a look at some farm sales with 10 year old well looked after iron , you'll find it's far from worthless

[farmaholic]

The lack of iron equity is probably because the iron is leased....pay to use.

[SASKFARMER3]

Oh but Canadian BTOs will survive

[farmaholic]

Back in 03-04 when the local BTO of the day(defined by what was considered a large farm for here at the time) hit the wall....all the land got bought up at the auction sale....and probably "averaged" close to what he paid for it. And all the land they rented found new tenants too.* I can't help but to wonder what would happen this time. We are at a dramatically different price level now compared to then. Most family farms here are reluctant to buy at the current prices, even though they may sound cheap to some people from other areas.

Recently, I said to one guy..."Do you want me put my money where my mouth is? Or will I get a chance to put my money where my mouth is?" No reply.

[farmaholic]

When the BTO goes bust, does it really matter as long as there's more feathers in their nests than when they started? Isn't that what businesses are supposed to do, make the manager's, directors and principals money? Is it a "personal" failure to pack it in if the venture fails, yet provided the upper echelon with more feathers in their nests when they quit?

[hobbyfrmr]

When the BTO goes bust, does it really matter as long as there's more feathers in their nests than when they started? Isn't that what businesses are supposed to do, make the manager's, directors and principals money? Is it a "personal" failure to pack it in if the venture fails, yet provided the upper echelon with more feathers in their nests when they quit?

Agreed.
"The farm" venture failed but those guys have a pile of cash squirreled away. Its just business.

[fjlip]

Heard this way, started with nothing so if end up with nothing, it was fun while it lasted.

[MBgrower]

just goes to show you, that the 'average' farm is likely to be wealthier than the local BTO.