Have you seen how expensive a tractor or combine is? The economies of scale are real in farming.
You need ~$1M worth of equipment to farm 80 acres (~$1M worth of land), but that same equipment can basically farm 800 acres (~10M worth of land). An equipment issue can destroy a years worth of work with 800 acres (e.g. frost damage from delays), but with 8000 acres you can have spares / avoid the loss with some overtime.
Fertilizer and pesticides aren't neatly contained. If you farm different crops than your neighbors, overspray can kill your yield (e.g. weeds spray for corn kills soybeans). Laws around who can grow/spray what and being big helps make that better
> You need ~$1M worth of equipment to farm 80 acres
All new? That seems way too low. You'd struggle to get into a combine alone.
Used? That seems way too high. I doubt I'd get any more than $300k for my equipment (and that's more than I paid) if I were to sell it today, and it's pretty nice equipment compared to what I see a lot of farmers using.
> 80 acres (~$1M worth of land)
We always wonder why so cheap? The 18 acres for sale down the road from me wants just about $1M (I expect that will be a hard sell, to be fair). The 130 acres further down the road wants nearly $4M (quite realistic; comparable parcels have sold for more). If you could pick up 80 acres in these parts for $1M, you just won the lottery. And, to be clear, it's not like on the edge of a city or something where other interests are driving up the price. It's just farmland. The yields are respectable, but not quite like Illinois will produce.
Anyone with 80 acres is buying used tractors. They are likely hiring someone else with a combine to harvest their fields (harvest needs a lot more labor than the 80 acre farm has so when you hire a combine you get a team of 3-4 people which also includes grain carts and semi trucks to get your grain from the field to the elevator (which might be something you own and might be something town).
I work for John Deere, though I don't speak for the company. All tractors are built to order, which means when someone buys a new tractor the dealer has several months to sell the trade-in. When the new tractor arrives from the factory the truck unloads the new one, and loads the trade in to take to someone else. A good dealer will have a list of farmers and what equipment they all have so they can put this deal together. As a result the only tractors a dealer has are service loaners (which are sometimes rented), which makes all the accountants happy.
You'd think, but you'd be surprised. In fact, one of the families I rent land from (aging couple who was looking to work less land) is still working around 50 of their acres themselves and they got a couple of new tractors recently.
> They are likely hiring someone else with a combine to harvest their fields
They even combine the crop themselves. But, to be fair, the combine is pretty old (IH 1420).
The other possibility is they have had the land for a long time and it is paid for. Payments on 80 acres of land will pay for some really nice tractors. The rational economic actor will still be going for used tractors on 80 acres, but humans are not rational. Larger farms a new tractor makes sense for various reasons.
Don't forget tax deductions. There is a reason the week between Christmas and New Year is a big on for tractor sales - your accountant suggests you want to get the down payment out now and off your books. As an accountant to explain it (I don't fully understand this)
> The rational economic actor will still be going for used tractors on 80 acres
A rational economic actor would sell the land. 80 acres would fetch around $2M around here pretty easily. You're not getting $2M of pure economic value of 80 acres.
But what are you going to supplant the enjoyment of being out on the farm with? No amount of money can buy a suitable replacement.
1M was a nice round number for equipment. I see people without much land buy new equipment all the time, it’s wild! They tend to not stick around long though.
You must have better land than we do. Land by me goes for around 14K/ acre. The bigger plots or better land goes higher.
It's decent enough, but hardly the best ever known. 200-220bu corn and 50-60bu soybeans would be pretty typical for good ground. Whereas, as I understand it, that is merely average ground in Illinois?
But the farmers are really hungry. Case in point: When I was a kid there were eight adjacent farms, including where I grew up, that all had farmers living on them. Of their kids (my generation), there are now 12 of us trying to farm in the same area. That's a 50% increase! As you can imagine, the competition is fierce.
I own the farm and farm it in Illinois. I owe the land through an LLC, because farming is dangerous and I don't want to go bankrupt if somebody sues me. Farms are expensive and hard to subdivide, so people will put them into a legal entity and pass down to the next generation via a trust. All of my neighbors are doing the same, so we're all counted as "not farmers" here
Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. The margins get better as you get bigger but still not great.
Many of the buyers keep growing their farms because it's a status symbol. Everybody in your area will instantly know you're a big wig if you're one of the X family who has 2,000 acres all without the ick that comes with running other businesses. You can't buy that kind of status in my community with anything other than land.
> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit
Well, it is ultimately a real estate business. The "hundred grand" in profit is really there only to support the mortgage payments — meaning that's what other farmers are counting on, so they're going to drive the prices down to that point. It is like a tech startup. You are counting on the assets increasing in value when you exit. That is where the profit will eventually come from, hopefully. It is not a business for everyone, but I like it.
> Many of the buyers keep growing their farms because it's a status symbol.
And because the fun parts of the job end too quickly when you don't have enough acres. I'd at least like to double my acreage. That is where I think I'd no longer be in a position of "That's it? I want to keep going!" and instead "That was fun, but I think I've had enough."
That said, the machines keeps getting bigger, whether the farmer likes it or not, so perhaps in that future I'll need even more land to satisfy the pangs.
If you don't need a couple of million dollars worth of tractors, combines, and other equipment that are all driven by GPS then you don't have enough acres.
Do you need to buy them or can they be hired / outsourced? I guess they all are needed at roughly same time and cannot be easily transported huge distances.
right, so a couple million. you must be one of those poors that think a couple means exactly two. when you're rich AF, you toss a couple million around to mean plebe monies. too bad farmers aren't rich AF. when you have to use the farm as collateral for the tractors, you gotta ask if we're doing something wrong
What is the thesis for speculating on farm land? Theres no reason for me to think it will appreciate any faster than inflation because demand is stagnant.
