Assignment 6A

Four opportunities:
1 - Sell cattle
2 - Property
3 - Start a corporation
4 - Get involved with/start a farm

1. The first opportunity that I found was to sell cattle. I found this opportunity specifically because I was looking for it. I have a small number of cattle myself, so I periodically look at some of the market trends in the state to determine when would be the best time to buy or sell animals. This particular website (Drovers) is one that I have frequented in the past and found to usually be relatively accurate for my area. The customer for this opportunity would likely be smaller scale cattle producers. They will want to seize the opportunity to make a slightly higher profit margin than their normal one, because this is an industry that has very narrow margins. I feel that the opportunity is relatively easy to exploit. If someone is already in the industry and owns cattle, they can take animals to the market any given week and sell their animals. If they knew that on a specific sale day was going to yield higher prices than another, they would be able to bring animals that day rather than the sale before or after.

I feel that I found this and believed it because of the fact that the particular site and person that wrote the article have been correct in my past experiences. The first time that I tried to follow the trends to sell a calf at the right time, I was skeptical that any of the 'experts' online would likely not have any real world practice. However, I have found this site to work well, and will continue to read through it in order to have a guideline for what to do with my animals.

2. Another opportunity that I can see is buying property in the rural portion of Sumter County. I feel that this is a venture that could prove very profitable in the long run. I found this idea by simply driving to and from Gainesville to UF for the last three and a half years. There are always properties in this area that are for sale, and the construction lining the roads in a good deal of the area shows that it will do nothing but continue to grow. I feel that an opportunity might exist here because of the areas that it surrounds. Ocala is not very far north of here, and already has begun to show sprawl into the surrounding areas as people move 'to Ocala' but are actually 20-30 minutes from the technical city itself. Prototypical customers for this will range. Some people, such as my grandparents, may buy property here with the knowledge that the land may be worth more in the future, and they may stick with their one ten acre piece. On the other hand, a company such as LandSouth may come in, buy all of the land that they see for sale (and make offers on some that are not for sale) and sit on it for the next ten years, until they feel that the price is at its peak. The work involved with this opportunity is completely minimal, meaning that it is very easy to carry out. However, it is also very hard to get the funding necessary to do this on a large scale.

I feel that I have a unique perspective because I can see multiple uses for this land. For some people, they would look at it and expect nothing but apartment complexes. For others, they expect one house per at least 10 acres and animals to be spread across 9.75 of those acres. I fall somewhere in between. If I were given enough money to buy the land, I would want to prepare it into different increments. For some of the plots, subdivisions or apartment complexes will be built and people will feel as if they are living in a city. In other areas, one house will be built every so often and the rest will have fences for cattle. Lastly, some will be left with nothing but fences, so that people can use the land to farm, have a pasture or to build their own home. This ability to view the land from more than just one perspective makes me feel that I have an advantage over some others in this venture.

3. Another potential opportunity that I found is to start a corporation. In the past, there have been many pros and cons to having a corporation rather than other forms of businesses, such as sole proprietorships and partnerships. However, the main con of corporations has always been the fact that they were taxed more harshly. Now, however, the corporate tax scheme has changed. They are still taxed differently than the other forms of businesses, but they are taxed a flat rate now, making it easier to keep track of how much you will pay in taxes at the end of the year. I learned this information in an introduction to finance course this semester. I believe that this may pose an opportunity because in the past, taxes were the main thing that would keep a business from going corporate. While corporations are still taxed twice (once as a business, once as employees receiving a paycheck), the complexity of the system has been demolished, making it simpler and easier for accountants to follow. The most likely people to take advantage of this are companies that are larger partnerships and could already be on the brink of becoming a corporation. I feel that this could be very easy to exploit in some cases and very hard in another. For groups that are already large and similar in size to smaller corporations, it will be an easy transition. For groups that are small and not the prototypical customers, it would be more challenging.

I feel that I understand how this could be an opportunity more than someone else simply because of the things that I have learned at UF. Beforehand, I would not have believed that having some debt was considered a good thing for a business. Now, I have worked through scenarios and had it explained to me the possible amounts of profit made with and without debt, and I can see why it CAN be a good thing now. In this situation, while you are still not going to save money on your taxes by going corporate, now that it is simpler I understand that it could still make you more money. By bringing in more outside investors and getting rid of all liability that individual partners had before, it can spring a company to a whole new level.

4. Recently, tariffs were imposed by the US government on various goods, making many wonder what would happen to our country's imports and exports. Since then, the price for many of the crops that we grow has gone down to lows for the last year. As things such as this begin to happen, some people will begin to get nervous while others will jump the gun and sell out immediately. As people begin to liquidate their land and their farms, the prices will go down to levels lower than you would see on a normal day. I have been taught in several different classes about the new tariffs imposed and their potential impacts, which is what brought my attention to this matter. I feel that an opportunity might exist because after the things that I have learned, I did more research and found the information above about the prices of crops such as corn reaching their lowest price for the last year in recent weeks. I feel that if new players do not enter into this market, the prototypical customer will be larger farms in the areas of the small farms that begin to sell. As the corn prices go down, small farmers will not be able to afford the loans that they took to begin the farm and will therefore be forced to sell. This is an opportunity that can be VERY hard to exploit. If one has the money to be able to afford such a venture, however, then it simply relies on dedication.

I feel that I am again specifically prepared to view this as an opportunity because of the recent education that I have received on matters such as this. One of the classes that I am currently taking is an Agriculture Policy course. In that class, we have spent a good deal of time discussing these tariffs, the fluctuations that agriculture follows on its own and many other things such as this. Without that, I would not view this as an opportunity right away, so I would expect that to be the difference maker for me.