Starting a farm after retirement.

[RebelwoaCloo]

16-month countdown! My wife of 36 years and me are so anxious to start our new lives. We live in south Texas now but will move to Colorado or New Mexico in higher (5,000 ft.+) altitudes. We've lived in Santa Fe and Albuquerque for 10 years, but not Colorado. We wish to buy a small tract of land, like 10-40 acres, and put some cows or sheep or ? on it primarily to reap some agricultural tax benefits for machinery, sheds, etc. We're both healthy and can enhance our SS benefits by working part-time -- hopefully jobs that offer health insurance (UGH!). Does anyone reading this have some advice for us? I know there's probably a forum or two addressing this but I wanted to introduce myself first and afterwards I'll research what Early-retirement offers. We're fairly financially secure and we've always been frugal as retirement has been in our cross-hairs for quite a while. We know zilch about ranching but that's no different than any other new job we've had to learn. We appreciate any and all advice/input!!!

 

[folivier]

The biggest issue in Colorado will be the water rights. I looked into this years ago and you needed IIRC 40 acres or more to have enough water rights to do anything, garden, yard, animals, etc. So as you research pay attention to this. Other than that go for it!

 

[TwoByFour]

I cannot say about ranching, but I can comment on the idea of going to the land upon retiring. DW and I moved from the city (Seattle) with city jobs (engineer, teacher) to a 2-acre orchard in Hawaii. We knew nothing about farming fruit, and so far it is mostly about having fun - we don't need the income and don't attempt any tax write-offs (although some of our neighbors do that). Here're some observations:
- Fruit trees don't need much care, we can travel very easily at any time. Animals will need someone to keep an eye on them.
- We had a lot of up-front costs buying equipment and vehicles.
- Selling the product is not so easy. We have some channels now but end up giving a lot away.
- Pests are a constant problem. From bugs to four-legged pests. And even human ones - we have to deal with people stealing fruit at times.
- We have 2 acres, which keeps us very busy. I cannot imagine 20 to 40 acres when retired. Seems like you'd have to hire help. That gets complicated.

Anyway, Good luck!

 

[SnowBound]

My thoughts: The people that really know ranching will buy up the best land first. Be happy if you can find some 2nd Best Land.

If you have animals you are handcuffed to them unless you have employees. Forget about a vacation longer than overnight. Get really sick, chores still need done every day (been there, not fun).

BUT: Try doing a Dude Ranch vacation for a week. Get some first hand experience.

 

[brewer12345]

Hmmm, I guess I would tell you that there are probably simpler ways to just get the tax shelter. Raise hay, perhaps. I would do a lot of research as to what you need to do to get the tax benefits. I have a hazy memory of talking to a very sharp guy who IIRC said you needed $10k in annual revenue to qualify as a farm for tax purposes.

If you actually want to try your hands at farming or ranching because you would like to do it, that is another story. The nice thing about livestock is that once you sell it off for meat, you are free until you buy the next bunch to raise. If you are looking at Colorado that means at least 40 acres and I suspect your options are cattle, maybe yaks, goats, and perhaps sheep although the latter will need protection from predators). Maybe pigs, but you would have to feed them most of their diet. There is a thriving market for free range/pasture raised/grass fed meat and people will buy up to entire animals (I recently split a pig with a friend), so you will get a lot more revenue from fewer animals. If you do a semi-exotic like yaks you will need few animals to get a bunch of revenue. In many places in Colorado you will have serious predator issues with the more vulnerable livestock. A guard llama/donkey, dog and some capability with a shotgun will be necessary.

I would love to do this. Stuck in the burbs.

 

[WyomingLife]

I'd be cautious, unless you have money to lose (and you may). We once got burned on something similar. Unless you have experience and/or are willing to lose money, I'd put buying a ranch in the same category as starting a vineyard: you are more apt to lose money than make it, and the amount of work required will likely be non-trivial.

For federal tax treatment of this activity, see https://www.irs.gov/newsroom/ten-key-tax-tips-for-farmers-and-ranchers (note: that page is outdated and may not reflect current law).

