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Shaggy98
Senior Advisor

Re: Should I Custom Farm?

This message board is already good, but it would be better if ole Fairy Tale would stop contaminating it with his false BS.  Scratch that, it would be best if he would just quit commenting.

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farmerguy89
Advisor

Re: Should I Custom Farm?

Faraway can't be rsw.. He knows what a paragraph is and strives to not repeat himself in the rsw vein
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Shaggy98
Senior Advisor

Re: Should I Custom Farm?

Good one 89, guess I overlooked the obvious.  He also knows how to use a spell check button.

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minnisota
Veteran Contributor

Re: Should I Custom Farm?

Farawyguy

 

Dont know about several people on this site.  , but what I have found is some very insightful people then you have a few of them that have a problem with RSW not sure why doesn't really matter just wish they had better answers than RSW they just keep needling him. The only thing I would ask if RSW is not giving us the straight scoop. Give us better answers . Now that would be great. Rather than telling us how wrong he is.. I find it strange, Just tell us how he's wrong then prove it.    

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Shaggy98
Senior Advisor

Re: Should I Custom Farm?

His past comments speak for themselves.  Take some time and read what he has posted since day one.  NOTHING, ABSOLUTELY NOTHING pertaining to production agriculture.  He only copies and pastes articles from outside sources and keeps preaching how he bought his farm for a penny on the dollar and that he owns 2/3 of Northern Iowa including E-plants and hog confinements.  What he expects us to believe is a disgrace and a disservice to what we farmers know of agriculture today.  I'm not saying he can't be a decent business man, but agbusiness, no way.  Anyone involved with agriculture at all can read through his chit and say this guy is a complete moron if he expects me to buy any of this chit he is selling.  Why do you think agweb banned him?  My guess is that they were tired of his chit and finally got on to him about being a fraud and ruining the discussion board just as he is _ucking up this one with every single comment he posts.  Luckily I'm in a good mood or I would have really unloaded on him.  Smiley Wink

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johnbkent
Visitor

Re: Should I Custom Farm?

I too manage farmland and investments..  Sounds like I may be closer to our farm in Central IL, about  5 hours away.  Our farming is 50/50 - no cash rent.  My grandparents farmed and did 50/50 for land they owned farther away from the primary operation.  Cash renting is the easiest in terms of paperwork and headache.  Need to review the soil tests each year or at least every two - make sure the soil is kept up.  I have considered custom farming as well.  Much more integrated - you are going to be responsible for selecting seed, fertilizer, and chemicals.  If your knowledge is outdated, you will be at the mercy of the supplier..   You could add a farm manager, but now you just added a sizeable cost.  Unless your 500A is just one really flat and pretty farm without much of the ditches and other impediments many deal with, there will always be something to address.  You also have all of the cash flow with custom farming - 500A of corn at $450 input cost per acre is 225k plus the 75k for custom operations (not to mention crop insurance, you can go cheap or expensive there).  This is 300k+ you will have out the door until harvest.  You could minimize the cost by doing half beans / half corn - I would advise this anyway to reduce the cash flow and give you two crops to sell come fall.  This could be a lot of stuff you already know- I am glad to continue or discuss if you are interested. 

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farawayguy
Veteran Contributor

Re: Should I Custom Farm?

Thanks for your input! Yes, I am aware of most of these issues. I do plan on a 50/50 corn and bean mix, which is what the current tenant has been doing. I've been cash renting for two years and will be continuing to do that on the other 1000 acres that my family has. To say my knowledge is outdated is an understatement. I'd say the whole endeavor rests on my ability to quickly educate myself. I do have a degree in agricultural economics, though I've not mentioned it, lest it lead folks to a false impression of what I currently know. I don't know which areas will be the hardest to learn, but I would expect the operating farmer to help quite a bit with many of the decisions. I do know other farmers too, but I don't want to lean on any one person too much. One option I suppose would be to ask a current tenant for some consulting in return for favorable rent for a number of years. But of course, no one wants to train their own replacement.

 

I'm leaning now toward an 80/20 crop share, where I pay the expenses and get 80% of the crop – fairly similar to custom farming, but giving the operator some stake in the outcome. That also will save me a bit of upfront capital – and with my own funds, I'm estimating I'll only need a line of credit for about $100,000.

 

I have looked at 50/50 crop share, but that doesn't look particularly good for the landowner from my perspective. I guess it comes back to getting paid for risk, and a 50/50 share wouldn't put enough of it on me. By the way, as commodities prices fall while I sort through this, I'm closer to thinking I'll not see any income increase this coming year from this, but the only way I can get experience is to jump in, so I'm still inclined to try it.

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sw363535
Honored Advisor

Re: Should I Custom Farm?

In our area you will be money ahead if you take the 20% and no bills and leave the headache to someone else.

 

If you are mentally 5 years out of farming it will take 5 years to catch up.  Your cash flow needs are underestimated.  Overhead costs are seldom discussed but have inflated steadily the last several years.

Many farmers only figure the out of pocket cash flow to judge their income.  Many think they will be out of business before they have to replace equipment -------------- a self fulfilling prophecy.

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farawayguy
Veteran Contributor

Re: Should I Custom Farm?

Okay, you can't be serious about the 20%? A friend of mine has been doing it the reverse way for years but gets 38% of the crops with no expenses. Cash flow needs are not hard to figure out - maybe you misread my post. I'm saying I may need a $100,000 line of credit. I have about $200,000 of my own funds sitting in the bank already.
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kraft-t
Senior Advisor

Re: Should I Custom Farm?

Intelligent post!

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