"Agriculture use" is the zoning class of choice for developers to hold land out of town until the town gets there. They have to show some actual agricultural use, so they lease it to farmers or cut the pine trees, and in return they get the lowest tax value for holding the land.
Then when they want to cash it in, they rezone it to commercial or residential and build on it.
> Theres no reason for me to think it will appreciate any faster than inflation because demand is stagnant.
It has in the past. I looked at a $1M (~$1.5M in today's dollars) farm 20 years ago. Couldn't figure out how to make it work at the time, sadly. Frankly, it seemed like complete insanity when I got into the numbers. But, today it would sell for ~$6-8M. About the same gains as the stock market over the same period, granted, but it's way easier to convince someone to loan you money for land than it is to buy stocks.
There may be no reason to think that will continue to happen into the future, but many are willing to place that bet.
Get a mortgage on the land. Farm pays the interest. The price of the land goes up with inflation, the size of the loan doesn't. Difference is low tax profit.
I enjoy most of it, but, being a tech nerd at heart, I'm in my glory when I'm out in the field playing with the tech. More acres means more time to play. Something I don't feel I get enough of. I get the "I want to keep going" feeling when I disappointingly have to put everything back in the shed. Like I mentioned before, I figure doubling my acres would be the threshold where it goes from "I want to keep going" to "I'm good".
I was just looking at a GIS map yesterday for my area and noticed that nearly every field was owned by an LLC and/or trust. Didn't think much of it at the time until I read this.
> It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court.
What I keep hearing from experienced estate attorneys is that California probate court is onerous and worth a lot of effort to avoid, but other state's have reasonable probate; it might still be worth it to avoid probate, but it's not such a big deal. OTOH, dealing with assets in a revocable trust can be a PITA while you're still alive and may not give much benefit while you're living either. If you're not in California, it's worth taking stock of the situation before you use California biased advice.
Having an estate in trust may not actually save on taxes either. Yes, you'll avoid probate fees in California, which is significant. But your estate will still pay estate tax. Otherwise, if an irrevocable trust holds the assets, it pays the taxes, and trusts have very abbreviated brackets; your heirs might well pay less income tax holding the property themselves.
When your heirs/beneficiaries die and their heirs become the new beneficiary, that's not subject to estate tax, which is great, but as a result it doesn't get a step up in basis. If the trust is large relative to the estate tax exemption, it's beneficial to not pay estate tax; if not, it's more beneficial to get a step up in basis.
Certainly, in some situations, trusts are more tax efficient, but you have to actually look at your situation to see. Default everyone should have a trust assumptions add a lot of senseless confusion and delay to the people who don't actually get a benefit from it. There are asset protection benefits from trusts as well, and it's reasonable to consider those depending on the situation as well.
Holding a farm in a trust or llc makes a lot of sense to me, because it makes it easier to split ownership without dividing the farm.
I'm in CT and was told one of the big advantages of a trust is speed. It can take 10-12 months to clear probate while the trust goes the the beneficiary(ies) more or less immediately.
My interest in having a property/home in a trust is privacy. Where I live, tax records are easily searchable online, so you can easily find out where someone lives assuming they don't have a very common name, or are renting. And if someone is curious about a specific property, most people are going to stop at 123 Elm St Trust.
IANAL but to be clear, I'm pretty sure that CA does not have an estate tax. And the federal estate tax limit was just reaffirmed (BBB) at the prior threshold.
> Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills.
Non-judgmental curious question: why do you keep doing it? (As opposed to selling the land and buying tbills.)
There’s an exceedingly strong cultural drive to keep farmland “in the family” even if it impoverishes or otherwise inconveniences the descendants.
I had a coworker once who lives in this region and owns some amount of farmland in a similar situation. He could have sold it and moved his family to <insert modest paradise here, in his case Florida> at any point; even now I think it would be easily done, if not as easy as in the past. But of course he still lives there, immiserating himself to keep the farm barely viable and working a second job to provide a livable salary.
Why? Because selling it would offend his dead father’s pride.
I used to date a woman in Germany who was trying to shake her farm roots for corporate aspirations. I didn't understand German that well but apparently other Germans could tell her accent. No different than someone from Appalachia being assumed to be uneducated, and how we debate the validity of poor English versus "dialect". It seemed like an unnecessary distraction to her life.
Eventually I met the father, and he was big into the farm life. running a small but industrial farm. I still didn't understand, he mentioned a love of feeding people, why is he doing this and why is he putting his family through this, my girlfriend was translating the things he said but I didn't get it, so I assumed language barrier. They did seem to be respected in the town though by all the shopkeepers. But given the options, they were quite liquid and wealthy, it seemed contrived.
Then I met the grandfather, now, I liked that guy. The grandfather had a diversified portfolio, golf ranges, restaurants, farms, different siblings and children running them all. There was no "I just love feeding people" bullshit, just revenue streams and property. The farmer son just got the short straw and had to adopt that persona.
>The farmer son just got the short straw and had to adopt that persona.
Deluding yourself into believing in what you do is easier than getting up every morning knowing it's bullshit.
Certain areas of government, debt collection companies, insurance industry, there are literally high rises full of people who live that existence every single day.