Some (all?) states offer lower property taxes for land held for agricultural purposes. For Colorado, see https://www.mirrranchgroup.com/maintaining-agricultural-tax-status-for-colorado-ranches-for-sale/. I believe, but am not certain, that lower property taxes may be the primary benefit of this activity.

I concur with SnowBound re keeping animals -- it is expensive, time consuming, hard work.

 

[capjak]

Use to milk cows twice a day every day, bale hay, Straw, put bedding down pitch fork the crap out, spread it on the fields, feel silage dump it to feed the cattle, pull the calf, give shots for the sick.......go to bed and start over and your spare time fix all the equipment go to store get food etc...etc.. ....

Don't get a dairy farm....

 

[Texas Proud]

My last boss had over 250 acres... 40 was his homestead and the rest was split between cattle and timber...


Timber is the way to go... you have to have a plan for the land but he only cuts like every 20 years...


The cattle take up a lot of his time and he loses money on them every year... just not doing enough head...

 

[MRG]

Fast cars, pretty women, cocaine, gambling, or buying a ranch, when you don't know squat, have a lot in common. All these choices and you still want to hang with sheep?

You ever preg checked cattle? Pulled a calf? Seriously go do it before you buy into it.

Come to the area, hang out, January is nice. DW and I recently drove to an area with great views, water, where half the hobby ranches were for sale. There's a reason they're for sale, go rewatch "The Shining"! [emoji111]

 

[RebelwoaCloo]

Thanks, all!

I think I've thanked everyone privately and wanted to post this so that others know that I've been appreciative. I don't want anyone to think that I'm ignorant. I've received some great advice and have learned more today on this site than I knew. !Muchas gracias!

 

[lwp2017]

I’m retired. Raise beef cattle, hay, and pecans.

- look into agriculture exemption requirements for your county. Some jurisdictions require 7 years in Ag production prior to approving agriculture rate property taxes.

- what can you raise and sell locally on a small scale? Like honey, fresh berries, eggs, flowers, farmers market type items. You won’t be able to make a profit competing on a commodity level.

- never plant more than you can afford to plow under or burn.

It’s not unusual to lose crops three times in a row. I lost every hay cutting one year due to rain. Cotton farmers in my area are losing the second crop in 2 years due to heavy rains. Cotton picking machines cost over a million bucks each and take at least a thousand acres to justify buying one. There are a lot of families going into heavy debt as a result of losing quality and quantity on this year’s crop.

- you will have to learn to do everything yourself. Skilled labor like vet services, welding, mechanics is very expensive- best to literally learn how do everything yourself.
As an example I have a new John Deere tractor that is fully computerized like a car. JD software is proprietary so a simple relay requires an expensive service tech call, I can’t scan and replace myself for a few bucks for the part.
I kept my old 1974 John Deere, mainly because I know how to keep it running.
Consider subscribing to Farm Show magazine, lots of good ideas to make money on a farm at low startup cost and also how to repair old machinery. It’s in in newsprint style magazine.

Unskilled labor is non existent, you will do it yourself. High school kids don’t work anymore, they don’t want a job. Menial tasks are being automated with expensive machinery. As an example I use to work on a hay hauling crew as a kid for two cents a bale, all my high school friends did. But not anymore.
My buddy who raises 75 acres of irrigated hay-square bales for horses - bought a machine that groups hay into squares of ten bales. Then he has a second tractor mounted machine pulled by a tractor that has hooks that grab all ten bales and puts it on a pallet. He has a forklift that stacks pallets onto trailers and in the barn. He could not get dependable help.

My other friend had a very successful fence building business. He recently relunctantly closed it. He had an ex-convict as a long time foreman and lead worker who unexpectedly died. He couldn’t get anyone to work, the job was too hard for the snowflake generation and didn’t pay like the oil fields for real men that can do hard work . He built a fence for me and went through five, 17-20 year old employees in about five weeks, they just quit showing up to work. Him and I, two mid 50 year old men, finished the job in the evenings after putting in a full day at our day jobs.

