Also, there will be some hefty tax consquences for your father in law, if he just decides to sell everything off at once. If this is going to happen for you over the next 10-15 years, I hope that you will be slowly buying into the operation, to lessen the tax burden that your FIL will have.
Thanks for your input and advice. There are definitely a lot of different factors and information that we need to know more about as we move forward. But, by the way I know they operate and by small conversations, it sounds like my FIL wants to sell it off slowly, which would help everyone out greatly finance and tax wise - we think. Our BIL is also an estate planning attorney and has been giving us advice on what the best steps are to take, but it just seems like a scary process to me. I haven't grown up in the farm industry, so I am not accustom to the violatile income that it brings. I guess that's the biggest part that we are worried about right now.
If you can set everything up to purchase on contract, it'll help keep your costs at a minimum (versus paying 5-7k an acre outright, assuming that price in your neck of the woods...I could be way wrong), along with the expenses that come with purchasing all the necessary machinery, or hiring parts of planting and harvest out.
We farm about 1800 acres of corn and soybeans, usually heavy on the corn, 1000-1100 acres a year, and the rest beans. I work with farmers on a daily basis as an insurance agent in a rural area, so I can tell you with great certainty that with corn input costs, for an entire year, is going to run about $500-$700 an acre - that's north of $650k every year, just to plant and harvest the crop. Now, there are some guys that have that cash from the good years (2008-2013) and don't have to borrow a ton, but that's usually borrowed on a line of credit, that is paid off every year, which is why farming debt free is so tough. Those guys that have the cash have paid for ground, or inherited ground, and don't have the land costs involved. Hell, our cash rent that we pay on 1000 acres of ground (the rest is owned or crop shared) runs $225,000 a year alone, that's just the funds to get the chance to farm, not seed, not machinery, not insurance, etc.
By the way, I'd recommend you guys going and meeting with your FIL's crop insurance agent, as it's VERY useful to have, and it's something that any farmer needs to know how it works. There are guys that don't carry it, but they are risking a lot every year. Since crop insurance can now be insured as revenue, versus bushels an acre, it can help you minimize losses if you have a crop failure, or a less than average crop. Feel free to PM me with any questions.
**I should say...I'm a hired hand, tractor driver, persay. I have no capital outlay involved in the operation at this point, but I have created a breakeven tool for our farm customers that allow them to calculate their yearly breakevens based on input costs, projected yields, and projected pricing. So, I've had a lot of experience in talking about input costs, which is some of what I have mentioned above.