cancel
Showing results for 
Search instead for 
Did you mean: 
timetippingpt
Honored Advisor

Re: Bucky. What's your COP?

Great point there Ehoff. Totally agree.

 

I am indeed dense and did not get Vince's play on the well worn 12.8 B corn crop from MT. Good one Vince.

 

MT, it is not surprising at all that you can beat us on costs, it is also not surprising that I can beat you on profits every year. Did I mention we include land principal payments in our COP? We can get pretty wealthy if we break even. :-)

 

Mizzou_Tiger
Senior Advisor

Re: Bucky. What's your COP?

Pretty presumptuous on your part that you have an edge in profits don't you think

How about land that's 1/3 of what you guys pay per acre that is pulling nearly the same yields with half your COP. FYI I don't do the cash rent game. Yeah I'm in rough shape. You win.

0 Kudos
timetippingpt
Honored Advisor

Re: Bucky. What's your COP?

We don't do the cash rent game either MT. Still about 40% cropshare, 40% owned, 20% other. Been that way for closing in on 3 generations now. One of our core business objectives is to keep it that way. Crop share landlords have done very well the last 10 years, far better than cash rent. A bit presumptious of you to think our land cost is 2x yours don't you think Smiley Wink

 

Also, include owners salary, benefits, and buy/sell life ins in that COP. So, as I said, COP becomes impossible to compare, and is a small part of the whole picture.

 

btw...I just let the slap about BTO slide off because it is just not accurate. More presumption on your part. I don't even know how to define a "BTO", apparently you do for you, but for me it is impossible.

 

So, I made presumptions, you did, we all do, and the COP discussion is pretty much irrelevant because everyone is different.

The data found in the recent magazines about big not being low cost is pretty accurate. It will not slow consolidation, but it is true that on a cost basis big is not better in all areas.

 

The goal for the next 4 years in grain ag should be to preserve the windfall. If you can come out of 2017 with the same net worth you entered 2014, it will be a victory. Very few will be able to do it. Doesn't mean anyone will have to sell out, just means that preserving the windfall is always extremely difficult. again, jme

 

Red Steele
Veteran Advisor

Great closing paragraph, Time

Echos what I have been thinking this fall.....I have been blessed with a windfall  over the past five years that not many ever encounter, and my goal is to preserve what I have right now. I have been talking with my input suppliers a little more than usual , trying to give them an opportunity to identify who can procure the best values in seed for me, while keeping yield potential high. Surprising what competition can accomplish. Ferilizer also seems poised for a pretty good decline, as the numbers as a % of crop potential just don't add up right now.

 

I do cash rent about 40% of my total acres, too, and am exploring converting some leases to a variable rent, based on crop revenue. Need something that is simple and fair, and the landlords do want a minimum guarantee which the farm program "safety net" should provide. None of the landlords I work with would be interested in having to ante up for seed, fert, chem, lime, etc. so I have to factor that in whatever arrangement comes to fruition. Still have neighbors offering high buck rent, so its a balancing act to keep the rented land.

 

This period reminds me a lot of 1980-1983...kind of the calm before the storm. I did not have any money then, but I  was able to stay out of debt trouble and actually went into the later 80's with money in the bank instead of debt. That was huge as the opportunies came to expand. Whats that saying...success is when preparation coincides with opportunity?

 

 

0 Kudos