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Veteran Advisor

Re: Why oh Why?

Don, you wonder why more retired farmers don't go the custom route that you did. I think a loit of retired farmers, as well as currently operating farmers liked the production aspect of farming, but not so much the business side.  Many don't feel they do a real good job of marketing, and it certainly has gotten more complicated the last couple years.  Along with that the input side has become harder to manage too. I think that is why many landownerstake the [position that highyields mentioned, that being "I just don't want to mess with the farming anymore.  You have every right to go the custom route as you have done.  You seem to enjoy the businesss side of farming, and apparently do a good job with it.   With the greater involvement and risk you have, vs a cash renter, you should have a greater return.  Its the old "higher risk, higher return" axiom.  Thats just how I see it, FWIW

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Senior Contributor

Re: Question I couldn't answer :HIGHYIELDS

Completely argee with everything said. I would love to have a new combine like mine (2144) But everything is so dang big and expensive. I think this whole farm manager thing should go away as well. If you are not intelligent enough to take a check on Mrch 1st sell the ground, and move into assisited living.

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Senior Advisor

Re: Why oh Why?

I really don't enjoy he marketing or buying imputs. I would rather not do it a matter of choice. I do it to make money and retire debt. Ive paid for 90 acres of prime farm grounds since I had the machinery sale a few years back.

 

For certain part of that was merely a transfer of equity from machinery to realestate but I was able to manage income and expenses to make that possible.

 

Marketing has been rather easy in that you don't strive for the top dollar but take a windfall when it is offered. If I can expect nearly 200 bushels of corn per acre at $5 or above I can gross $1000 or more on an acre of corn. 55 bushels of soybeans@ $10per bushels or more I can gross $550 or $600 per acre. That leaves enough for crop expenses, return on investment and profit for operation.. However, you want to split it up.

 

Just do a spread sheet figuring crop inputs and expenses and target in yields and prices we have enjoyed lately and the returns can be pretty good.  Please consider a cash only operation self financed with land mostly paid for.  What we make is ours and uncle sams Yes we have the benefit of SS and medicare which is significant.

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Veteran Advisor

Re: Why oh Why?

Fwiw, I think a retired or semi retired farmer hiring work done is a smart way to do it all around. The custom guy knows exactly how much he will receive for doing a job, guaranteed pay, and without the risk of getting hailed out, etc. In return the owner is in control of how his land is cared for, the way he wants it to be cared for. I wish I could find a retiring farmer to go along with something like that with me, but they get more guaranteed rent income from the BTOs that come around every so often, and as their lease ends, mines the fertilizer out of the ground, skinks on weed control, ruts up the field, and moves on. I have older equipment, but am a good mechanic, and usually have less breakdowns than the BTOs, but some guys see an old combine, and falsely assume the guy with new paint will get done quicker.
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