Yeah, that rings true. I assumed when asking my question that this was something to do with culture, identity, and social status within a particular community. In this case the culture (rural America) is alien to me. But I can understand the idea of making economically "irrational" choices for reasons to do with pride or culture or identity, though in the world I grew up in it's more things like become a classical musician, environmental scientist, or spend 6 years doing a humanities PhD. On the other hand, none of those things involve the allocation of $5M of capital, so there does seem to be something different about this kind of life choice.
There's opportunities for the right person out there, I've seen it a few times - young man (or woman) who wants to run a farm or rural business or whatnot, either marries into the family or becomes "basically adopted" and inherits the business or farm.
You have tons of businesses that are viable (produce enough money to support a family) as long as you never load it with debt; because they do NOT produce enough to support a family and the debt load that would come from buying it.
> You have tons of businesses that are viable (produce enough money to support a family) as long as you never load it with debt; because they do NOT produce enough to support a family and the debt load that would come from buying it.
I've been thinking about this situation as "the bakery trap". The labor dimension here is that the best possible career move for the person you've spent the past n years training is to immediately leave once they've mastered your hot-cross bun recipe.
"The E-Myth" books talk about this (which is the worst name ever because the E is Entrepreneur not E as in email or emachines lol) - many small businesses are NOT small businesses, they're a job you own, and you can't sell a job.
First accountant I met with a year or so after a friend and I started our business 25+ years ago said: you guys don't have a business, you have a paid hobby.
Jokes on them because it's even less of a business now.
I know someone in a similar position. Had a spirit more meant for tech, pursued it, but has to keep thinking about what to do about the family farm business. I think it's the same for any kind of family business, there's a sense of failure if you're the generation to close it down.
Maybe a nit, but In Illinois it's unlikely that what's being farmed goes into people's mouths generally. Corn (not your sweet corn, but field corn) and soy mostly go into other industries e.g. biofuels, animal feed, chemical industrial inputs etc.
I own both a farm business and non-farm business. I feel the "ick" he talks about.
I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people...
In farming, it is all laid out for you. Prices are already set in Chicago. The buyer is always there. You grow the product, deliver it, and that's that. These days, with the way technology has gone, you might not even interact with another person in the process.
> I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people...
What about all the non-organic farming, use of pesticides/antibiotics/etc., poor treatment of animals (sometimes), water waste in some cases (like almonds in CA), being beholden to & inevitably supporting the wonderful companies that are John Deere and Monsanto, having to use proprietary seeds and IP for such a basic human need, etc.? Some of our largest problems on the planet trace back to modern industrial farming.
To be clear, I love and respect farmers a ton, my comment isn't about them at all. They're amazing and hardworking and anybody in the the business would be dealing with the same problems. I'm just talking about the purity of the business itself that you're talking about. The idea that the job is somehow so morally pure compared to all the other jobs baffles me. Your average local job (waiter, cashier, postal delivery worker, janitor, etc.) would seem to have a much more direct positive and impact on people's happiness and much less of an opportunity to take advantage of other beings, as you put it.
That is all much the same as the prices being set in Chicago: Someone else has made the decision. While someone else no doubt feels the "ick", I am but the customer who is being taken advantage of. (Well, except in the case of Monsanto — they closed up shop years ago)
> Your average local job (waiter...
It seems you, deep down, even understand that. Comparing farming to being a waiter as opposed to the restaurant owner, I feel, is a pretty good portrayal of the difference and it is telling that you chose that point of comparison. Technically farming is like owning the restaurant, but in practice, because everything is laid out for you and decisions are made elsewhere, it feels more like being the waiter. You are layers removed from the "ick".
> Technically farming is like owning the restaurant, but in practice, because everything is laid out for you and decisions are made elsewhere, it feels more like being the waiter. You are layers removed from the "ick".
To be blunt: I don't buy this... at all. Farmers have (in theory, and to some extent in practice) choice in (a) what they grow, (b) whether to grow organic/GMO/etc., (c) what pesticides/fertilizers/etc. they use and how much, (d) how they treat any animals they have, (e) whom they sell to... I could go on. Of course competition and supply and demand constrain what they can do, but that's true for most if not all business owners, including restaurant owners.
Waiters are not* like this... at all. They have -- by definition of their jobs -- zero control over the dishes, the recipe, the cooking, what is ordered, whom to serve, etc.
Therefore the idea that "technically" the farmer is like the restaurant owner but "in practice" like the waiter therefore makes no sense to me. They are (extremely) more similar to the restaurant owner in basically every dimension, not just "theoretically".
Both my farm and non-farm businesses have a physical product, though. In fact, in both cases the product is food, as it happens. I expect the farm business is less "icky" because it is entirely dehumanized. You don't set the price, you don't have to win over customers, and increasingly with more and more automation you don't even interact with the customer at all. There is no "Poor service. 0 stars." or "Too expensive! Scam." to contend with.
Many if not most businesses involve lots of ethical decisions where you have to choose between taking advantage of people or making less money.
Depending on one's values though I'd see something similar in some modern conventional farming where the land is being degraded, but there's still the righteousness that you are feeding people so it's justified.
There are ways to farm and some other kinds of businesses too that are win win for everyone involved. They're generally not the most short term profitable. Or even in-one-lifetime profitable.
I should clarify that I mean directly financially profitable. Obviously growing good food even if you lose money at it means people including your family and friends get to eat good food which has other benefits than cash.
There’s something righteous in farming where it’s really hard to feel like you’re doing wrong even if you’re getting rich — you are just feeding people. It’s like being a doctor.
I think "insular rural folk" are often literate enough to see highfalutin dick-bags like yourself coming and don't want to be associated with that level of disdainful pretense.
