Honorable State Senator Patty Pansing Brooks;
Honorable State Senator Adam Morefeld;
Honorable State Senator Matt Williams;
My name is Guy Mills Jr. I am a farmer who operates a sixth- generation, 138 year -old farm in Custer County. Today, I would like to address your recent comments about “How much money do farmers make? “as this pertains to your perception on property tax relief and the ability of landowners to pay real estate tax. The short answer to how much money do farmers make is: just enough to keep Nebraska’s economy viable and people employed. Nebraska has enjoyed prosperity in agriculture, thanks, in part to the ethanol industry. The result has been growth in Nebraska’s economy at a time when other states since the 2008 financial crisis have struggled.
Agriculture is one of only a few industries in this country which creates new wealth. An irrigated center pivot under corn is estimated to have a multiplier effect of about 7 times in the economy. So when farmers make money, Nebraska and other related industries benefit. The 112000, dollar profit you mentioned is only part of the story. It may take a huge investment of several million dollars to realize such a profit. Many of these farms will pay more in real estate taxes than this amount of profit. A seed corn purchase may take as much as a quarter of a million dollars to plant the acres to realize this profit. There is a great amount of risk involved to generate a crop, but fortunately for Nebraska’s economy there are farmers willing to take such a risk.
The” incredible success “of agriculture which you made reference to, has been a result of hard work and innovation by farmers and ranchers. One should be thankful for these accomplishments and cognizant of the facts surrounding agricultural production. There have been many cycles in agriculture, some good, and some bad. We, in the Ag community, have entered a new phase as outlined in the attached article.
The Real estate tax is problem for agriculture. On our farm, these taxes are bigger now than the original purchase price of the land on certain parcels. This expense continues to increase.
Other states have much lower real estate taxes on farm ground. Minnesota farmers pay between 5 and 10 dollars per acre with Texas having similar amounts, whereas; some of the finest farm ground in the world located in Illinois has only 50 dollars per acre. What this means is that there is a geographic disadvantage which will stifle the younger generation from entering Nebraska agriculture. These young farmers will not see lower rents, because a landlord in Nebraska will be unable to lower the rent due to high real estate taxes, to help them out in profit- challenged environment.
Reducing spending in school districts should be seen. In about 1970, the budget for Ansley’s school district was ninety thousand dollars. Today it is 3.8 million dollars with fewer students.
Please review the following attachment from the Kansas City and Omaha Federal Reserve regarding the situation in agriculture. It clearly outlines conditions which could impact agriculture and may give you better insight on how Nebraska’s most important industry operates.
Thank – you for your time and consideration.
Guy Mills Jr.