Re: OT What should I do with 25 acres of crop land?

Posted by Paul in MN on February 01, 2011 at 08:36:17 from (174.20.157.164):

In Reply to: OT What should I do with 25 acres of crop land? posted by soder33 on January 31, 2011 at 10:31:44:

My place is just west of the Mpls metro area, but close enough that the tax assessor has written us a letter a couple of years ago that our land is worth $200K/acre (guess what the crystal ball is showing for property taxes). (But nobody is buying it at that price). We have farmed here since the early 70's, and have learned a bit about survival in the changing community.

First off, be sure that you have the Green Acres ag exemption for land taxes. Recent laws may have affected your eligibility. This has to be renewed every year, along with proof (schedule F, 1040) of having generated a certain amount of $$/acre. The $$/acre is not high, but if you let one year go by without generating those $$, you lose your Ag tax exemption. This is all according to MN state law, but is interpreted somewhat differently by each county, and again by each different tax assessor. So the rules I live under in Hennepin county are not the same as where you are (Washington county?). Your rental income qualifies as income for the Green Acres, and the $1700 may be all you need to provide the exemption on the entire place.

Do you or your wife know anything about horses? That is where the money is in small acreages. Your county may have some formula about the number of horses you can keep (maybe 1 horse/acre max), or there may be no regulation. My son and I have made a business of growing specialty hay for horse stables, and we made and sold about 23,000 bales this past year. But the money is in the boarding of horses, if you are close enough to the metro. If you get into the boarding business, you can expect to gross a minimum of $200/horse/month with only basic shelter, water, and fences. If you go the full ammenities route with investment in great buildings, stalls, indoor riding arena, on site trainers, etc, we have seen stables with an $800/month fee. I see you have the basic buildings needed for hay storage. With a boarding operation, you need to feed 2X per day, clean up "horse apples", and have the equipment to do both. You need good fences and a good water supply, and the insurance to cover that business. We have done some boarding, but at the low end of the $$ scale, providing the basic needs, and no frills. In a tight economy, that is where the market is anyway.

If you let the horses out to pasture (where they are happiest), then you can plan on needing about 150 bales/year/ horse. It would be best to get the advice from some old gnarly geezer cowboy who has done this, as you get started.

And then there is $$$ in specialty crops like pumpkins. 3 to 5 acres of pumpkins paid most of the expenses for 2 of my kids going through the U of M. Most of that field work was done with the 8N, but the fall plowing required some bigger equipment.

Good Luck,

Paul in MN

Replies:

• Re: OT What should I do with 25 acres of crop land? soder33 10:30:30 02/01/11 (0)

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