I work in project management for a massive multi-national, about as "businessy business" as you can get, and my moon-shining, hog-raising cousins give me shit for being a sellout (we grew up showing and milking cows together) but we all still can sense a vibe about "certain types from the big city" that's more about respect and shared culture that any sort of financial, social, political, or other illiteracy/incompetence.
Land can be financed over long periods and held forever. So a few hundred grand will pay off $5 million in about 20 years and then that's steady income forever after (as long as you keep farming).
Yeah, this is the pertinent detail. The whole point is putting down only a fraction of the amount.
When you calculate the rate of return on a financed property, the rate of return is versus the capital you put down, not the value of what you financed. Plus accruing equity in the property is part of the return.
If you put down $1.25 million and you get a $5 million property paid off after 20 years, that's double the rate of return on your bonds.
You say you only calculate rate of return on the "capital you put down"...Im not following here, do you think because youre spending profit from the farming operation that loan for the farm is paying for itself? The tbills pay for themself.... you have to work the farm for 20 years to pay back that 5 million. Its an apples and oranges comparison there.
You're right, it's not an apples to apples comparison, just like running any business will yield more than straight investments.
But opportunity cost is a thing. No land equals no farm and no opportunity for that return.
If not farming, what kind of job can the would-be farmer get and how would they accrue enough capital for their return on T-bills + income to equal their farming income paying off the land? Also my calculations didn't consider that the land value would rise, which it almost assuredly would.
he could spend 90% on tbills, 10% on a small farm, and then each year take the 2.5% the tbills generate and buy more farm fields, working the farm as it grows, or something like that, a mix of finance and farming
If $1 million in cash means you can get a $4 million plot of land, spending 90% on T-bills means you have only $900k in bonds and a measly $400k farm (25% down). So you have 1/10th of the land and your bonds are yielding $22,500...
What really happens is as you pay off equity on your land and equipment, you leverage that into buying more land and more equipment.
Successful restaurateurs buy more restaurants, successful tech startups hire more devs and buy more servers, successful farmers buy more land.
Actual (successful) business activity yields more than investments, which is why they reinvest in themselves over stock markets.
I mean, you _can_ buy 20 year bonds on margin. Reg T just limits you to 50% in most (all?) cases. And it doesn't buy you a job or a demand mountain of insurance contracts!
Land can’t be financed, businesses can be financed. Businesses that own land are much more easily financed, with the lowest interest rates.
When you buy land to develop, you have to pony up cash for it. I have never heard of a lender lending without a cash flow producing asset as collateral.
You've got it backwards. Hard assets like land, buildings (aka. your house), machinery (a tractor or your car) are all much easier to finance than businesses. A simple Google search gives a wealth of resources for someone looking to finance (aka. mortgage) land and/or property for a farm.
Edit - we're on HN. If you'd ever tried to get a business loan you'd know it's near impossible for a new business without 100% collateral, which is why the entire venture capital business, and HN, even exists...
My point is those hard assets have to be used for a business, not for price speculation (as far as I know). Your second link says:
>Farm Ownership Loans offer up to 100 percent financing and are a valuable resource to help farmers and ranchers purchase or enlarge family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations.
What is "assist with land tenure to save farmland for future generations"? Is that speculating for future price increase?
> My point is those hard assets have to be used for a business, not for price speculation (as far as I know). Your second link says:
Banks will let you finance any land if you have a way to pay for it. They'll let you mortgage some plot of land in the middle of nowhere if you have the income to pay for it.
A farm is income. A future farm is a business plan. But if you want to speculate on land from the city and work an office job, yeah, they'll give you a loan for that too.
> What is "assist with land tenure to save farmland for future generations"? Is that speculating for future price increase?
This is factually inaccurate. The land is the collateral. If you don’t service the debt, they take back the land. 75-85% loan to value, 2-4% interest over treasury rates. Underwriting guidelines for the loan will differ if this is for speculation, development into housing, or agriculture.
Land not occupied by some money making asset also being financed or used as collateral in the deal cannot be financed at rates that are not the lending equivalent of a "we really don't want this job so we're bidding high".
This is simply not true based on the interest rates and underwriting guidelines, and I own raw ag land that has been financed with nothing else besides a down payment and the land as collateral. Words mean things my dude. These are not hard money rates, these are credit products specifically for land with no business, cash flow, or other income stream at time of transfer. Being ignorant or unsophisticated is a choice.
"Ag" is the keyword there and I suspect it roughtly translates to "somehow tax subsidized by the rest of us". Go try and get a loan on residential/industrial or otherwise non-ag land and get back to me. Everyone looks (i.e. does their due diligence) and nobody ever goes for it because the rates or terms are always laughable.
Since you're an expert link poster why don't you cherry pick us all up some of those underwriting guidelines you cite?
I look forward to learning about ag specific loan products.
I can have a wholesale originator (UWM) extend me credit for those use cases in ~15 minutes up to almost $1M at 7% (conforming, ready for sale into the ABS market), which is very reasonable imho. I can get up to $5M within a few days if it’s commercial through one of the commercial banks I work with (Wintrust). 80% LTV, most of the time.
Guidelines are openly available at Fannie Mae, Freddie Mac, and USDA websites (unless there are specific overlays a bank is using, which is typically proprietary).
This is news to me. Are you saying you can borrow money with the stated intention to speculate on future sale price, from the government no less?
I have no experience with farmland, but for other purposes such as building hotels/retail/etc, you can't just get a loan for the land, you buy the land with cash and then get a construction loan to start development. I assumed you would have to at least need to have a plan to operate a farm to get a loan.
