A Purchased Life

It happens frequently, this informal tour giving. The phone rings and someone new to this locale or new to or considering farming asks to see how we manage our operation. Yes, it takes us away from our work, but we both enjoy helping newcomers and walking visitors around the farm. Sometimes we can be a bit too self-deprecating about our accomplishments, yet the people leave with an understanding of what they too can achieve, with hard work.

This particular day we’ve put our various to-dos on hold to spend a couple of hours escorting a young couple around our small-scale 50-acre farm. Over the years I’ve honed my remarks based on certain assumptions made from our initial phone call and on what I can glean from observing the visitors who have shown up for guidance. Today’s couple have indicated that they are just starting out. They have bought 30 acres in North Carolina (just an hour or so away) that had been misused, and they have moved into the property’s older home. They want to raise poultry for the farmers market and have decided on a goal of growing 100 birds a year for slaughter.

With the information provided — that they want to live a fairly self-sustaining life of raising their own vegetables and small livestock, along with developing a very modest business that will bring in enough to cover expenses, I’ve tailored my conversation to fit their needs.

My recommendations follow a predictable path: “Buy appropriate to your needs. Repair whenever possible. Grow and raise what you wish to eat, and sell the surplus. Be a part of your community.”

All of this goes down well; the two are gracious, easy to talk with, and somewhat knowledgeable about small, diversified farming. At some point I mention that they will need a tractor to accomplish much of the work around their property. And echoing those previous remarks, I say, “Get something older and therefore easier to repair. Look for something that comes with a few implements, like a bush hog.”

At this juncture the young woman mentions that they had just bought a brand new 75 horsepower tractor, complete with front-end loader, grappler, backhoe, bush hog, disc mower, rake, and baler. My jaw drops. I have clearly misread this couple. Instead of struggling newcomers looking to build a life of self-sufficiency, these two are rich or at least willing to go deep into debt.

When they leave, I do a little research. They have just spent $125,000-$150,000 on a tractor that is two to three times the horsepower needed for their land. For comparison, we bought our own first tractor, a 1962 35 horsepower Ford 800, for $1,500 (granted, in 1999). The image that immediately comes to my mind is the 269 horsepower Lamborghini Jeremy Clarkson (British TV’s Clarkson’s Farm) bought that was so big it wouldn’t fit in his barn. As for the worn-out 30 acres the couple purchased? They paid just under $1 million — for an acreage that sold for $100,000 12 years earlier. My brain frankly reels with too many unanswerable questions. The first of which is, how many chickens? As in, how many chickens will they need to raise, at lots of 100 a year, to pay for the tractor and land alone.

Well … if they raise and sell 100 birds a year at $15 each, it will take a whopping 733 years to pay off their core investment. Of course, it might be slightly longer if the chickens cost anything to raise (which they do) or if there is interest on the land or tractor purchase (which there will be unless they paid cash). Then there is the inevitable need to buy tools, diesel, fencing, and a thousand things not yet considered as needed, all of which might affect the timeline of repayment. Plus, let’s throw in those pesky things like taxes, clothes, cars, home repairs, insurance, health needs, and, even in the most self-sustaining household, groceries and beer. I quickly give up posing questions that have no acceptable answers.

It is no surprise that people have the urge to downscale their lives; it happens every day and seemingly with more frequency. What puzzles me is that it appears this young couple wants to purchase a downsized life, like they’re on some extravagant shopping trip, by spending over a million dollars. Why? Just so that they can sport a new co-op feed cap without the earning of it?

This interaction continues to raise more questions than can’t be answered. Stewardship, profitability, self-sustainability — all of these concepts that small farms wrestle with change into something else when they become just another commodity. Land, a house, the means to farm, each costs money. Of that there is no doubt. But if the buy-in to gross $1,500 (or even $50,000) a year is over a million, then something is seriously out of whack. When the value of the land alone has far outstripped what one might be able to earn from its productive use, what then?

A recent conversation I had with a county property assessor added another dimension to this upside-down acquisition. The assessor talked about newcomers to our area from California paying similar amounts for property as this young couple paid in North Carolina. The problem that arises with land being purchased at $1 million when it is valued at $100,000? Well, good luck getting insurance or even getting a loan to cover the full amount. (Getting a loan is actually a small stumbling block in these cases, since most of the recent arrivals are cash-flush from selling overpriced homes in their native states, although one might wonder how long that monetary surplus will last. Still, money spent is money earned, by someone.)

As always, I’m more interested in what these outrageous trends mean for local people. What happens to the displaced? Ask that and even more questions begin to surface, such as, what kind of farm policy does our country espouse if the buy-in for living a small-scale life of self-sufficiency is overpriced and unsustainable? Because ultimately this isn’t about a young couple of means. It is about all the other young working-class couples who have been squeezed out of the opportunity to buy and farm their own land. It’s a problem that has only accelerated as a relatively affluent urban class exits the cities in search of the “simple” rural life — not to work or steward the land in any meaningful way but merely to possess it, to buy the style of life for cold cash, play-acting on it, with a substantial cast of the now-dispossessed locals to choose from as background color to that newly purchased life.

