Earth Protect Blog

Dwindling profits, high taxes spell end for small farms across Midwest

By Alyssa Schukar

© The New York Times Co.

In his earliest memories of his family’s farm, Ethan Uhlir rides in an old truck with his grandfather Arden, feeding cattle and mending fences.

Before Arden Uhlir’s death five years ago, he “reminded me that I was a good cattleman,” Ethan said, and “I have to keep it like that.”

Ethan, now 17, still notices his grandfather’s wiring technique in fence posts scattered across the farm in the rolling plains of northeast Nebraska, along the South Dakota line. He walks along the same paths as six generations of Uhlirs, but Ethan may be the last to work the land.

“There’s enough labor for four people but not enough income for one,” his father, Jeff, said.

Like most farmers, Jeff Uhlir sells his cattle, corn and soybeans at prices set by a global commodities market, but only large farms can absorb the narrow profit margins.

Although the family’s small farm is valuable — its 880 acres are assessed at $1.3 million — property taxes eat up most of the money it does make.

Even in a good year when the farm grosses $60,000, Uhlir feels lucky if he has money left over for savings.

“I’ll have to work an hour before my funeral,” Uhlir, 51, said. “I have no retirement.”

For families such as the Uhlirs, farming is increasingly unsustainable, as drought and extreme weather, fluctuating commodity prices and rising costs alter the economics of running a small- to midsize operation. Hundreds of family farms file for bankruptcy each year in the United States, with the largest share routinely coming from the Midwest. Nebraska’s high property taxes, which it collects from its 93 counties and reapportions, are compounded by Knox County’s shrinking population.

About 8,400 people live in the county, down 26.8% over the past 40 years. With fewer taxpayers, farmers who own hundreds of acres must shoulder the cost of schools, roads and other public services. After paying for necessities such as fertilizer, seed and pesticides, Uhlir must cover a $15,965.68 property tax bill.

Nebraska’s agricultural land property taxes are 46% higher than the national average, according to a 2019 report by the University of Nebraska, and most farmers pay 50% to 60% of their net income in taxes.

Sixty percent of Nebraska property taxes pay for schools.

Next fall, Ethan Uhlir hopes to pursue an associate degree in nursing. “I don’t think that I would be able to financially sup-port myself just living off the farm,” he said.

On a crisp, bright afternoon in early October, Ethan Uhlir watched his father weld their broken 1980s combine harvester head. Most of “the equipment we have, my grandfather bought,” Ethan Uhlir said.

He once hoped to be named the National FFA’s “Star Farmer,” just as his grandfather Arden was in 1960.

During the 1980s farm crisis, Arden Uhlir nearly lost the farm. He took on debt and worked to pay it off up until the last few years of his life. His wife, Karen, worked for 16 years in an Alzheimer’s unit at an assisted-living facility in Verdigre.

“They never went to the dentist. They couldn’t afford to,” Jeff Uhlir said. “They never went on vacation. They never spent any money on each other.”

Seeing his parents struggle, Jeff Uhlir has avoided debt.

“I’d love to be able to buy land close to me and expand what I do, but there ain’t no way at 51 years old,” he said. “I’d have to live to 160 to be able to pay it off.”

Uhlir’s financial situation is worse than previous generations’, he said. “Every year, the property valuations get higher, and everything else don’t keep up.”

The family has farmed the land for 151 years, he said. “How do I sell it?”

Payday comes once a year on the farm: in the fall, when Uhlir sells cattle and crops.

Knox County classifies four soil types when taxing agricultural use of land, and much of Jeff’s soil received the highest rating and a higher tax rate, despite lower yields than farms in other counties with less sandy soil.

Farming becomes more challenging as he ages, Uhlir said, and he wonders what it will be like without Ethan next year, when he’s at college. “As my helper goes away, things get tougher.”

“At some point, the people raising your food are going to be dead,” Uhlir said. “Once we’re gone, we’re not coming back.”

The family has survived plenty of physical and personal hardships. Just months after taking over the farm in 2016, Uhlir broke his neck in a car accident. And on Mother’s Day 2020, most of their home was destroyed by an electrical fire that started in the attic.

The expense of unexpected health issues worries Uhlir, who told his wife not to call the ambulance if he has a heart attack or stroke.

“It would break my heart if this place got lost because of me, and I’m not going to be whole again if that happens,” he said.

Every year, Uhlir travels to Lincoln, the state capital, to testify on property tax bills. He also is appealing how the county taxes his land.

When Ethan takes over from Jeff Uhlir, he probably will continue to work in a health care facility an hour or two away.

To cover the property taxes, he might rent the land to another farmer or take part in the federal Conservation Reserve Program, which rents farmland for environmental restoration.

“It’s been in the name this long,” Ethan Uhlir said. “I don’t want to be the weak link and lose it.”