> Farm Ownership Loans offer up to 100 percent financing and are a valuable resource to help farmers and ranchers purchase or enlarge family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations. With a maximum loan amount of $600,000 ($300,150 for Beginning Farmer Down Payment), all FSA Direct Farm Ownership Loans are financed and serviced by the Agency through local Farm Loan Officers and Farm Loan Managers. The funding comes from Congressional appropriations as part of the USDA budget.
As long as your intent was in good faith at time of origination, you’ve met the burden.
What does "conforming" mean here? Because I suspect there will be a reference in there that is a pointer to something involving government subsidy. Everything ag related is rife with that.
I love government subsidies through implicit and explicit loan guarantees. It’s the reason a 30 year mortgage exists. It’s the reason one can default on an FHA mortgage with almost no consequences (while being almost impossible to default on student loan debt).
To your point this is “subsidized by the rest of us,” the bottom 50% of American earners only pay 2.3% of total federal income tax collected, with the top 50% paying the rest. The poor folks are not on the hook for subsidies when they come out of general federal gov revenue (FHA loans charge an upfront and monthly mortgage insurance premium, and there are similar costs for USDA and VA loans but lesser so; we can consider those costs “cost recovery” for the purpose of evaluating self funded vs subsidies via transfer from the general fund).
>I love government subsidies through implicit and explicit loan guarantees
Like student loans?
>It’s the reason a 30 year mortgage exists.
Which is a large part of the reason houses cost what they do.
>the bottom 50% of American earners only pay 2.3% of total federal income tax collected,
"Well the poors aren't paying for it, you are" isn't the endorsement you think it is. And the poors still get kicked in the dick by spending driven inflation same as the rest of us anyway.
It's buried in a figure legend, but the Tribune does acknowledge this too:
> Note: The 12 selected counties had some of the highest cash rents in the state. For the purposes of this analysis, a business entity was defined as an organization with an LLC, Inc, LTD, Co, Corp, LP or LLP tag. This land is not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses.
It's not buried anywhere, it's literally the next paragraph after the lede.
> These acres are not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses because they offer tax benefits and externalize losses.
This is a use case where I think a current LLM shines. Ask it to summarize the important points of n papers, and slow read only the ones that pique your interest. It won't be perfect, but it will save you a ton of time while letting you focus on the things that need more attention.
I'm not anti-LLM even if the following statement sounds like it.
I don't trust LLMs, even to summarize for me. I have to fact-check every single statement. For instance, if I ask ChatGPT, "Is PLA more dense than ABS?" it answers, "No, PLA is not more dense than ABS." Those are direct quotes. In the third paragraph, ChatGPT says, "So technically, PLA is denser than ABS, not less — I misspoke earlier."
I find LLMs good for using words that I didn't think of. I can then reword a search to get better search results.
To be fair, the cherry-picked example I used above sounds a lot like a human. Humans make such mistakes and corrections. If a human had given me that response, I would shrug and ask more questions. But it would make that human not be my go to source.
It makes me shudder to think about code that is written in such a manner.
A human that makes a mistake, catches it, corrects it and apologizes is someone I'd much rather interact with than someone that makes a mistake, catches it, and doubles down on the mistake that I then later discover the issue would be the person I would not be my go to source.
Mistakes happen. If they are honest mistakes, then we can deal with it. If they are deliberate mistakes, well, we can deal with that too but in a different manner. The problem that I have is answering something in a confident manner when it's really a hedge to not sound unsure. People apparently have issues with an unsure bot. I'd much rather have a response like, "I'm not positive, but I think PLA is less dense than ABS" for the wiggle room of being able to come back later with "So technically, PLA is more dense than ABS". Even if the bot doesn't figure it out, by phrasing that way, you're clued in on what to fact check
It might surprise you, but copy-paste coders have always existed, LLMs are just making them more obvious, like "vibe coding". I don't use AI code assistants, but I can see why they could be valuable autocompleters in contexts where the user is knowledgeable.
It also makes me shudder to think of people who know just enough to compile and fix glaring mistakes, but largely trust the overall AI output. As if commercial software quality hasn't gone downhill enough these days.
I am researching LLMs as a summarizing tool for medical research and early results show that LLMs do a better job than the current status quo of volunteer doctors. Pre print hopefully coming soon, until then youll just have to trust me that they are really good at summarizing and critiquing research.
> It makes me shudder to think about code that is written in such a manner.
Often it has the property which was good enough for generations of C and C++ programmers, it compiles. Does it work? Eh. Do the tests, if there even are tests, check anything useful? Eh.
The focus on "it doesn't matter so long as it compiles" justifies everything up to IFNDR†, the explicit choice in C++ that if what you've written is nonsense but it would not be easy to modify the compiler to notice, just don't worry about it and say it's somebody else's problem.
† "Ill-formed, No Diagnostic Required" these words or near equivalent occur frequently in the ISO definition of the language.
I don’t know how to say this without seeming rude, but a few hundred acres is very small. 500 acres is less than a square mile. Is there something about your community that makes farms of that size more common than normal?
Edit: my (extended) family has a farm, and they cultivate X0,000 acres every year, though they own far less. They do plant a larger area than most for their community, but they’re not planting 20x their neighbors.
It's small in that you can't support a family farming 500 acres of corn/beans. It's big in that buying 500 acres would cost $5M - $10M, that's real money!
