cancel
Showing results for 
Search instead for 
Did you mean: 
farawayguy
Veteran Contributor

Re: The storage option is not cheap.

Okay, sounds like no storage facility is for the better in my case. Works for me! I was also thinking maybe the local elevator can't always take in the grain during harvest time, for capacity reasons. Does that ever hinder the operation?

0 Kudos
farawayguy
Veteran Contributor

Re: Should I Custom Farm?/Yes

Wow, as someone said, you are the person to talk to! I left out the fact that there is quite a bit more family acreage that I manage, probably just a bit less than you have, but I'm not remotely willing to jump in at that level right now. And I'm getting more like $260/acre rent now for most of it. And it took some doing for me to get it up to even that, from when I took over a few years ago.

 

My thoughts on getting the right farmer was to find someone who is below farming capacity for whatever reason - maybe they lost some land, or maybe it's a son trying to get established. Seems like that would lesson the risk of being last in line. Of course, I have no idea how to find that person just yet.

0 Kudos
gbryce
Frequent Contributor

Re: Should I Custom Farm?



4. Point against this - I don't have a storage option right now, other than the local elevator. Is that doable?

 


 I would like to hear some other opinions, but I think I would make abt $.30 / bu. average on basis improvement  by hauling from bin and choosing my location and timing versus hauling to local elevator in harvest and putting on DP or NPE

0 Kudos
rswfarms
Senior Contributor

Re: Should I Custom Farm?/Yes

Believe me, I made many mistakes and still do (Mostly on timing my corn and soybeans sales). However, after you get up to speed on Custom Farming it is not as hard as you think. If you have the right tools. I would invest in a good farming software package as a 1st step. I ended up writing my own software just because that is something I enjoy doing. But there are many good software packages out there and the cost isn't that much these days. I believe some of the software companies will even let you test out there software for free, before you buy it. Testing it out before you buy it would allow you to run a Test Crop Year though your computer to help build up your confidence level to do the real thing. Make sure you get a software package that allows you to run "What-If" scenios, such as getting 200 bushels/acre for yield and a selling price of $5 a bushel, then the software can take that revenue and cross that with your Purchasing Computer Module and predict your cash flow needs for your seed, fertilizer, and all your other inputs, it will even give you a time period you need the cash to buy all your inputs based on the leadtimes from your Purchasing Computer Software. As for hiring Custom Operators, in Northern Iowa there would be no shortage of guys that would love to get paid $150/acre for the work. In my area, just about every full-time farmer is over-equiped, meaning he has excess machine capacity than what he needs to farm his current acreage. Iowa's problem is not a shortage of equipment or labor, the real shortage is good quality farmland to farm. I don't know if that is the case in your area, but in Iowa the huge shortage is farmland, not labor hours or equipment. I interviewed maybe 10-12 guys to do the Custom work for me and hired who I thought would be the best. It must have worked since I have had them for 20+ years now. I would do what I did when I 1st started Custom Farming, maybe just do it for 320 or 480 acres the 1st year, that we if you make mistakes or have problems it isn't going to be as expensive as if you were doing 2,000 acres. But to sum up, I believe your 1st step should be to invest in a good software package and practice running a Test Crop Year, and at the same time you can maybe start inviewing guys to do the Custom work too. After 3 crop seasons behind you in Custom Farming you will have learned enough to Custom Farm all your farmland.

0 Kudos
farawayguy
Veteran Contributor

Re: Should I Custom Farm?/Yes

REALLY helpful! Just as a practical matter, can I ask how you went about putting the word out well enough that you got all those custom farm hiring candidates? Is there some local farmer community resource that would reach most of them, short of knocking on doors or running newspaper ads? 

 

My models are built with Excel spreadsheets. Seems really simple for now - don't know if I'm missing something but I just set it up so the revenue and costs per acre flush out. I've been using $120 per acre for custom work, just based on online sources, but I'm getting the idea from you that may be too low. Would the fact that the two parcels are so large (330 and 220 acres) and reasonably close together (5 mi) allow for better pricing for me?

