Ideas on purchasing a farm

Have also seen local market farmers specialize, in this area in Asian foods most of us never heard of.

What was the closest working dairy to me just added a farm stand.

Alot of pick your own orchards & pumpkins. It just can't make economic sense to produce a low value crop, and if you sell off your development rights where is the investment ?

You say you're very close to NYC, you might want to be considering some other highly specialized crops and farming approaches like gourmet produce for resturants or suburban share cropping where the folks get to grow their own 10x10 garden with your help. They are a lot more work, but the profits are also a greater, often times vastly greater.

As far as buying a farm, I cant give you exacts on where you are b/c I dont know the local dynamics. I bought 222 acres when I was a junior in college (1987). Had worked hard in custom work and saved all I could. It was tough to pay for, only way I could borrow what I needed was on an annual note. Managed to pay it off in '92. Then I worked for 10 years trying to build up some decent machinery, I farmed with junk. A lot of it I hauled home in buckets. Just in the past 3 years have I really focused on improving my cows. Was also able to pick up another 100 acres in 2000.

What have I learned? I have to be a businessman first. I keep good records, can tell you my costs to the penny per unit of production, per acre of land, and per hour of my labor. That way I can focus my labor where it makes me the most $. Nothing is sacred, any asset that doesn't produce, leaves; any enterprise that isn't working out gets cut. Lastly, have a plan, with goals (target and challenge) right now I am focusing on cutting my costs 5% annually and increasing production 5% annually. I've yet to make it on both ends but I have made progress on both each year.

As to the 1031, I understand that is a good deal, but a REAL legal nightmare, you need a very good land atterny to set that all up, long before your dad signs _anything_ to sell anything. With the $$$ amounts you are dealing with, certainly a good idea, but just way, way too complicated for internet advise to mean anything to you. My understanding is the land needs to pass through an un-interested party, holding both plots, for the swap to have the most benefits/ least govt hassles. Most average lawyers with a shingle on the street will foul it up; get a good land lawyer who has done this before. You might have to spend a few bucks to flesh this out & get in writting the benefits to you & your dad, start early so your dad doesn't jump the gun on you - depending on the working climate between you & your dad. :)

--->Paul

Hate to say this but have you considered moving to a more farm freindly state? I know you can make it work now - but what are you going to do when NJ decides it needs more money and changes your property tax appraisal and assessment to meet its needs instead of preserving what few farms it has left? One stroke of the governor's pen and your out of business.

That would be my fear - some time when the state comes up short on tax funds (like tomarrow) they would decide the best way to raise it to remove Joe Millionaire's special exemption from property taxes (their view not mine). Unless you find an immediate buyer you could find yourself in a very tight position.

Brother-in-law had a similar problem near St Louis with some land that lost its agricultural status when a small town (with some some greedy city fathers) annexed part of his property. Had to sell immediately because he didn't have the cash flow to pay the enourmous increase in property taxes. Really screwed up his estate planning and his long range farm plan.

I came to know of two dairy farmers in a county about 70 miles from my home- they lived across the road from each other. One was an excellent operator, always near the top in production, farm as neat as a pin. Other, shall we say, marched to a different drummer. Of course, when the county zoning came out, the road was the dividing line between the commercial zoning and ag zoning, and the mediocre operator ended up commercial (ain't there no justice?). They sold their 200 acres for $65,000 per acre, and the old folks and their son bought 3, count them 3, farms in my area. Meanwhile, my nephew married their granddaughter last summer, and he hasn't a clue that he married anyone other than a charming young lady who lets him go hunting when he wants. I gotta smile everytime I see the happy couple.