Why are you still farming?

[DanL99]

I was talking to some people this morning(ex farmers who sold up years ago due to making no money) and they said why are farmers still farming if they are making a loss? I know a lot farmers who have said they have made a loss for a few years and a lot of you on here say there is no money in farming. If there is no money in farming why are you still farming? If any business was making a loss it would shut up shop and sell up. My point is no one can keep a business if it's making a loss and with nearly every farmer saying there is no money in it and there making a loss why are they still farming? Don't take this the wrong way as I'm studying agriculture and work on a farm and respect everything you do, I don't see the financial side so I don't know. I'm just asking you lot as people from non-farming backgrounds always ask me that and say 'if there making no money why are they still doing it' and I can't answer it. There must be some money in it for you people to carry on? Don't mean this in bad way as hopefully one day I will have a farm. Thanks

 

[Sheep]

They're lying.

 

[CornishTone]

Perhaps the implication is that the margins are so tight that there is a profit to be made but it's minute? Certainly not enough to live on by many people's standards?

Most farmers are inherently optimistic (they have to be perhaps) that if they can ride this storm they will find more prosperous times on the the other side?

There is also the idea that, having inherited a farm, you don't want to be the one to loose it? There is a profound connection to the land for many and, as in my fathers case, the attitude that "the only way I'm leaving is if they carry me out in a box." He's fortunate to be making a small amount of money so he can continue to be stubborn, but that won't cut it for some I'm afraid. For them the chickens will eventually come home to roost (excuse the pun).

I expect there are as many answers to your question as there are struggling farmers.

 

[endeavour]

Because no one can replace the joy of seeing new life start when you have struggled to pull a calf or lamb, the pride you get when looking at a first class crop waving in the sun and breeze, the buzz that drives you when you top the market with home bred cattle sheep pigs etc, all worthless unless you make a living although it may be out of losses....... There is no real answer to the question for most!!!

 

[ewald]

As Cornish Tone said, a variety of reasons.

For me, after 35 years or so, I value the freedom of self employment - my brother has a 'proper' job and has spent his whole life moaning about his (numerous) bosses. I am now unemployable I suspect, and will carry on until the accountant tells me to stop!
Financially farmers are great 'hangers on' (or possibly delusional optimists), we all suspect that an upturn is just around the corner, and many who view it as a lifestyle/business combination are prepared to work more hours for less money than the true businessman would accept - nothing wrong with this in my view as long as you know why you are making the choices.

Finally, and most importantly, it beats working for a living.

 

[Pond digger]

For some, it'll be just because they can, or more correctly, because the bank will let them. If they weren't sat on such valuable assets, the banks would probably stop them.

 

[DrWazzock]

Land value appreciation.
Inheritance tax relief.
Land safer than bank to keep your assets.
Still make a very small profit.
Own boss.
Satisfying job some of the time with respect to variety etc.

Circumstances could change though. If land prices start falling and/or tax regime changes there might be a few sales but where would you put your cash to get as get return and security?

Also don't want to be the one that lost it after centuries of hanging on to it.

 

[Hilly]

They lie, they dont make a loss, if they did they would go bankrupt after a few years, theey just dont make very much and dont know what else to do.

 

[DrWazzock]

Thinking about it, for all the wrong reasons if you are considering competitiveness and self reliance of UK Ag.

 

[The Ruminant]

Because in most cases (owner occupiers) the P&L is showing a loss each year but the balance sheet is showing a profit (due to appreciating asset values).

I knew a couple of brothers who were losing, after drawings, £50k per year but as they said they could afford to do that for 60 years before it had all gone, and in that time the land would have doubled, trebled, quadrupled??? And so it wouldn't all be gone.

Plus, there'll be odd years when wheat is at £200+ per tonne and the coffers will be refilled.

They weren't worried in the slightest.

 

[Derrick Hughes]

Waiting to see what the family decide, if they don't want it then I'm out one way or another

 

[Still Farming]

Smoke and mirrors ???

 

[Grassman]

There are some who don't have much choice.
The farm may be owned by parents who keep hold of the pursestrings.
Family who share the farm.
Tenant farmers. If they pack in they have nothing. No home. No income and perhaps debt which needs an income to service it.
A lot of farmers would be unemployable.

 

[Brisel]

There are some who don't have much choice.
The farm may be owned by parents who keep hold of the pursestrings.
Family who share the farm.
Tenant farmers. If they pack in they have nothing. No home. No income and perhaps debt which needs an income to service it.
A lot of farmers would be unemployable.

rubbish. There's always a choice. Why keep accumulating the debt if there are no prospects?

It's different for an owner occupier who has a bigger balance sheet to keep funding the job.

 

[Grassman]

rubbish. There's always a choice. Why keep accumulating the debt if there are no prospects?

It's different for an owner occupier who has a bigger balance sheet to keep funding the job.

True there is a choice but it's one that a lot will only do when it is forced on them!

 

[buffalo_soldier]

The wife earns a living out in the real world. She says it's not for me.

 

[7610 super q]

Something to do...

 

[Moors Farmer]

The wife earns a living out in the real world. She says it's not for me.

My wife earns a bloody good living working for me.

It seems to be me that's the idiot............

 

[Goweresque]

Because in most cases (owner occupiers) the P&L is showing a loss each year but the balance sheet is showing a profit (due to appreciating asset values).

I knew a couple of brothers who were losing, after drawings, £50k per year but as they said they could afford to do that for 60 years before it had all gone, and in that time the land would have doubled, trebled, quadrupled??? And so it wouldn't all be gone.

Plus, there'll be odd years when wheat is at £200+ per tonne and the coffers will be refilled.

They weren't worried in the slightest.

Where does the cash come from? Capital appreciation may make the accounts look good, you can't eat capital appreciation unless you sell some of the capital for cash each year. Are you saying they were gradually borrowing against the value of the land?

 

[Derrick Hughes]

Ok, what would i do if i sold the farm , best answer gets a free bale of my best hay , the wife would like a small place in Sussex as most of our family are down there but its a bit far for me to commute to work