A Day with Ray A Hands-On Land Tutorial

by Kat Szymanski, RLI Marketing Manager

Awarm fall day, blue skies dotted with an occasional cloud, acres of corn and soybeans ready for harvest, shiny silos and white-washed farmhouses breaking up the horizon. It gave us an instant idyllic impression of life on an American farm. Our day touring Illinois farmland with long-time RLI member and 2012 RLI National President, Ray Brownfield, ALC was about much more.

In October, Ray invited the six of us on RLI’s staff to “tour the land,” an invitation we all quickly accepted. The goal was to literally walk where our members do every day — on the land — to get a richer understanding of what it takes to list and sell property, specifically farmland. So, the six of us piled into trucks with Ray and his colleague Jason Lestina, ALC and set out to explore rural northeastern Illinois.

Cropland Listing 101

The day began with on-location training on the complicated process of listing cropland. Ray chose a property that while recently sold, had been on the market for nearly a year. A novice glimpse across the fields left us curious. Flat farmland is good, right?

Ray, as a seasoned pro, knew immediately that drainage issues were going to be a primary problem in moving the property. The need for improvements to the tillable acreage was further complicated by an owner who overestimated the value of his land when first deciding to list. A variety of factors determine the price of a farm: soil ratings, topography, drainage, tillable acreage, production history, water rights, structures on the property, area comps. The seller was fortunate to have the guidance of an Accredited Land Consultant like Ray with years of experience in lands sales as well as ag financing and farming.

After months of improvements to raise the land quality, including an expensive project to install drainage tile, the owner hit a stroke of luck: A high-performing, high-demand farmland market met with his revised and more realistic price expectations. A buyer was found, and the farm was sold.

“The day we all spent together was almost perfect and was an excellent opportunity for everyone to gain some knowledge of the highly technological facets of farming in the Midwest and the costs to do so. Fortunately, it was not a rainy day and it was a chance to hold this show and tell meeting on my family farm where I was born and raised, and show everyone the 1942 Farmall tractor I learned to drive when nine years old. Now an antique just like me.”

– RAY BROWNFIELD, ALC

To Market

Our next stop took us to Blair Grain where local harvests are aggregated in towering grain silos, much of it ultimately destined for Asia as feed. Our guide, Cade Feke, got us up to speed on the vernacular of yield, crop moisture, FDA and USDA inspections, commodity futures, pricing.

It was a quick tutorial in all that goes into getting a crop successfully to market. There’s a lot to consider. In fact, our guide recently completed a college degree in agriculture. Today’s professionals need expertise in biology, conservation, chemistry, economics, marketing, and business.

Long before a crop gets to market, farmers try to account for the cost of production, yield expectations, risk tolerance, the ideal moisture for crop storage, and the timing of delivery to get the best prices for their products. Making it in agriculture today takes a sophisticated understanding of not only how to successfully grow crops, but the marketing plan necessary to sustain a profitable business.

Harvest Day on Ray’s Centennial Farm

Our final stop was what we’d all been anticipating since Ray’s invitation—an afternoon on his family farm.

The Hapenney-Brownfield Farm, located near Thawville, Illinois, is recognized by the Illinois Department of Agriculture as a Centennial Farm, a property with over 100 years of family ownership. It’s an honor shared by several farms neighboring Ray’s. The pride Ray feels for his family’s legacy is apparent both in his warm welcome to guests, as well as his care for the land. It’s a beautifully maintained property with pristine white fencing, well-cared for barns, thriving acres of corn and soybeans, a tidy farmhouse, and even a restored cherry-red 1940s era McCormick Farmall tractor.

While the day was partly about being together and enjoying the land, it wasn’t long before our theoretical lesson in agriculture became hands-on. For years, Ray has partnered with neighbors John and Marcia Hildenbrand to manage the crops on his land. Our visit was perfectly timed for the corn harvest and John was more than willing to continue our crop education while each of us rode with him in the harvesting combine.

