1000 acres for $16,000,000 and produces $800,000 worth of corn sounds pretty good. 5% return to pay the interest.
Please expand your logic and where you find those figures
Iowa land according to hlg posting above goes for $16,000 an acre. Year in and year out about a 200 bushel average is to be expected. 200 bushels at $4 is $800 which is about average more or less a little. $800 on 1000 acres will gross $800,000. If you paid $16,000 per acre just add 3 zeros to that to get your price on 1000 acres. 16,000 x .05 = 800
Your off on your calculator Average yield on the $16000 land is well north of 240 by if your any type of good farmer The guy I help 5 yr average is 235 $4 corn,,, you will go broke Cash corn right now for fall delivery is $4.50 had opportunities last dec/jan to sell fall corn for close to $5 Your also forgetting that these progressive farmers ( which anyone can do ) buy puts/calls to make money as well The best farmers I know( my job is also in ag) spend more time behind the computer screen than in a tractor
You can get 240 bushels to the acre if you spend a pile of money on fertilizer and new equipment to have 22" rows. But, without the fertilizer and the rain plan on 180 or 200 bushels.
The folks spending $16,00 or more per acre are not always farmers. They are new York speculators, lawyers and doctors looking to get a tax break. They also want $350 an acre rent on improved ground, per season. Improved ground means tile and erosion berms. No little farmer can do that.
kwg
For liberals and anarchists, power and control is opium, selling envy is the fastest and easiest way to get it. TRR. American conservative. Never trust a white liberal. Malcom X Current NRA member.
P.S Seed corn is over $100 per acre. Illinois set $4.68 per bushel as average cost to produce a bushel of corn in 2022.
My spreadsheet too big to attach but will email to anyone This is what I figured on a new piece of ground Fert $250 an acre Chemical/fungicide $102 an acre Seed $125 an acre Equipment $135 An acre Crop ins estimate is $40 an acre Rent $275 Gross revenue $1176 (would have sold it for October delivery at $4.90) Inputs and costs $944 Average per bushel cost $3.93 Left profit of $232 an acre So back to my 500 acre grower Gross revenue $588000 Costs owned ground 234150 Cost rented ground 151,480 Net income on 500 acres of corn = $202370 I know there a few other costs associated but you can catch the drift I can get zero percent interest on inputs from my retailer so cash rent and fuel is the only cost associated with operating loan of 7%
I was a crop agronomist salesman for 25 years before I took this role of a manufacture rep so still have a huge background in helping farmers attain profit
We might have to be neighbors, but I don’t have to be neighborly. John Chisum
The program just ended and it was called Greener Pastures. It took 4 years to film and appears to be about 4 years old. It was a film worth watching.
Is this the program?
GREENER PASTURES / Official Film Festival Trailer video posted to YouTube on Jun 12, 2023
"Official film festival trailer for the documentary feature film, Greener Pastures. Screening worldwide in film festivals through 2023-2024.
Greener Pastures is an urgent and intimate look at American farming, told through the stories of farmers living at the intersection of climate change, globalization & a mental health crisis."
I watched a few local family farms do well. The ones that were most successful, just like any other business operated on a cash basis.
They did not have a banker with his fist in the John Deere dealers pocket, telling them they would not get an operating loan unless they also bought a tractor twice as big as they needed with all the comforts of the Taj Mahal.
But most fiscally wise young farmers live like paupers for the first twenty years while paying off the land, and livestock, if it is that type of operation. And today, most of those young people coming from parents wise enough to operate a successful family farm have a college degree.
As they watch their College class mates go into careers which will be paying 10 times what they will see from the farm, it is very tempting to abandon the farm life for a bigger payday.
One has to love the life, because it just does not pencil out any other way.
The one thing going for it, when you are ready to retire, you are sitting on a fortune in real estate, livestock, and equipment. That is, if you are wise enough to have kept it out of the bank's name.
People who choose to brew up their own storms bitch loudest about the rain.
