The Salina Journal from Salina, Kansas on February 2, 1986 · Page 29
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The Salina Journal from Salina, Kansas · Page 29

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Salina, Kansas
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Sunday, February 2, 1986
Page:
Page 29
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Great Plains The Salina Journal Sunday, February 2,1986 Page 29 s, 'ALEMSBORG — Calvin Carlson thought long and hard before he sold the pasture land his father purchased in the 1970s so his sons could follow him into the cattle business. It took him a year to decide that 640 acres of land weren't worth the financial drain they were causing. Carlson's decision brought a sense of relief. It also made him one of the growing number of fanners who don't own any farm land. "Selling land was something we did to improve our cash flow," Carlson said. "Interest accounted for 20 percent to 25 percent of our yearly expenses. "Owning land isn't that terribly important to me. I'm not saying I wouldn't buy land in the future, but I know farmers who have lived on rented land all their lives and they're happy and doing all right." Carlson, 27, farms in the shadow of the Salemsborg Lutheran Church. His brother, Mark, 31, is a partner in the business, although until May his major source of income will come from a construction job he accepted in Oklahoma. A younger brother, Wayne, also helps with the farm. The family's main business is selling Simmental bulls and heifers to commercial breeders. The Carlsons have 160 head of registered Simmentals and they rent 1,600 acres of grass land and 450 acres of crop land, most of which is used to grow feed for the cattle. Their interest in Simmentals dates back to Calvin's late father, August, a noted Saline County cattleman who abandoned a registered Hereford herd in 1969 to start raising Simmentals. ' 'I think he passed his love of cattle on to my brothers and I," Carlson said of his father, who died in June 1983. "Dad always said, and I think it's true, that our cattle always paid for themselves." It was the land that was draining the economic lifeblood from the Carlson farm. August Carlson purchased the 640 acres for about $325 an acre. He wanted to expand his operation so his sons could follow in his footsteps. The Carlsons finally sold the land last spring for $225 an acre. In the year it took to make the decision, the value of the ground fell by about $100 an acre. Calvin still considers himself fortunate, however. "Today I'd be lucky to get $175 an acre," he said. His wife, Shelly, who is responsible for the bookkeeping, said the decision to sell the land lifted a tremendous financial burden off the shoulders of her husband and brother-in-law. "I'm sure there are a lot of farmers tied to the land and it's hard for them to give it up, but in our case, we could see it was the right thing to do," Carlson said. "We've since found out that we can be happy, productive people without land. "Instead of expansion, we want to become more efficient.... Each cow has to pay her way, and we're looking into alternatives to wheat and milo." Dave Smith, president of Salina's Production Credit Association, said the Carlson family's decision to sell the pasture land turned a bad economic situation around. "I believe that many of the financial problems today can be solved if farmers will make the correction while it still works," he said. "To simply hang on and hope things turn around is suicide." Extension agents and lenders across north-central and northwest Kansas say they are seeing more farmers rent land, although no figures on the number of rented acres are available. The reason for the return of the tenant farmer can be explained by Carlson and others, who for the past several years have been caught by a harvest of troubles in rural America. Low income and high debt are increasing the possibility that many more farmers will lose their land and resort to renting to stay close to the soil. Renting land — and even equipment — also is a way for the young farmer to get his foot inside the barn door. "Renting land is a good deal because you're able to use your capital for machinery and cattle," said Carl Garten, Saline County extension director. "It's a way to spread out your equipment over more land." He said farmers began to rent land when prices skyrocketed in the late 1970s and early 1980s. The practice became even more common when inflation slowed and land prices started to decline. Commodity prices also began their downhill slide at about the same time, meaning there was little chance land purchased at top dollar could produce a cash flow for its owner. "Today you're better off if you don't own any land, or if you do own land it had better be paid for," Garten said. Allen Dinkel, Rooks County extension agent, said when he started with the extension service six years ago, "the craze was to own land because God wasn't going to make anymore." That no longer is true. He said the problem now is finding enough land to meet the demand of renters. "Rent has been a real good thing in that farmers have someone to share the risk with," Dinkel said. "There's some land around to rent, but not enough." The dark side of the rent picture is trying to please several landlords at the same time or having to share not only the risks, but also the financial gains with another person, he said. The traditional arrangement on a share crop agreement is one-third for the landlord and two-thirds for the tenant. Cash rent is less common, although it is often preferred by absentee landowners. Garten said the cost of cash rent has fallen with commodity prices and land values. In Saline County, for example, a farmer can expect to pay from $20 to $28 an acre for cash rent, compared to $30 to $35 an acre a few years ago, he said. "Farmers simply can't afford to pay what they have in the past," Garten said. Adding to the uncertainty is a federal farm bill that is expected to drive prices even lower. Dinkel predicts Photos by Scott Williams WANTED: Acres of farm land to rent Calvin Carlson, Salemsborg, walks with his cattle. Carlson Is among the growing number of farmers who don't own farm land. Here he tosses a bale of feed to his cattle. cash prices for wheat could be as low as $2.10 a bushel this summer at harvest. Still, he and others, such as Bill Dowell, president of the Federal Land Bank Association of Colby, believe now is the time to buy land. "If there's any optimistic side to this whole thing, it's that things are the cheapest they've been in 20 years," Dinkel said. "If you've got a little bit of capital and you want to farm, now is as good a time as any." Dowell said the price of land appears to be near the point where it will cash flow. Signs of this are reports from real estate sellers of renewed interest in farm land, he said. As with anything to do with agriculture, however, most people agree buying land is still a gamble. Dinkel said if the farm situation improves in the next couple of years, farmers who buy land now could be winners. If improvement takes longer — four years or more—they could be losers. Farmers such as Calvin Carlson aren't willing to take the risk. "I think a lot of people are staying away from buying land even though the prices are low," he said. "I think people are still a little bit antsy." Story by Linda Mowery-Denning Calvin and Shelly Carlson discuss the future of their farm.

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