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10-01-2018 07:26 PM
Okay here`s how:
1. seed $40/a ($100 a bag)
3. chem $30/a
4. fuel $20/a
5. land tax $30/a
Yield 200 bpa
200bpa/$200 = $1 per bushel
Oh I know, you have to own the land free and clear, be willing to "mine it", donate your labor, be your own banker charging 0% interest and you have to donate the use of your machinery...But you have it already and it`s good for it to use it, right?
Tomorrow`s class will be "How to raise $5 corn"
10-01-2018 09:55 PM
$115 MSRP with early pay discount of 13%= $100.05/ bag....they`d probably knock the nickel off if you asked
10-02-2018 07:57 AM
The equation should be $200/200 bpa, but the message is not lost on the mathematics.
You raise an interesting point, in that it is possible that the real costs of production are far lower than the $3-something that is commonly suggested. Especially for the large well-capitalized farms that benefit from economies to scale and own their land free and clear of mortgage. At the margins, its likely that their production is what caps the corn market price levels every time the market tries to make a substantial rally.
The more sophisticated farming concerns probably are also adept at hedging their production, which explains why there is a steady supply of corn in the futures market at any price. This is somewhat offset by the hedge fund participants who try to manipulate prices to their benefit several times every year. But in the end, it really comes down to economics rather than market manipulation. If even a small percentage of the corn market can produce a significant amount of supply at prices well below where the futures and cash market are trading, that marginal production has enough profit margin built in so that it can weigh down and exhaust most typical upward ebbs to a downward price trend.
10-02-2018 08:16 AM
that's pretty much my corn budget for owned land for 2019. Thanks for posting that about Eplys prices....I was feeling a little guilty for squeezing my own supplier until I saw that and now feel that I am getting market reality pricing.
My conventional corn actually looks better than the neighbors from all sides high tech corn...they probably paid $250-$300 a bag for all the bells and whistles, too.
10-02-2018 11:28 AM
I paid off my contract for deed in 2010, and most of my equipment is paid for (still 2 items to go). Here is my REAL 2019 budget:
1. seed $60/a ($200 a bag, 24,000 population)
2. fertilizer $120/a (including micros like Zn, Mn, B, Cu, S)
3. chem $30/a
4. fuel $12/a (5 gal/a - fill my tanks in Jan when I can get ag diesel for $2.00 - $2.20)
5. land tax $20/a (South Dakota....)
6. repair $20/a
7. misc $10/a (Utilities mostly)
8. interest $ 6/a
Yield - 175b/a
Marginal Cost of Production = $1.58/bu.
And one of the interest expenses is my truck for hauling to the ethanol plant 90 miles away. I can sell rallies 24 months into the future on their website if I want. Average price per bushel realized in 2018 (for 2017 crop in the bin) = $3.74.
I am a small-time farmer - 485 acres total, half owned and half share-rented. being small, I focus on soil health and productivity/fertility and marketing, and learn to fix '80's and '90's equipment. I did have a side job until 2012 to help pay off the land, but now I make an OK living on those acres and a little custom work.
10-02-2018 08:23 PM
Red, Epley wasn`t shabby at all in the First trials.
Kind of right in the middle of the pack it was 284 and top was G.H. at 297 and at the bottom my DeKalb at 275...not shabby either but Epley is probably 40% the cost of seed.
10-02-2018 11:18 PM
I could raise corn for a $1.58 if I wanted to leave out half my expenses, you can’t buy utilities and live for ten bucks an acre on 485 acres, you sure as hell didn’t pencil in insurace on buildings and machinery and vehicles as well as license for your semis, and you can repair all you want on your own but parts cost a lot, so your $9000 dollar repair budget is just as laughable when a set of semi tires is 4k, for the tractor alone and your getting Chinese ***** for that price! I wish I could live all year on 4850 bucks! This is post is why farmers get a bad wrap... it’s not even realistic...Your seed population Alone won’t raise what you claim...but hey your living that dream!,,, you could make way more selling your information then farming!