5000 feet and high desert will be a special challenge. Short growing seasons, arid and dry. Surprise frosts can be heartbreaking.
Hopefully there will be a good county agent and Master Gardeners type group to learn from.
May seriously consider rainwater harvesting and storage to supplement household water and for garden.

Good luck and have fun making new memories!

 

[Bamaman]

I remember much of the land in Colorado to be expensive. And the land that's not expensive is not somewhere I'd like to live.

Getting setup to bale hay is going to be well over $100K for used equipment. 80 hp tractors, mowers, tedders, rakes balers and the equipment (trailers and trucks) to handle them is a major investment. This is not something you can do with a compact tractor.

 

[Mr._Graybeard]

DW and I own a 45-acre farm. Our approach is to let someone else do the farming. We collect rent and still get the reduced agricultural property tax rate on acres in production. The income covers most of our prop tax bill.

As for livestock, we had half a dozen chickens ... we're now down to two. They're about ready for assisted living (note: when the livestock get names, they're pets, not livestock).

 

[W2R]

Caveat: I'm a city girl and know nothing about farming.

I'm not sure from your post how old you and your DW are. I am 70, and my observations (which may not apply!) are that quite a few people find that arthritis becomes more and more of a problem for them as they progress through their 60's and 70's, even if they weren't terribly afflicted in their 50's.

Now, my grandmother had a small farm of maybe an acre or two, which was enough to provide most of their food. (They had a larger tomato farm when they were younger and had always farmed for a living.) My grandfather became totally blind at about age 50 so his contribution after that age was limited. In her old age, when I knew her, she farmed that acre or two at least until her 80's. I remember her out there leaning over or kneeling down to cultivate and tend to her vegetables by hand for many long hours. But I also remember how painful it became for her to do this when she got older. She was a tough person and didn't complain, but I could tell it was terribly painful for her. She canned the vegetables and stored them in the root cellar under their small house and this plus a few chickens was most of their food supply all year around.

Anyway, I guess my point is that if you do this, great! But be sure that you have an exit plan for your later years, in case you need it.

 

[Red Badger]

Grew up on a farm.

If you buy a farm, you're not retiring, your re-purposing your work. And may lose you're ass in the process.

Not saying don't do it. Saying what all the other posts said, know what the hell you're getting in to. Maybe start with a few acres, and small livestock like chickens, hogs, and sheep. Yeah, once you name them, you just have very large pets.

Also, you now have furry, golden handcuffs. The odds of finding someone to tend your critters while you whisk away on vacation? Priceless!

 

[ivinsfan]

Your last line that you know zilch about ranching pretty much say it all. Take it from who has farming in the family for over one hundred years. Grain, dairy, beef cattle, you name it research every single problem that might come up and then double that number....

It sounds nice but the reality can be very different, experience is a cruel teacher when "learning" to farm.

 

[ivinsfan]

Your last line that you know zilch about ranching pretty much say it all. Take it from who has farming in the family for over one hundred years. Grain, dairy, beef cattle, you name it research every single problem that might come up and then double that number....

It sounds nice but the reality can be very different, experience is a cruel teacher when "learning" to farm.

As far a not being different then any other job you needed to learn. Have you every been your own boss? Or your own banker? Every delivered babies and taken care of sick people animals. Ever had a check a cow in labor every two hours all night long? Ever sent your cattle to market and come home with less money then you put into raising them? I could go on but I don't want to ruin my day. I meant to edit not quote my own posts...having too many bad flashbacks to the "learning years"

 

[Choices]

We have the beginnings of a hobby farm, chickens and garden. We feed my son’s quail when he is out of town. Our hobby is 365 days a year. We are holding off getting the goats and sheep and more dogs...
Our neighbors are dairy farmers and have timber, hay fields and make maple syrup. Their days start early, the wives have “ town jobs”. They work harder than anybody I ever met!
My highly educated spouse sometimes helps out, twice he spent 8 hours in the rain pulling buckets of maple sap. He also catches and stacks bales of hay, until the local high schoolers get out for the day. I learned the meaning of “ make hay while the sun shines”.
I have a lot of respect for where my food originates and how cheap it is. No way would I become a farmer, but my son dreams of it...

