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Doug N
Veteran Contributor

MT C.O.P

MT, you have mentioned a couple times now that one needs to get cost of production of corn down to $200 and $100 for beans. I take that is costs other than land? I would guess most farmers have something like twice that into each of those crops currently. Corn seed and fertilizer more than eat up $200, and those 2 are somewhat out of our hands as the average farmer can not produce their own.
So if I ad an average land cost of $150 and an average yield of 150 BPA then you are expecting prices around $2.25 cash?

Please elaborate more when you get the time.
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17 Replies
BA Deere
Honored Advisor

Re: MT C.O.P

Seed corn is well over $300 per unit, that`s $140/acre, potash $450, MAP $550, N 50¢ per unit.  Costs just haven`t come down enough.  Ethanol spokesman Monty Shaw is warning of a looming farm crisis  http://www.radioiowa.com/2013/11/15/epa-proposal-on-ethanol-use-draws-criticism-from-many-in-iowa/    `corn could get below farmer`s marginal costs with no safety net`. 

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farmerguy89
Advisor

Re: MT C.O.P

Yes beware. Mt talks out of his ass. Too defensive/superbull. Even in the face of record stocks he denies they exist
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buckfarmer
Senior Contributor

Re: MT C.O.P

Maybe he plants bin run seed to get to those numbers.
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farmerguy89
Advisor

Re: MT C.O.P

Would have to get all his fertilizer from biosolids/ bin run seed/ live beside the elevator/ no insurance/ etc

You can run some low soybean costs, but I can only go 250-350 all expenses next year(including land).
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wco
Contributor

Re: MT C.O.P

 

If you run a sustainable program with non gmo seed corn, i can get cop down to $210/acre for inputs( @ current input prices). Crop ins, equipment, fuel, labor,and bins and buildings @ $190/ acre. Rent @$ 250/acre, one needs 162.5 bu/ ac to break even @ $4.00/bu corn.possible????

Its going to get wild next 15 months.

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farmerguy89
Advisor

Re: MT C.O.P

Cant afford to grow corn. Ip Soys are now 3.50/bu premium. Rr Soys almost 4-1 ratio here to corn. My area rent is low, but I could certainly strike some neighbors who are trying to come at my leSes w some high rent on their leased lands.

Kill or b killed I guess
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425Cat
Advisor

Re: MT C.O.P

Greed: farmers biggest enemy
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Hobbyfarmer
Honored Advisor

Re: MT C.O.P

NOT all corn will be grown with those costs in the back ground...

 

Land paid for does NOT have any cost except for property taxes and liability insurance.

 

NOT all seed is $300 a bag.

 

NOT all of us have to spend $100+ on P K etc per year.

 

NOT all of us have to put on $100+ worth of N.

 

For example this year ('13)

 

seed was $185 bag ...26500 pop = $60 acre

 

total fert was 120 # N from Nh3 $700ish/ton = $53 acre

 

All spray ... 64 oz of glyphos one pass $13.25/gal = $7 acre

 

 

$120 an acre The  yield was 160 bu. dry corn in the bin.

 

That leaves me with $40 for fuel and repairs on my Equip and taxes etc

 

JUST to get up to $1/bu cost of Production. Still quite a bit of slippage and margin of error availiable in $4.00 corn. ($480 an acre margin to fiddle with) @$4.20 bu it is over $500 an acre.

 

This is the payoff for all those years of hardship/denial of the "new bobble" and scripping and saving AND gaining ownership of a land base.

 

 

 

 

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BA Deere
Honored Advisor

Re: MT C.O.P

I really think that on owned land one needs to assess the "going rate of rent" in your neighborhood to get a handle on true costs.  Because if you can get $250 rent and the only way to balance the books is to not figure rent, you are essentially just donating the use of your land to those that buy your corn.  The same with P and K and micros, even if your land is very high in fertility, maybe if the corn price is low you`ll have to "donate" it to the cause for a couple years but at least know where you are in the sacrifices that the land is asked to make. 

 

It`s in my DNA to swing for the bleachers every year on yield because I know the land can handle it and land is a large,fixed cost.  Dry years seem too be better around here, it can really git down and boogie, in wet years like `13...not so much. 

 

I helped a friend chop silage and he cut corners on seed, it went down something awful, he couldn`t pick it up and by right`s way, should`ve chopped it one direction. The expense there is to put in a acre of corn these days, that extra $50 $60 seed costs is piece of mind that is shouldn`t go down, but there are no guarantees.

 

I imagine if 2014 is a good year and we go into next fall with a 1.8 billion carryover, corn will probably go below $3...I hope I`m wrong, but rose colored glasses don`t pay the bills.  Then a person`s expectations on yield and standard of living will have to go down accordingly to survive.

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