If you don't mind me asking, how do you make it work for yourself? Are you single, so you don't need more? Or perhaps you're closer to a 'hobbyist' farmer? (although 500 acres is also well beyond a hobby haha)
I've been a FAANG engineer for the last 15 years, tech pays pretty well. The things you see on the news about "farming subsidies" often show up as government subsidized loans (lower rates and higher leverage) which has helped.
It's somewhere between an extra job and a hobby. It's just touch for planting / harvest season -- lots of nights / weekends / day job PTO along with getting help from relatives.
Oh wow, you're FAANG _and_ you're farming? lol that's impressive. I hope you make lots of jokes about how the F no longer stands for "Facebook", but rather "Farm" :)
On a recent Odd Lots episode, they interviewed a Canadian lentil farmer. His claim was that a family of 3 (Father, Mother, Daughter) could farm 1200 acres of lentils with time left over due to modern automation.
So I guess it would depend on the automation level of the kind of crops you’re planting.
Ouch. Better in some ways and worse than others than the restaurant business, I reckon.
My mom's relatives have a long horn "farm" complying with the minimum requirements to claim various tax exemptions. :sigh: Their family business is aviation real estate, services, equipment, and aircraft.
I can walk to where sorghum and field corn is grown here in hill country because that's the major trade in these parts, apart from selling land for new housing developments.
Yeah, I think it would have been more useful if the Tribune had been able to determine "how many people are farming on land which they do not own" whether directly or through an LLC/company.
The amount of land owned by "out of state" owners may help answer this question but they don't give a number for that either. (A local farmer could also register their LLC out of state though I'm not sure whether that's beneficial or not.)
Setting up an LLC as foreign to the state you're living in likely won't save you on fees (since you'll register it as a foreign entity in your own state, especially for holding title to real estate), but it can open up additional features not offered by your state's laws, like series LLCs. Although as far as I know it's an open question as to whether the protections of Series LLCs will be respected by other states or just discarded when you try to use them.
This is probably similar in UK - although this is pure speculation.
A limited company owning the "land" which is then leased to the "farm" business that works it.
Possibly a "group" parent company is owned by the actual farmer.
I'm sure there will be good tax and legal protection reasons to structure farms in this way, not forgetting various government schemes which bring in revenue via grants and tax breaks.
This is a critical insight - the statistics likely count many actual farmer-owners as "non-farmers" due to LLC/trust structures, which significantly distorts the narrative about ownership concentration in agriculture.
As a land owner you should be much more worried about state and local laws than what goes on at the fed.
There are millions of Americans who own what would otherwise be "developable and valued as such" land that became basically worthless with the state passage of various environmental laws (particularly wetlands setback stuff) that make the juice not worth the squeeze except if the location were to become "major urban area" level dense while the municipalities passed zoning laws making it all but impossible for that to ever happen.
I guess when you think about it it's not that the land is less valuable. It's that there's no value left after doing what you'd need (endless engineering and construction hoops, lawyers, court, etc) to extract the value without the government just unilaterally deciding you no longer own the land and backing that up with violence.
I find Illinois taxes to be scarier for land than other investments.
Illinois state is in a bad financial position, they can't inflate their way out of it. Financial assets are easier to move than land if things get bad.
Land value can decrease in real terms at the same time inflation is happening, sure. But it isn’t revalued by inflation in the way that a contract denominated in the inflationary currency is.
You buy land at time t for price x. You sell land at time t+1 for price y. If (y-x)/x is is less than the same calculation for whatever other asset you would have bought (I would use sp500), then you lost money.
I didn’t say that land was as good as the s&p at appreciating in value. That is a completely different claim which I wouldn’t assert. S&P has appreciated considerably more than inflation, right? So saying that something does or doesn’t track inflation is completely different from whether you lost money compared to if you’d instead gone with the s&p.
there is no type of farming that will beat t bills? none? people arent working on ideas to make farming more profitable? i just dont believe that american farms, which cover unimaginably vast areas and are unimaginably numerous, could be continuously funded by banks if they were losing money. thats impossible. subsidies cant explain it. i think youre lying or leaving out some context
> there is no type of farming that will beat t bills? none?
There is no type of farming that beats t-bills today if you buy the land today. There is a saying in farming: "Buying farmland never makes sense the day you buy it." The land you bought 50 years ago is looking pretty damn good now, though. The economic bet farmers not cashing out (or buying in) are making is that trend will continue.
I agree, it will take some time for EVs to really take off. And the dynamics are difficult to predict. If even 5% of cars become electric, it will really move the needle on the retail gas pricing, which might slow EV adoption, etc. I expect it might go in waves. Although EVs have such a dramatic running cost advantage that as capital costs and range anxieties are addressed, the adoption rate will probably be supply limited for years.
EV growth of the last few years was nothing compared to the increase size of the average car (more SUV and pickup sales in proportion, compared to standard “cars”).
So really the EV market is still insignificant and gaz consumption for the average household has gone up, not down.
>gaz consumption for the average household has gone up, not down.
Historical data shows that overall gas consumption is more strongly linked to the frequency of highway travel than to recent changes in car purchases. See:
There's a drop during the Great Recession, a rapid rise during the recovery, and a roughly flat line during the Trump administration until another crater during the COVID pandemic.
Of the negative effects of IG, knowing which photos have been digitally altered doesn't seem high on the list. I'm not sure who you'd be significantly helping with this feature.
Even if this does solve a user problem, it'd be difficult to make this label accurate for photos altered outside the app. An inaccurate label might be much worse than not having a label.
I own a single family home in the Palo Alto. If I wanted to living in a city like Paris, I would. I like it here.
