Corporate farms?

Many years ago there was a public outcry against corporate farms. Haven't heard much about them lately; have they just been accepted or what?

Are there corporate farms in your area? How have they worked out?

Historically, large farm operations were initially welcomed by businessmen, but later they hated them because those farms didn't buy from local business places.

The Bonanza Farms bypassed the local merchants and had their machinery and supplies shipped in by rail.

They are tolerated but that is about it. It's true in a lot of instances that these guys will bypass local businesses to get a better deal whether they have to travel a hundred miles or a thousand miles to do so.
In this area there is a mix of small operations and large farms. Some large operators get along well in the community and some large operators are openly hostile to those outside their chain of operations.

Many of the farmers in our neck of the woods east of you in NY, have incorperated, or set up LLCs for tax law, and liability reasons, both BTOs and smaller farmers.
Loren, the Acg.

There can be tax reasons to become a corporation.

The issue out on the farm are Big Time Operators.

This doesn't have to be a mega farm, but often is. It's a person too big for his britches, and is just a big shot. Grows the farm into something so big it walks over the neighbors and eventually collapses upon itself, taking others with it.

You can look up 'stamp farms' for the current version from the past year.

The year before that was 'Illinois family farms' .

Every neighborhood has one or 2, they offer more rent and more risk to the widows that own farmland to rent.

The 'wave of corporate farms' that made headlines years ago in the city papers wasn't a big deal out in the real farm world. A non issue. What used to be a 160 acre farm is now a 1600 acre farm, run by the kids of the same family. Just a natural progression of business, and not so e horrible corporate takeover.

Paul

True enough. I think the OP was directing his comments to the large sized operations. I think some people are just trying to sort some things out in their mind as to what may make a large operation a bad entity in a given community. The largest gripes I hear are a lack of ethics and very open hostility towards others. I also think people are mindful of what may have brought their ancestors to the United States centuries ago. Many came to escape an economic system that was barely a step above feudalism. A system where many people toiled to have at best a roof over their head and a minimal amount to eat. A system where there was no chance to be any better off tomorrow than they were today.

Just accepted, like Walmart.

I run my farm as a 'Proprietorship" But I could "Incorporate" . All this would have little impact on what happens ,on my farm day to day. But it does change things when it comes to ,income tax, and debt liability. So in other words, my farm could go broke, but I personaly could still be solvent. What gets my goat, are these "Investor Farms" where Us lesser mortals only ever get to deal with a Farm Manager. They do not make good neighbours. Bruce

Several of the bigger guys around here, 500-1500 head dairy operations, operate under their own Corperate or LLC names, still family farms for the most part, but, they formed their own Co-op and market their bilk as a block, and truck it to market. They also negociate their inputs, (machinery, fuel,fertilizer, etc.) often bypassing local dealers, causing some hard feelings.
Loren, the Acg.

May be different in Canada, but protection from liability is about the only reason to incorporate down here. Corporate tax rates are higher than personal, so all small business corps or LLC's elect to be taxed the same as if they were individuals. The protection from debt liability sounds good in theory, but there isn't a lender alive who is not smart enough to also demand you sign as an individual, thereby putting your personal assets at risk, if your corp. or LLC borrows money from them.

There is also an advantage in working for wages for a corp. or LLC vs. as a sole proprietor regarding social security taxes. It is also easier for parents to pass the farm on to the kids if they incorporate- much cleaner to pass on stock shares than giving Bill those 15 cows over there, Cindy the 4040 tractor, etc.

In my neck of the woods in NWIA the big farms are mostly local farmers taking a big chance and incurring big debt. There's one billionare city landowner in this area and southern Minnesota but he mostly rents the land out to area farmers who still buy locally. One hog feeding outfit is buying up land so they can produce their own feed. They aren't paying the ultra-high prices though they are paying big money for this land. This outfit also is part owner in the packing plant the hogs go to. I'd say this hog outfit is about as close to full 'corporate ownership' as we have here but they too still buy locally. Jim

Generally in Canada its the same as US, but we don't have s-corps and some other things. Incorporating can be good for liability from accidents in some cases, can help with issues of having employees and liability too. Also, if your income is high, you are generally in a better position tax wise as a corp here, depending where you live.

When taking a year with a loss up here, corps are far more limited than sole proprietor or partnership.

Lots in NE Iowa, they buy their corn for their hogs from another corperation...they own that corperation also..therefore they feed all the corn they produce, but still get a subcity on their corn. They also can include everything, including housing, fuel and insurance..make that all insurance...vacations, phones, all medical costs.....well erything becomes a tax write off. The hard part is a divorce, a death, or someone wanting out. The simply are using it for the legal dollar. Cant blame them.

Premium Standard Farms is the big corporate farm in North Missouri
The Missouri office is in Princeton, MO

They do pig raising and slaughter house. They say they have 450 big hog farms in the US, 17 million hogs each year.
They've got the enormous steel barns sitting around where they raise 10,000 pigs per big shed
They're off the main roads, so you might not see them, if you drive thru the area.
But you'll see their stock hauling semis on the roads.

They also have grain elevators, and buy corn from local farmers, to feed their pigs

I think they had a role in lowering the price of hogs, I assume so low, that farmers couldn't make any money on them. You never see any smaller farmers raising hogs any more in the area.

The other problems are the smell, for anyone living nearby.
Plus, 10,000 pigs put out a lot of sheeit. I'm not sure what they do with it.
I've heard of "lagoons" where they may do some treatment. When those overflow in a big rain, that's waaay too much for nature to handle. I think the corporate farm also owns land to spread it on and offers it to farmers.

A friend had a full time job doing artificial insemination for the company. Think about that job!

Just changed their name to "Murphy-Brown of Missouri"
Got bought out by Smithfield Foods, so they're the "livestock production subsidiary" of Smithfield.

We haven't seen any new lagoons for maybe 15 years here and we have a bunch of finisher buildings in this county. I'd say maybe 40-50000 fats are fed per year in my township alone. I don't think anyone can build a lagoon. Too many problems with overflow, like you say, and leaks. All of the buildings have a deep pit. How many of these pits leak? I don't know the answer. Manure is knifed in under strict guidelines where the farmer getting the manure has to show grid sampling. The manure is applied using computer generated maps. The smell isn't hardly noticeable but the largest building sites in this area aren't any bigger than 4000 finishing units and they are spread fairly far apart.

We do have a large egg laying outfit four miles from me that has the capacity for 6.5 million layers. The only thing they buy locally is the feed products. This outfit does provide jobs so it's not all bad. Jim

Hogs have gone the way of chickens, either you're huge or you're a hobby. BIL just tore down his $150,000 farrowing house that he built in 1990. Couldn't meet EPA regulations anymore. Just filling in the lagoon turning into an ordeal.

In North Dakota corporation farms have to have one of the members as the active farmer. Big businesses cannot own land here. When a bank or lending institution repossesses farm land they have three years from the date they took possession to sell it. They can manage farm land but not own it.

I think there will be more corporate farms, because of the change in tax codes. Any farm over 5 mill and 40% goes to uncle, not to mention other expenses, lawyers, probate and ect.

Are there loop holes to save the family farm?

What's so special about family farms? I know several guys who's families were in the Tool & Die biz for generations. When foriegn competition pushed them out of business, I didn't see anyone setting up ToolAid concerts? And if somebody who made millions in retail or medicine has to pay estate tax, why shouldn't a farm family?