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Reading this weekend: Of Farming and Classics (D. Grene) and A Splendor of Letters (N. Basbanes)

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4 thoughts on “A Purchased Life

  1. An interesting meeting. Not wishing to suggest the couple played you, but two things leave me scratching my head (on top of all the issues you bring out). Why if they already purchased new kit (with hay baling in focus) did they only offer they were interested in selling chicken (and so few as to be laughable in light of the investment made)?

    You looked into the land purchase, is there any evidence the property location is somewhere with potential development? Close to a freeway exit, close to civilization, or a very scenic area that could become 10 three acre plots for McMansions? I ask because the difference from $100,000 just 12 years ago to a cool million today makes me think something else is going on here. If they have more than a million to fund their shift then its either inheritance or relocation from somewhere like California (though I suppose lottery winnings might also qualify).

    These questions come to mind because a couple years ago I looked at a property with no house and only a battered old equipment shed (with a few pieces of what I considered salvageable equipment… but that’s another day’s matter). Anyway, I’d done some homework on the region’s land values and local characteristics (like those in the paragraph above). This particular piece was land locked (forcing one to obtain an easement for access). The price being asked was roughly 150% of what comparable soil would warrant further from town. The eastern boundary was actually the western village limit – a village within 10 minutes of the county seat. I was there in the middle of the summer and the current corn crop was in pretty decent shape – but there was no way the production would earn enough to make economic sense. So I asked the agent if he knew anything about development plans in the area. He did the toe kicks dirt thing and avowed that he wasn’t at liberty to comment on that. I took the conversation in some slightly different directions – and he quickly saw that I was still fishing for an answer for why this piece seemed overpriced. He finally allowed that in his experience when a parcel like this was being offered for sale at a premium, but less than it might bring to a developer, that current owners were tiring of waiting for the development bonanza, but still trying to capture something of the eventual windfall.

    This anecdote doesn’t lessen the issues you’ve raised – indeed in a way it sort of reinforces some of them. But the 100 chickens? Really?

    • Clem,
      That is a good and reasonable observation, that the cost might have been due to a recognized opportunity to make money. I know more of these details than I have imparted. And, no, the truth is as I outlined, sadly. Tennessee, North Carolina have been impacted in many ways by the relocation of western and northern urbanites that Ohio has not. One of those has been the dramatic increases, as mentioned, in rural property prices. (We sold a small parcel at the height of this mania for a 175% increase in less than ten years over the purchase cost.) People were buying property sight unseen. Derelict homes to next to car farms, it didn’t matter. There was an 80-acre parcel in a nearby valley, on some of the poorest land around, with falling down prefab outbuildings and a modified single-wide trailer. It sold for a million plus to a couple over the internet from California. Those are not isolated instances. There are, however, signs that things have peaked. I expect them to crash back to some normality. And when that does there will be more than a few underwater owners looking to unload. Especially when they realize their 100 chickens or flock of Nubian dwarf goats does not generate enough income to pay their costs or fuel their cars. Or, when they wake up to the fact that they are living in rural Tennessee and not L.A.
      Hope all is well with the new farm.
      Brian

  2. Hi Brian,
    Land prices in Indiana have been going up too, particularly sub-urban land where developers are still sprawling outward. Hard to know where this couple got their money (personal or borrowed). I hadn’t thought about all those people living in expensive cities who sell their home for a million dollars or more. Yes, they might be in a position to pay that much for a 30 acre farm, but you are right to be concerned about squeezing out other young farmers. It is a bit like winning the lottery and suddenly being flush with cash. Rarely do people spend the windfall on something that makes good sense.

    Having walked the path yourself you make excellent points about starting life as a farmer. It’s difficult to say how this young couple will do. If they aren’t carrying a heavy debt and still have some savings to pay for all the other expenses you point out, maybe they have time to learn what it takes to farm. If they haven’t done hard physical work before, they could be in for a shock. Maybe they think they will sell chickens for what they used to pay in the city where they lived? Few people who start a business realize how long it takes to build up a customer base. At least they had the good sense to visit your farm. 🙂

    • Nice response, Jody. You offer an insight that I didn’t fully explore, regarding the nature of wealth accumulation. People do come into windfalls, such as selling a house in an overheated market and purchasing land with that bonus. Time will tell how they used that good fortune.

      I also didn’t address the fracturing of land into smaller parcels. Which is a bit more concerning. Once Humpty Dumpty, etc. etc.
      Cheers,
      Brian

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