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Veteran Advisor

Re: Big wheels roll'n

''  Used  to ''  have  work  projects  on  R  R  tracks , supporting  the  transport  of  items  from  Everett  Wash -  Boeing ,   to  S. Wichita  ,  high  priority , quick  response  agenda  -  -  -       

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Veteran Advisor

Re: Big wheels roll'n

Here are the results local extension put out,
A result of their own surveys

Smith co
Cropland dry. 63
Irrigated. 104
Pasture 21

Mitchell co
Dry. 63
Irritated 117
Pasture 25

Jewell Co
Dry. 72
Pasture 26

Lincoln county
Dry. 66
Pasture 23.25

Osborne co
Dry. 46
Pasture 17.75

Haven't seen what nass or farm management
Said. Local generated survey and results

 

(Opps...I failed to say rental rates in $$$)

 

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Honored Advisor

Re: Big wheels roll'n

Rents?
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Veteran Advisor

Re: Big wheels roll'n

Lease rates
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Senior Advisor

Re: Big wheels roll'n

Well, a couple of thoughts"

 

1. Cash rent, since the US was colonized, for the tenant to be profitable, can not

be more than $1.00 per bushel. Some would say $1.10, depends on how you

define "profitable", but if you ever get far from that number you are going down, just

ask Stamp Farms in Michigan :-)

    For you, Land Rent is $63 avg/60 bu corn yields - thus $1.05 - perfectly sustainable.

Point being you are far better off than most of IA/MN/IL/IN where the average rents are

over $1.20/bushel for many.

 

2. Land value, $800. This is 800/63rent = 12.7x the rent. This is extremely cheap by

mdoern farming standards. The average value/rent in Indiana is around 33 for example.

$9000/$275= 32.7 for example. So, your land is vastly cheaper than your competitors.

   Point being that your land is not too expensive, nor is your rent.

 

3. Inputs, the inputs to grow 60 bushel corn are vastly less than those required to

grow 200 bu corn year after year. So, I'll assume you have less than $125 per acre

in inputs. It certainly should be possible to do it for that or less.

 

So, your rough cost is:

   Rent -    $1.05/bu

   Inputs -  $2.00/bu

   Total direct cost of $3.05, you can sell for $3.50 right now. 

 

No, you don't get to own new equipment, but the 9770's we run cost us very little

per bushel last year (since their resale value actually increased) much like the 8320

we plant corn with actually increased in value.

 

Ultimately, to prosper in ag, you have to breakeven in times like these. It seems

like you could breakeven with your cost structure, and as I thougth, your costs

are much more competitive than most of the BTO's in North Eastern Iowa. 

 

Beans would be even better as your yields are much better than corn on a

relative basis, plus you have less bushels to haul 200 miles to a user. :-)

 

Anyway, free markets are funny in that they normally work. Your land values

and cost make you very competitive producers of cheap commodities.

 

That said, if you can get $65 for CRP, it is clearly the best alternative, especially

since you could start growing CRP crops to rebuild the soil. fwiw.

Thanks for sharing the numbers.

 

Oh, yes there is nothing in the above thoughts for labor. Honestly, it really

doesn't take much labor to grow 65 bu corn. Lots of time to drive trucks,

be a fireman, or teacher maybe since KA loves liberal teachers according to

you guys. Rebuild irrigators? Probably not bury tile like some out east do.

But, there most be something to do in the off season that can cover most

of the living costs. Ag never has paid much for farm labor, never will is my

guess.

Veteran Advisor

Re: Big wheels roll'n

Time, thank you for your insight.

Your correct....I don't know how I would pay
The living expenses if I stopped dancing 😮
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