I don't care about the price of my house, since I do not plan to sell it this decade. I care a TON about my neighborhood. I love that my neighborhood is quiet, not crowded, and has easy parking. I will vote against any proposals or elected officials who represent me that would make that worse.
I get I represent NIMBY-ism, but these tradeoffs are real. I often see people strawman them like there are easy/obvious solutions to shared problems. There aren't.
This is why the only real solution is to not have total local control of zoning.
Given the choice, many will vote to restrict what other people around them can do with their property to benefit their own interests - financial, quality of life, etc. While externalizing the costs (higher housing costs, pollution, etc) across a large number of people who aren't allowed a vote. Hoping people will do otherwise isn't going to get results.
But given that the zoning impacts have just as big an impact on the low-paid worker who has to commute hours to the local hospital to work, it is entirely reasonable to allow those impacted parties a vote by moving zoning away from total local control up to a larger level. Recent legislative steps in CA are a move in the right direction, but need to go much farther to create more meaningful changes.
Basically, if you want a quiet neighborhood with large plots of land, you should be required to bear the full cost of that, rather than voting to externalize the majority of those costs across the larger population.
FWIW, I am happy to pay a premium for the living situation I want. I do that today across high housing costs / taxes / cost of local goods/services. I'd happily support paying for other externalities (e.g. carbon taxes).
The premium would be really large though. The difference is only in degree between current zoning and something like "I have a nice view from my window and therefore my neighbors should not be allowed to build up the 2nd floor or plant trees in a way that would block it, and nobody should be allowed to build tall buildings in downtown between me and the mountains". The current zoning just happens to be status quo. Both unreasonably restrict what others can do with their property, and the only fair way to really "pay the premium" to enforce either is to buy the land (or at least, pay some large fraction of market rent, to offset the loss that owner incurs by not e.g. building and renting out more units). Well that or NIMBYism, which is a nicer name for regulatory capture, i.e. corruption.
The easy solution is that your quality of life should not infringe on the rights of millions of people to housing that doesn't cost 90% of their monthly income to pay for. And the state is going to drag local cities kicking and screaming to where we need to go, like it or not.
I make well into 6 figures a year and I can't buy a shack in Fremont because of people like you.
Without knowing them exactly I imagine property owners actually do have rights in this situation. Where does the right “to housing that doesn’t cost 90% of their monthly income” come from?
It's more afforable compared to an apartment in New York where a townhouse can set you back 15 million.
Density isn't the issue demand is. You want to live in a place everyone else does.
At 1.3 million on average you could buy 100a property on prime farmland or you could buy an apartment in New York or a house in Freemont. Wanting Freemont to be zoned like New York property would probably make it more popular with new hot properities and it will price you out further. The truth is there are a lot of people making more money who want housing in Freemont.
Funnily enough buying a house close enough to work in NYC is actually cheaper, because Jersey City is viable and NY/NJ don't have Prop 13 to inflate property values. I could buy a 5bdr luxury home in a nice area with great schools in NYC in one of the outer boroughs or a high end luxury new construction in Jersey City. That same cash gets you a shack in a shitty part of the East Bay.
> make it more popular with new hot properities and it will price you out further
It's a common NIMBY misconception that adding more supply increases prices. Basic economics says this is obviously wrong.
> The truth is there are a lot of people making more money who want housing in Freemont
I'm pretty sure my income puts me in the top 10% of income in the Bay and definitely top 1% nationally. You're saying that less than 10% of the population should be able to purchase a starter home (what I mean by a shack). Do you not listen to what you're saying?
Top 1% nationwide is: 538,926
Top 10% in bay area: 534,600
If you make only 100k with no savings or partner you might be priced out of that 6000ft average home. Most people will buy as a couple, have a down payment and get help from parents which puts you at a disadvantage but it is still possible.
No idea if a 5 bedroom NJ home is equal to a 3 bedroom 6000 ft home in Freemont. Not sure one location has more value. I would choose Freemont over NJ.
I see you are out of touch with the housing market. Zillow doesn't give an average but most of the homes listed in Fremont there are above $1.3M, more like 1.5-1.8M if you want something bigger than 1200 sqft. If you filter by >1500 sqft everything starts at 1.5M+. So no, there's no 6000sqft "average" home, these are all starter homes averaging 1.5-1.8M. Then factor in that most houses get 100-200k over asking price during the insane bidding process.
> If you make only 100k with no savings or partner you might be priced out of that 6000ft average home. Most people will buy as a couple, have a down payment and get help from parents which puts you at a disadvantage but it is still possible
Do you listen to what you're saying? A top 10% earner in the region needs to buy as a couple and get help from parents to afford a _starter home_? So everyone else that's under the 90th percentile is just screwed?
> Top 1% nationwide is: 538,926 Top 10% in bay area: 534,600
90th percentile income in 2018 in the Bay was $384k [1]. Someone in the top 10% of incomes should not be struggling to afford a basic home with 3 bedrooms in a mediocre area.
The 1450+ feet one for 1.2 seems nice. The 760 one seems within reach.
The prices are similiar around the world. 1.5-1.8 is the average house price in Toronto. If New York/NJ is under valued and you can get a similiar home for less I would probably make the move.
> The Bay area numbers I gave are from 2021 source included.
That's household income. But sure, put me in the top 20% instead of the top 10%. Still incredibly ridiculous that an 80th percentile earner cannot afford a basic home.