P.S Seed corn is over $100 per acre. Illinois set $4.68 per bushel as average cost to produce a bushel of corn in 2022.
My spreadsheet too big to attach but will email to anyone This is what I figured on a new piece of ground Fert $250 an acre Chemical/fungicide $102 an acre Seed $125 an acre Equipment $135 An acre Crop ins estimate is $40 an acre Rent $275 Gross revenue $1176 (would have sold it for October delivery at $4.90) Inputs and costs $944 Average per bushel cost $3.93 Left profit of $232 an acre So back to my 500 acre grower Gross revenue $588000 Costs owned ground 234150 Cost rented ground 151,480 Net income on 500 acres of corn = $202370 I know there a few other costs associated but you can catch the drift I can get zero percent interest on inputs from my retailer so cash rent and fuel is the only cost associated with operating loan of 7%
I was a crop agronomist salesman for 25 years before I took this role of a manufacture rep so still have a huge background in helping farmers attain profit
Originally Posted by IA_fog
Originally Posted by Hastings
P.S Seed corn is over $100 per acre. Illinois set $4.68 per bushel as average cost to produce a bushel of corn in 2022.
My spreadsheet too big to attach but will email to anyone This is what I figured on a new piece of ground Fert $250 an acre Chemical/fungicide $102 an acre Seed $125 an acre Equipment $135 An acre Crop ins estimate is $40 an acre Rent $275 Gross revenue $1176 (would have sold it for October delivery at $4.90) Inputs and costs $944 Average per bushel cost $3.93 Left profit of $232 an acre So back to my 500 acre grower Gross revenue $588000 Costs owned ground 234150 Cost rented ground 151,480 Net income on 500 acres of corn = $202370 I know there a few other costs associated but you can catch the drift I can get zero percent interest on inputs from my retailer so cash rent and fuel is the only cost associated with operating loan of 7%
I was a crop agronomist salesman for 25 years before I took this role of a manufacture rep so still have a huge background in helping farmers attain profit
I'm sure you are correct if everything falls into place. But $4 corn and 200 bushels happens. And my limited experience tells me there is never zero interest.
Just curious, what do you or your company sell.
Patriotism (and religion) is the last refuge of a scoundrel.
P.S Seed corn is over $100 per acre. Illinois set $4.68 per bushel as average cost to produce a bushel of corn in 2022.
My spreadsheet too big to attach but will email to anyone This is what I figured on a new piece of ground Fert $250 an acre Chemical/fungicide $102 an acre Seed $125 an acre Equipment $135 An acre Crop ins estimate is $40 an acre Rent $275 Gross revenue $1176 (would have sold it for October delivery at $4.90) Inputs and costs $944 Average per bushel cost $3.93 Left profit of $232 an acre So back to my 500 acre grower Gross revenue $588000 Costs owned ground 234150 Cost rented ground 151,480 Net income on 500 acres of corn = $202370 I know there a few other costs associated but you can catch the drift I can get zero percent interest on inputs from my retailer so cash rent and fuel is the only cost associated with operating loan of 7%
I was a crop agronomist salesman for 25 years before I took this role of a manufacture rep so still have a huge background in helping farmers attain profit
Originally Posted by IA_fog
Originally Posted by Hastings
P.S Seed corn is over $100 per acre. Illinois set $4.68 per bushel as average cost to produce a bushel of corn in 2022.
My spreadsheet too big to attach but will email to anyone This is what I figured on a new piece of ground Fert $250 an acre Chemical/fungicide $102 an acre Seed $125 an acre Equipment $135 An acre Crop ins estimate is $40 an acre Rent $275 Gross revenue $1176 (would have sold it for October delivery at $4.90) Inputs and costs $944 Average per bushel cost $3.93 Left profit of $232 an acre So back to my 500 acre grower Gross revenue $588000 Costs owned ground 234150 Cost rented ground 151,480 Net income on 500 acres of corn = $202370 I know there a few other costs associated but you can catch the drift I can get zero percent interest on inputs from my retailer so cash rent and fuel is the only cost associated with operating loan of 7%
I was a crop agronomist salesman for 25 years before I took this role of a manufacture rep so still have a huge background in helping farmers attain profit
I'm sure you are correct if everything falls into place. But $4 corn and 200 bushels happens. And my limited experience tells me there is never zero interest.