 

[haha]

People who want to do this have some special desire that I can't understand. They want to work all the time in all kinds of weather with expensive equipment that is always breaking down.

If you or your wife love animals, visit a petting zoo. On a farm, you'll have to kill these animals. If I am going to be killing animals, I'd rather it be animals that I don't know personally. And killing hogs. ...they would strongly prefer that you not cut their carotid arteries. And they are quite expressive under these circumstances.

Sheep are good because they are pretty small, and really dumb so you get less of a death serenade.

Basically farming may be ok for an incredibly wealthy but odd person who would rather spend his money on upkeep of everything with no staff than just go hang out on the Cote d'Azure for less money.

Ha

 

[Mr._Graybeard]

Chickens are a nice entry point. They produce eggs, so you don't have to kill them to make a profit. Of course, you can kill them-- broilers are productive meat birds, and their production cycle is pretty short. You can raise a flock in two months, "process" them and you're done until your freezer is empty.

Plus, chicks are dirt cheap. Feed is cheap. Maintenance is minimal.

 

[Texas Proud]

Your last line that you know zilch about ranching pretty much say it all. Take it from who has farming in the family for over one hundred years. Grain, dairy, beef cattle, you name it research every single problem that might come up and then double that number....

It sounds nice but the reality can be very different, experience is a cruel teacher when "learning" to farm.

Come on man... it is not like Green Acres!!!




j/k

 

[brucethebroker]

If you want to avoid the part time work for health insurance gig, look into ACA, then:
1. "Manage" your income to come in under MAGI limits to maximize tax credits.
2. Write the remaining premium off as a company paid, family employee expense.
Be sure to seek the advice of your CPA regarding this.

Isn't business/farm income subject to FICA? If so, your taxable income/contributions, even small ones, should count towards your total quarters needed to qualify for full retirement benefits with SS. Lower income may reduce your benefit (top 35 years average) but may be a better trade off than most PT jobs. Again, call the CPA.

 

[pjigar]

Don't bet your farm. I dream farming and I have done farming in my childhood years. After all my research and reading, I realized that you can't earn living by farming in this country unless you farm big. Small farm can earn you food you eat and that's about it. I have a green thumb and I can fix/build anything (mechanic, welding, machining, woodworking, construction, electric, plumbing, etc.). So I AM going to be farming but not for money.

PS: I do gardening today in my tiny backyard. I already bought a farm property. I tell you that anything I have done on the farm takes twice as long because every project gets interrupted with broken equipment, weather, and just me enjoying the farm while working. My plan is to start farming slow while I have a highly paid day job. I will reset my expectations and plans based on how I do on a small scale. I am ready to adjust either way. My only advise would be to start slow BEFORE retiring.

 

[MRG]

We lived on a hobby farm for ten years. Never had larger animals only chickens or ducks. Our neighbors had 50 meat cattle.

Occasionally a cow rejects its young and either you put them down or you have a bottle calf that you feed all day and night just like momma would. My wife liked to go visit the neighbor when she had a calf. You haven't lived until you've raised a calf in your home. They don't potty train.

Of course once you've spent hours feeding and caring for a calf it's pretty easy to become attached to your dinner.

 

[CRLLS]

We have a few farmers in our extended family. They ran family farms of about 80 acres each. A couple grew corn and beans, One of those had a small vegetable garden and stand on the side. Another farmer was a dairy farmer, and grew corn hay, clover and alfalfa. They also did anything else they earn money at such as raised chickens, bees etc.

The children who grew up on those farms learned one thing while growing up on a farm. Farming is a hard life. None, NONE of those children grew up taking over the family farms. They all went to work elsewhere in the 8 to 5 world. That should say a lot.