Dan S. and Nancy J. Mitchell - Page 4

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                    Mr. Mitchell was raised on a farm in Dallas                       
               County, Texas, close to Lancaster, Texas, where his                    
               family grew wheat, cotton, corn and alfalfa, which is a                
               hay crop similar to Coastal Bermuda, and raised dairy                  
               and beef cattle.  The Mitchells live on 113.205 acres                  
               of land in Boerne, Texas, which they purchased in 1986                 
               to begin farming operations.  Although Mr. Mitchell had                
               not been an active farmer for 35 years, he believes he                 
               has and can make a profit at farming operations.                       
               Mr. Mitchell planted Coastal Bermuda in 1990 on 97                     
               acres and expects to generate from this crop cash flow                 
               of $17,640.00 a month during April to September and a                  
               profit of $52,380.00 a year, although a profit was not                 
               made in 1990.  A market exists for Coastal Bermuda for                 
               horses and cattle in the hill country area which has                   
               been enhanced by the race tracks now in operation in                   
               Frederickburg, twenty-two miles from the Mitchells’                    
               home and in Bandera, fifteen miles from the Mitchells.                 
               The Mitchells plan to plant oats or wheat over the                     
               Coastal Bermuda in winter and graze the cattle on the                  
               oats rather than buying feed, thus saving $10,000.00 a                 
               year in fee [sic] bills.  The Mitchells are attempting                 
               to obtain a FMHA loan to purchase 100 head of cattle                   
               and operating expenses for hay/Coastal Bermuda                         
               production, including drilling a well and installing an                
               irrigation system for the Coastal Bermuda acreage.                     
               Mr. Mitchell expects to make a yearly profit of                        
               $16,400.00 from the cattle.  If the [sic] the loan is                  
               not obtained, Mr. Mitchell believes he will still be                   
               able to meet the expenses, buy the cattle and make the                 
               projected profit.                                                      
          As of the date of the statement, however, no farming operation              
          had commenced.  On schedules filed in the bankruptcy proceeding,            
          petitioners stated that they owned no farm animals, farm                    
          supplies, or farm equipment.  Operating statements filed with the           
          bankruptcy court showed no cash receipts or cash disbursements              
          for any farming activity.  The bankruptcy proceeding was closed             
          by final decree filed July 13, 1992.                                        







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