cancel
Showing results for 
Search instead for 
Did you mean: 
Senior Contributor

2014 cash flow

Just got done at bank getting ready for next year, and man it doesn't look great, I am afraid to say I'm just planning on breaking even, and I don't pay terrible high rent.I said to my banker that it shouldn't matter because most guys have tons of cash right now and he  laughed syaing that all the cash is sitting in machine sheds in the form of green  and red paint. He said his lending institution is very worried about 14 and extremely worried about 2015. 

Finally I think it says alot about AG when  many people in it, want their product to fail so they can have a big price again. i.e. Crop disaster. Thats no shot at anyone,but isn't that odd.

0 Kudos
9 Replies
Honored Advisor

Re: 2014 cash flow

You know, this is the non sequitur for me...here we read on one hand that the land price war is still on all over the map, then on the other hand that bankers are getting antsy for operating loans next year. Does this make any sense to anyone but me?

Even worse, the very to extremely worried bankers are expressing their concerns before the farm economy has gone down the drain...is it circling it or not? Is all of that paint paid for, or is it on the installment plan as well?

At what point is everyone else going to feel sorry for businesses that have had the last five years that grain and bean farmers have enjoyed? I think the publicity over $20,000 per acre land has harmed farming and farmers everywhere...
0 Kudos
Honored Advisor

Re: 2014 cash flow

I don`t think there`s many that are hoping for a crop failure, it`s just to be pragmatic about it, a person can go broke with low prices every bit as they can with low yields.  If we produce 2 billion bushels more corn than we use each year, prices will be cheap and farmers will hurt.

 

 

There`s a "sweet spot" somewhere in production where we`d produce say 500 million bushels more than we use, so that endusers don`t run out and the high price we get is sustainable and we maximize the gross revenue for each acre...That`s what I root for  Smiley Happy

Contributor

Re: 2014 cash flow

What's odd about our industry and like very few others is that our corn crop in a year when we produce 10.8 billion bushels is worth 75 billion dollars aggrgate or so and in a year when we produce 14 billion bushels it is only worth about 56 billion dollars.

0 Kudos
Senior Advisor

Re: 2014 cash flow

I've never heard anyone on here mention they would prefer a smaller crop with more favorable prices, where did you hear your info?
0 Kudos
Honored Advisor

Re: 2014 cash flow

That is a very good point. It kind of comes down to would you rather haul 200 bushel wagon of corn off an acre and sell it for $4/bushel?  Orrrr would you rather haul 100 bushel "Monkey Wards" flair box off an acre but sell it for $8/bushel?

 

 

Frankly since I would be grossing the same amount, I`d rather haul in 100 bu/acre of $8 corn...less fertility leaving the farm.

0 Kudos
Senior Advisor

Re: 2014 cash flow

That's all fine and dandy until you have a disaster year and you've got a 100B APH. I'll take the higher yield every time and keep trying to improve my average. We cannot control the markets, so why sweat it or whine about it. If I don't continually attempt to improve my yields and better my averages, then why am I even farming.

I harvested some 150 BPA dryland milo this year and that has been my best EVER. Above my yield goal substantially. Am I satisfied? Nope, my next hurdle is 160.
0 Kudos
Senior Advisor

Re: 2014 cash flow

The high land prices hasn't hurt anyone yet. The fellow that bought it is probably in good shape at what ever price he puts on the financial statement. It's a simple fact that we have been in hog heaven for a few years and we might have to settle for less for a while.

 

How about you hog producers? Are yu going to be in hog heaven for a while or won't you benefit from $4 corn?

0 Kudos
Honored Advisor

Re: 2014 cash flow

I make the same pay as a contract grower, regardless of feed prices. I would imagine the pigs' owners will be happy...call them in Beijing snd find out.
0 Kudos
Honored Advisor

Re: 2014 cash flow

I agree Shaggy, as individual farmers the best that we can do is raise the best crop we can at the most reasonable cost to us.  When there`s 1 million of us all doing that, this is why we are "price takers".  If in the future there are say 10 farmers controlling food production, then they will be "price setters". 

0 Kudos