If you’ve never been on a combine (none of our staff had), it can be intimidating. First, there’s the size. This one was nearly 30ft tall. It’s several steps up until you make it to the spacious cab (which probably could have fit all 6 of us). Then there’s its power and complexity. A typical combine has almost 17,000 parts, that’s about 11,000 more than an average car*. The headers, cutters, augers, conveyors, blades and more do several jobs at once: they reap/cut, thresh, separate, and clean the grain in one process. Finally, there’s the expense. Modern day combines can range from $300K to $600K or more. It’s a significant investment for anyone that wants entry into crop farming.

By the end of the day, John had Aubrie driving the combine herself (we were farming pros at this point). Once Aubrie’s “yield” and the rest of the day’s harvest were moved from combine to grain truck then finally loaded onto a semi-trailer, the product was off to the local grain storage facility.

While our perfect autumn day was filled with adventure, smiles, and laughs, we knew daily physical labor and a high level of expertise goes into running a successful farm. The process of buying and selling farmland is equally complex.

Ray gave us a gift as he let us explore the land and experience the joys of farm life for a day. We came with open minds, ready to learn more about what RLI members do every day. We left with both a better understanding of the challenges of land brokerage, and the nuances of the agriculture business. And, most of all, we walked away with a renewed appreciation for the hard work that is the cornerstone of the quintessential American farm.

* https://www.machinerypete.com/blogs/how-many-parts-are-in-the-combine

by Russell Riggs Director of Environmental and Sustainability Policy, National Association of REALTORS®

The REALTORS® Land Institute continues to serve as The Voice of Land for its members and the land real estate industry, and this is especially important for several issues in Washington, DC, as 2022 comes to a close. RLI has access to NAR’s team of lobbyists, researchers, and legislative/ regulatory analysts who are tracking legislative and regulatory developments and influence issues of critical importance to our industry.

Taxes

The Inflation Reduction Act (IRA) passed in 2022 originally included nearly a dozen tax increase provisions which would have had a major negative impact on real estate and/or NAR members had they been enacted. NAR’s advocacy was successful in removing these by educating Members of Congress on the unhealthy economic consequences of these proposals. The proposed changes, which were all left out of the final bill, included limitations on 1031 like-kind exchanges; increases in the top capital gains tax rate; a proposal to tax capital gains at death; taxation of carried interests as ordinary income; an expansion of the 3.8% net investment income tax; limits to the 20% qualified business income deduction and increases to the estate tax.

Rural Housing

The FY 2022 Omnibus bill provided $30 billion in loan authority for the Single-Family Housing Guaranteed Loan Program, including $1.25 billion in direct single-family housing loans to provide home loan assistance to low-income rural families. Rural Development housing programs provide affordable housing to over 130,000 rural homeowners and more than 250,000 rental units.

Financial Crimes

The FY 2022 Omnibus bill provided $161 million for the Financial Crimes Enforcement Network (FinCEN) to boost efforts to combat terrorist financing and money laundering. It also included $195 million for the Office of Terrorism and Financial Intelligence to protect the integrity of the financial system. NAR is working with FinCEN to discuss the impact of money laundering and financial crimes within the real estate sector, and submitted a comment in response to a regulatory notice regarding anti-money laundering regulations in real estate.

Conservation Incentives

The Inflation Reduction Act provided financial and technical assistance for private landowners to maintain and improve existing conservation systems and adopt additional conservation activities, such as $1.3 billion for conservation and technical assistance through the Natural Resource Conservation Service.

Flood Insurance

The NFIP avoided lapsing through multiple extensions in 2022, ensuring that 40,000 home sales per month continued to close on time. The FY 2022 Omnibus bill included significant funding for communities to respond to and mitigate the impacts of future disasters along with $276 million for flood-mapping.

Technology

The FY 2022 Omnibus bill included more than $550 million to expand rural broadband services, which will support highquality broadband infrastructure across multiple U.S. states, territories, and tribal lands.

Rent Control

NAR’s policy opposes rent control, and the national organization supports its state and local associations through grants and programs to assist them in campaign efforts on this issue across the nation. In 2022, with NAR’s support and an Issues Mobilization Grant from NAR, the Ohio REALTORS® successfully passed legislation that prohibits local governments across the state from capping or setting residential rental rates.