> Here are some current prices
What you linked are apartments/townhomes. These have much higher HOA fees and are priced accordingly. The sticker price seems lower but the monthly payments end up the same as more expensive SFHs. To boot, most of them are really small - everything over 1500 sqft is over 1.3M which is ridiculous. So no, that's not really more affordable. Density doesn't mean everyone lives in a shoebox, it means building taller so the same land can fit 5x more people.
> The 760 one seems within reach
Again, if a 800sqft apartment that looks like it was built 70 years ago is all that's within reach of an 80th percentile household then you need to re-evaluate housing policy.
> The prices are similiar around the world. 1.5-1.8 is the average house price in Toronto
No, it's only similar in places with similarly dysfunctional real estate markets and NIMBYism as CA. Toronto and Vancouver famously have terrible SFH zoning policies. When you look at places like Atlanta, Miami, Austin, Chicago, etc. they are nowhere near the levels seen in CA.
> If New York/NJ is under valued and you can get a similiar home for less I would probably make the move
Or I can keep voting against NIMBYs and vote for densifying the Bay.
Downtown SF manages to have tall buildings. And there are a ton of 5+1 or 6+1 units going up, which in itself will 3-4x density from height and from smaller setbacks.
> Density means accepting smaller
Strongly disagree. You can still have 1200+sqft apartments. Most of the 2 and 3bd luxury apartments near me are around 1000-1100 sqft.
> An 800sqft apartment is larger than any apartment I've rented.
Not sure what kind of apartment you're renting... (or maybe you're out of touch with the market?) 500sqft is a studio and you're not fitting much more than a bed and desk in there. You have to remember that square footage includes things like bathroom, closet, washer/dryer if they're in unit, etc. And that realtors exaggerate so in practice an apartment advertised as 500 sqft is more like 350.
Please just take a look at Zillow/Redfin for one moment and tell me where you see 500sqft condos that look like actual condos rather than studios.
It's a tough problem to solve when you need to house 70,000 people per square mile (similar to Manhattan) in order to not leave people on the street, but also not allow more than 6,000 people (San Francisco) per square mile.
I have lived in areas with only single family dwellings(Tempe AZ, density 5,203 people per square mile.) and in areas with high rises(Hoboken NJ, density 41,038 people per square mile) and I can attest that most noise is from the cars on the main roads of the city, which largely depends on urban design, e.g. Hoboken has only 2 main arterial roads(Washington Street and Observer Highway) which excludes most of the noise from the interiors.
> not crowded
By what metric? I can walk my dog outside easily, travel easily in the train to manhattan, and get reservations to any restaurant on the day in Hoboken. I don't think most places are as crazy crowded as Manhattan (Brooklyn, Queen and Bronx are much lower density) where the dynamics are different because work and tourism.
Are most single family zoned places in California work building heavy areas and touristy destinations?
> easy parking.
I can find parking for ~200$ per month here. So it is kind of expensive, i'll give you that.
I think my use of "quiet" and "crowd" was not very clear. For me quiet is the absence of hustle and bustle.
When I down my street, I'll see at most 1-2 people out and about. To me, that's a more relaxing environment than even the best urban environments where I'll see dozens of people.
Unless I live next to a major road/highway, the occasional car noise is less bothersome to me personally than noise from people. To me car noise feels like white background noise, but voices trigger some active part of my brain.
I'm not arguing that's a completely rational way to feel / belief, but it totally how I feel.
And. Bay Area neighborhoods will still be full of cars because public transportation is not going to materialize overnight.
> Cars go into underground parking garages
Then we add a restriction that any multi-family unit should come with an underground parking garage. Good luck seeing that through.
> There, done.
Not done, really.
> but NIMBYs really are selfish and shallow people.
In this thread, your arguments seem shallow to me without addressing any real concerns of the bay area homeowners. You seem to be selfishly imposing your political ideology without considering all the costs which you won't be incurring anyway.
I used to think most of NIMBY was shallow. Then my city tried to approve four simultaneous development projects in one city block near me. The projects had tower heights of more than double the zoning. The traffic studies ignored all other development in the area and assumed a much higher use of public transit then is reasonable for an area poorly served by public transit. There were numerous other issues. I think many people (including myself) are not opposed to all development and see the need to build condos even in our own areas. We just see the shit we are expected to swallow from developers and want them to do far better.
Happy city dweller here...no, cars are indeed loud, but so are cities. People, trains, the buzz of lights, the rumble of skateboards, chatter, endless motion at all hours, etc. That's part of the charm.
My parents bought a house in an almost-rural region of southern California in 1991. It was difficult to lose the beautiful field across the street when a housing development went in, but they shrugged their shoulders and moved on -- no biggie.
But more recently, the tiny empty lot next to theirs has been sold and 3 really ugly apartments just went in that are totally out of character with the rest of the neighborhood. If they could have blocked this from happening, they would have -- and I don't think that's selfish NIMBYism. Your next-door neighbors' behavior affects your life profoundly, and when they do dumb stuff like building ugly, stuffed-in apartments that don't fit in with the houses next door, it will affect you negatively.
All to say, NIMBYism gets a bad rap, but having a basic standard of caring about the quality of one's neighborhood (especially next-door lots) isn't selfish or shallow.
By extension, you'd have to say it's "selfish and shallow" to pay more to not live in a bad part of town... is it really?
To those who disagree, would it be right to just let every developer's plan go through without review? I'm not saying "no development", I'm promoting the equivalent of code reviews on PRs before merge.
Housing developers shouldn't have free reign to maximize their profits regardless of costs to a city.
If they said "income" it'd still shoot up the velocity of money, since poor people have higher spending rates.