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Hobbyfarmer
Honored Advisor

The good 'ol days are back

 

It has been quite cushy out here in farm country since 2004.

 

11 years of nothing but profits for the main grain production area.

 

The last two are returning things to more historical averages.

 

I started n 72, not a lot of wild profits for a small farm start up.

 

Money was easy to get, rent was in the eight% range. Expansion was the flavor of the decade.

 

Then the eighties reared up and got many of us by the short and currlies. Rent on money was plus or minus 20%. Many on here have no clue what it takes to work through that.

 

Then the nineties showed up with weather problems, grain carry over up to a third of production and prices for years on end of no real profit.

 

Took until 2003 to see a light at the end of that long tunnel.

 

Farming has really never seen a prosperous continuous run such as this last decade and a half.

 

Did you really think it would last forever?    

 

The ones that will survive will have to learn how to do it on less expense.

 

Just not room for business as usual, gonna be a painful lesson for some,suppliers too.

 

You owe them nothing, they must provide value above their costs of goods and services.

 

No business survives just trading dollars even steven.

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3 Replies
BA Deere
Honored Advisor

Re: The good 'ol days are back

To be honest, I thought through inflation and world demand that $4 gas and at least $5 corn were the new plateau, I was of course wrong.  The big problem is input prices no where near reflect how low they need to be. In the case of seed, I don`t know if they can get cheap enough, alot of bricks and concrete was poured and they have been accustomed to $250-$350 seedcorn.  I`m afraid many companies will go broke and swallowed up by stronger companies.  5 yrs ago, if a company didn`t invest highly in R&D, $7 corn farmers didn`t want their seed, now $3.50 corn doesn`t support those seed prices...who knows, maybe in the end the Epley Brothers will win all the marbles  🙂

 

https://www.yelp.com/biz/epley-bros-hybrids-inc-shell-rock

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rsbs
Esteemed Advisor

Re: The good 'ol days are back

Boom and Bust are normal business cycles and the bust cycles are when the smart operators make their money.

 

As Warren Buffet says, you can't tell who is swimming nekked until the tide goes out.

 

If the trajectory was straight up, only the most aggressive tigers would have anything after short order. The bust cycles bring reality back into the mix.

 

I bought a $80,000 planter for $28,000....a $30,000 digger for $8,000....still waiting on a couple of other deals....Opportunities are out there.

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hobbyfarm2145365
Senior Contributor

Re: The good 'ol days are back

what part of this doesn't pass the smell test, 80k planter selling for 28k????

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