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Beef is past and future

Agriculture.com Staff 03/20/2007 @ 2:04pm

When Luke Linnenbringer, Auxvasse, Missouri, started first grade back in 1986, he was puzzled why he had to go.

"He went to kindergarten and didn't miss a day," recalls his father, Hadley Linnenbringer, Jr. "When it came time that fall to start first grade, he said, 'What do you mean? I thought I was done with school.' When he went to school, one of the first things he told his first-grade teacher was that he wanted to farm."

Luke kept going to school, straight through the University of Missouri where he earned a degree in agricultural systems management. However, he never strayed from his first-grade goal.

"I have loved farming from as far back as I can remember," he says.

Raising crops in this part of central Missouri is often dicey.

"Here, we are either three weeks away from a drought or a flood," jokes Hadley. The area's thin topsoil that's underlaid by solid claypan has scant water-holding capacity for consistent crop yields. The Linnenbringers grow 545 acres of corn, soybeans, and wheat on their best ground.

The bulk of their 1,700 acres is pasture and hayland, however. Through steps like rotational grazing, the Linnenbringers tweak their pastures to grow top-notch forage for their 170 cow-calf pairs.

"We can grow grass pretty well," points out Luke. "We are best suited for cows."

The farm's crops, which Luke coordinates, revolve around beef. Six Harvestore silos play a vital role in storing crops for feed.

"We can harvest shelled corn well ahead of drydown," says Luke. "For forage, we chop alfalfa and wheat in the spring in addition to corn silage in the late summer or fall."

Luke's full-time arrival on the farm coincided with the retirement of his grandfather, Hadley Sr. At that time, Hadley Sr. and Hadley Jr. dissolved their partnership.

In January 2002, Luke and his father reorganized the business structure. They chose to operate the farm as a limited liability company (LLC), Linnenbringer Farms LLC. LLCs combine the limited personal liability of a corporation with the flexibility and pass-through taxation of a partnership. Pass-through taxation avoids the double taxation of a corporation, instead of taxing LLC members directly. This lowers their final tax burden.

For these reasons, the duo formed a separate LLC that contains long-term assets like machinery and cows.

Luke and Hadley established respective corporations in their individual names. These corporations form a partnership that makes up Linnenbringer Farms LLC.

"This way, we are paid a set salary, with the rest of our income based on (farm) profit distribution," says Luke.

This arrangement helps reduce the amount of Social Security and Medicare taxes they pay.

Linnenbringer Farms LLC provides Hadley Sr. income from the crop-share rent his land generates. Luke also leases equipment his grandfather owns on a lease-to-own basis to avoid capital gain taxes.

One challenge the Linnenbringers face is the land owned by Luke's grandparents will pass through probate upon their deaths. Luke and his father plan to continue farming and building the cattle herd so they may continue renting or buy the estate's farmland from Hadley Jr.'s four siblings.

Should plans change and their land base shrinks, Luke is trying new ideas to enable the farm to continue. He facilitated an arrangementwith R & R Processing in Auxvasse to process and distribute the farm's beef. He now direct markets 50% of the farm's beef, up from 10% in 2001. Eventually, Luke hopes to market all beef directly.

The price they receive is higher than what they'd receive selling to a packer or sale barn. A split-calving season -- two thirds in the spring and one third in the fall -- enables them to sell beef nearly year-round. Direct marketing is also a way to be known for raising quality beef.

"Customers will say, 'I want that Linnen...Linnen...well, I can't say it, but I want that beef that starts with an L,'" says Randy Breneman, R & R Processing owner.

Says Luke: "That's what I like about direct marketing. You get to work with your customers and sell them a great product."

Luke and his father are also constructing a 70×90-foot building modeled after an old-style traverse-crib barn. One end will become a farm shop and include attributes like floor tie-downs and a hot shower room. The other end will have two stories that could help create non-farm income sources, such as a cafe for local people or guest bedrooms for agritourism.

"Whether we do it (agritourism) remains to be seen, but we are in a great location -- two hours away from both St. Louis and Kansas City," says Luke. "People could come here for a weekend trip."

Besides generating income, Luke believes agritourism can provide a positive farm life educational forum.

"People should know where there food comes from," he says.

Luke's enthusiasm for farming resembles the wide-eyed enthusiasm of a major-league baseball rookie.

"I think raising a family on a farm is the only way to go," he points out. "But you need to separate the business aspect from the personal aspect. It's still a business."

When Luke Linnenbringer, Auxvasse, Missouri, started first grade back in 1986, he was puzzled why he had to go.

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