0 Kudos
hardnox604008
Advisor

Re: The storage option is not cheap.

Yes, of course that is a consideration although I'm really not aware of anywhere in the heart of the cornbelt where you don't have harvest options to take grain to.

0 Kudos
tree fmr
Advisor

Re: Should I Custom Farm?

Keep the rent low, move to IL, and farm it yourself!
0 Kudos
buckfarmer
Senior Contributor

Re: Should I Custom Farm?

Just a few observations from this conversation so far. First off, caution what RSW tells, his numbers seem right but he leaves out a lot of details. Some people on here think he is a fraud. I'm not judging. I try to learn everything I can from him. Your 120 per acre may be ok according to how you want it farmed. His 150 may still be low. I really baby my crops and 150 is low for me. I do deep tillage, make five passes to apply fertilizer, spray fungicides and insecticides when needed, mow the perimeters of the fields at least twice a year and cut brush and tree lines around most farms. But if you notil,l pre emerge all fertilizer and chemicals,and only yield 160 maybe your 120 is a good number. Just think about the extra cost to your custom farmer of running 250 bushels per acre through the combine insted of 150. Trucking included? You could pay for chemical and fertilizer application seperatly. As far as finding candidates, I'd put a add in the local newspaper. Don't forget people will travel maybe up to 100 miles to farm that much ground. So don't just advertise I'm one paper. I'd put the add in the real estate section or maybe farm machinery for sale. Farmers are Probably not looking in help wanted adds. If I saw an add for something like what your looking for in my area i would be interested.
0 Kudos
tractor12
Frequent Contributor

Re: Should I Custom Farm?

To farawayguy    , I  farm and live in west central Illinois and wonder your farm is located. If it is close i would be interested in talking to you about it.  If not close i may be able to steer you to get what you need depending on what path you choose , cash rent or crop share or evan custom farming. good luck    tractor12

0 Kudos
rswfarms
Senior Contributor

Re: Should I Custom Farm?/Yes

Yes, on getting the word out to all the local farmers in my area, it was a piece of cake. We have 3 local Elevators around my Iowa farmland. All I did was post a small handmade add on each elevators board where guys post farm equipment for sale and other things. You know farmers, some gather at the elevators for coffee and talk. So these guys who 1st read my add that I was looking for Custom Operators, in turn just spread the word to all the other local farmers. And as I mentioned, almost every Iowa farmer has more equipment than he needs and also has excess manhours of labor to enable them to take on additional farmland. Just doing this generated enough interest with the local farmers to get a number of very well qualified individuals. Some of these guys came to me with a list of all there equipment, along with answers to my questions of making sure they had excess labor manhours to do the work of farming my land. From there, I just picked who I thought seemed to fit in to my management style and had the tools to get the job done. I got lucky and have had the same guys for over 20 years now. Having a well-qualified Custom Operator is worth his weight in gold. I pay them 50% in the spring and 50% after harvest for a total of $150/acre. This is slightly higher than the going rate in Iowa, but as mentioned having a smart, hard-working, Custom Operator makes my job as managing the Farm Operation a helluva alot easier. Don't try and get by with a really cheap Custom Rate of $100/acre or so, pay them a fair salary, it is the best money you will ever spend, again, pay them slightly above the pay range in your area for Custom Farming. As for EXCEL software, yes you can write all your spreadsheets yourself to moniter your farm operation, but I would look around at some of the new farming software out that is one step above what EXCEL can do for you. I think you mentioned you had over 2,000 acres of land to Custom Farm. With this amount of dirt, a good pre=packaged software will really help you in the long-term over what EXCEL can do. I enjoy computers and software, so that I don't mind spending a little money on these farm tools. Let me know what other questions you may have. But to sum up, long-term, Custom Farming will give you the highest Return on Investment Ratio possible, and that should be your A# 1 Goal, to max your ROI Ratio.

0 Kudos