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Comment by jenscow | Hacker News Reader

Or just increase wages and increase prices.

Second part is not that simple in global economy if you have Chinese cheap labor as direct competitors especially in the food industry where margins for farmers are already too low.

I would recommend Jeremy Clarkson - "Clarkson's Farm" first year of operation on a 300 acres farm made a yearly profit of £144 :)

I might be wrong, but I thought he was factoring in all the equipment he bought in that first year in that calculation? So next year you wouldn't have that cost.

Isn't it standard practice to amortize the cost of capital goods over their lifetime?

If it's after tax profit they were talking about then you can claim an annual investment allowance of £1 million.

https://www.gov.uk/capital-allowances/annual-investment-allo...

It feels to me like having 144 profit on a 300 acre farm is closer to an accounting / tax choice then true measure of profitability. Another poster mentions writing off all equipment during the first year in that calculation.

It absolutely was an accounting trick, done in the name of TV ratings. This is Jeremy Clarkson - he's a TV personality and things done on his TV shows are not to be taken seriously.

The farm had a grain business, sheep, a farm store for veg and stuff, and grants from government for re-naturing part of the property. I have no idea how Clarkson calculated the 144 profit, but I suspect there was a lot of shenanigans do arrive at that number for effect.

Edit - I'll add that I enjoyed the show. While obviously done for shock value (similar vein as as Top Gear and Grand Tour), it did a reasonable job showing how complicated and expensive running a farm can be.

==first year of operation on a 300 acres farm made a yearly profit of £144==

Profit in Year 1 is better than most of the startups I read about on HN.

And probably saved a fortune in property tax, and got any appreciation.

A/B test and balance sheet will show that it was very profitable.

A bit like wework, far less loss though.

I think you're also discounting that Amazon probably paid him several million dollars to film that show and he also made a lot of stupid and poor decisions for the purpose of entertainment. So while a lot of his struggles are real his actual revenue number is completely unreliable. Also most farms don't start off by buying a several hundred thousand pound Lamborghini tractor and getting all of their equipment every year.

That's sad the show is great entertaining and informative so totally watch it

His series production earnings are not important in this context as the main topic is how UK farmers have lot of crops/fruits rotting on the fields as they cannot find people to work.

Was trying to say that it is not easy to be a farmer, I watched few youtube guys in america saying the similar thing, earnings are tied to subsidies and also fluctuations in crop price, and can literally mean boom or bust.

That’s a lot better than most small businesses and startups where there might not be a profit at all but lots of starting and fixed expenses. Let’s see how he’s doing at year 3 and beyond.

Not sure what style of accounting shows that profit, but it's very possible to be massively cash flow negative and still earn a profit on your balance sheet.

While I wouldn't expect most startups to be cash flow positive after year 1, I would expect most businesses report a profit on their balance sheet. Maybe not tech startups where it's hard to put a dollar figure on what 2/3 of a viable application is worth, but when you're buying things like tractors and land which are easy to value you should do pretty well.

Investing in real estate and farm equipment won't hurt the balance sheet nearly as much as it hurts your checkbook

If the market was perfectly efficient then nobody would earn a profit. They would simply earn money and spend it all.

Just because there aren't any monetary profits doesn't meant that we didn't become wealthier in the process. Profit and wealth is not the same thing.

Most farms are like that in the UK, they are completely dependent on government subsidy.

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