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Veteran Contributor
Posts: 140
Registered: ‎05-30-2010
0

Inflation

So I bought a farm for $10k/ac 6 yrs ago, and I have rented several farms for a price that many thought was too high. The rents haven't changed and neither have my farm payments. Guess what did change, my yields. I have made money every year On these deals even with low commodity prices. I just harvested 95 bu average full farm irrigated beans on that farm I bought, I'm gonna be harvesting 300+ corn this year. The point of all this is the rapid inflation in yields might be out stripping price declines and when it doesn't the price will come back. Still holding 2013 ave per acre gross income and inputs are coming down. The beat goes on and I don't see very many retirements or guys going out of business if everyone has much better than expected yields this year again
Honored Advisor
Posts: 14,901
Registered: ‎05-13-2010
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Re: Inflation

The "seed size" of corn and beans must be the hidden equation this year.  Maybe we`ve obtained a new yield plateau even if we didn`t maintain a new "price plateau".   And it seems non-traditional areas of the cornbelt and non "I-states" saw the biggest gains from the new genetics and fungicides.

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Senior Advisor
Posts: 1,039
Registered: ‎05-20-2010

Re: Inflation

Congrats on the big yields. You might at least honestly give a little credit to the below average temps and above avg rains in the Kentucky the last few years. Just cut a 200 acre field of beans that did 50 with an APH of 60, your irrigation wouldn't have helped it all, 20 acres at zero due to flooding. (oh yeah, the field is pattern tiled, but they don't work fast enough when the creeks and rivers are out of their banks :-)  )

 

The farm was already irrigated? If not, you have $11,500 in it to add the water right? We have looked at drip closely and just can't make it cash flow at this point. Also, what is the annual cost to push the water? $200/acre? Just trying to keep increasing the accuracy of my analysis for our home farms. Whenever I run the numbers, for our area, we harvest more bushels, cover the added costs, but have nothing left to show for the extra work. But, times change and I want to be ready.

 

 

Advisor
Posts: 2,815
Registered: ‎05-13-2010
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Re: Inflation

95  bu  beans avg.   &   300  avg. corn -  am I reading this right ? 

Esteemed Advisor
Posts: 2,468
Registered: ‎04-29-2011
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Re: Inflation

If you ain't bragin', you ain't tryin'.     

Contributor
Posts: 16
Registered: ‎06-04-2016
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Re: Inflation

KYU is exactly right - if you focus on price per bushel, you're focused on the wrong thing. Profit per acre is what I focus on. Sure, price per bushel is part of that, but so is yield and so are costs. N is going to be down for the 4th year in a row here, I rearranged some acres to qualify for enterprise units on crop insurance, allowing me to get much better coverage at a little lower price, and even my favorite corn seed number is going down $20/bag for next year!  You also have to be smart with your marketing. During the last little rally in corn, I sold several thousand bushels for between $3.65 and $3.73 - for delivery to an ethanol plant in Nebraska, next July. I do not farm a lot of acres, and that lack of size makes me focus very intently on each component of where the profit comes from. This system works for me.  Everyone has to develop a system that works for them - the important thing is to work on your system and make it a really good one!