Just curious, what do you or your company sell.
And that is why you carry crop Insuance and forward sell/buy puts calls. Last year was no brainer you made money with crop insurance This year with spring price will be tough But that is why you focus on your game and production history Forward selling then protecting with puts/calls I mainly do HTA contracts which is setting price today and picking your basis(grain freight) later but before you deliver. Say I sell October. Corn for $5 my basis could be anywhere from -.30 to + .10 I would be disappointed is all I grew was 200 bu corn, I’m fertilizing for 300 and doing some other nutritionals etc to try and push on some acres. My local county average is 194 and we have some pretty crappy ground in places and flat black in others( I’m in the flat black zone) almost too flat stays wet. Zero interest everyday here with one coop . It’s an inhouse financing and if you buy everything from them they offer zero due December of the year.
We might have to be neighbors, but I don’t have to be neighborly. John Chisum
Input salesmen don't come to your farm to make you money.
Ya reckon? Zero interest always means it's charged on the front end. Or maybe there's a trap built in where if you stumble it hits you like a ton of bricks.
The only credit card I use is for fuel, an Exxon card because I get 10 to 20 cents a gallon off. They just sent me 3 or 4 pages of legal size paper with small print outlining the new terms. I am good to go if I pay on time in full like I have done, but Boy Howdy the costs if you slip up or take a cash advance. In addition to any penalties the interest is 34% going back to day one.
One of my good friends is in the air conditioning business. It is interest free for one year if he installs your HVAC. I hemmed him up on it and he admitted it (interest) was on the front end. And if you don't pay in one year you have problems.
Patriotism (and religion) is the last refuge of a scoundrel.
My wifes 3 uncles farmed a bunch of ground together and rented all of it North Arkansas delta. They worked hard at it. They understood the business aspects of when to book and how much. They were smart about buying their inputs for the year. They were all millionaire sharecroppers.
Input salesmen don't come to your farm to make you money.
Ya reckon? Zero interest always means it's charged on the front end. Or maybe there's a trap built in where if you stumble it hits you like a ton of bricks.
The only credit card I use is for fuel, an Exxon card because I get 10 to 20 cents a gallon off. They just sent me 3 or 4 pages of legal size paper with small print outlining the new terms. I am good to go if I pay on time in full like I have done, but Boy Howdy the costs if you slip up or take a cash advance. In addition to any penalties the interest is 34% going back to day one.
One of my good friends is in the air conditioning business. It is interest free for one year if he installs your HVAC. I hemmed him up on it and he admitted it (interest) was on the front end. And if you don't pay in one year you have problems.
It's a perverse race to see who can squeeze the producer the hardest.
And to top it off....the tax payers get to make up the difference if there is no money left over.
My wifes 3 uncles farmed a bunch of ground together and rented all of it North Arkansas delta. They worked hard at it. They understood the business aspects of when to book and how much. They were smart about buying their inputs for the year. They were all millionaire sharecroppers.
Learned a lot. Thanks guys. Tell you this tho - tree farming sucks. Plant and wait 8-12 YEARS for the crop with a lot of the same disease/weather concerns commodity farmers have in between.
In my area, northeast Missouri, the family owned farms here are usually running about 3000 acres. Some of that is rented ground. I have no way of knowing their finances or care to but they all are driving the newest and best pickups and farm equipment, live in the nicer homes around here and take plenty of vacations every year. If they're hard up it isn't showing by the way they live.
Learned a lot. Thanks guys. Tell you this tho - tree farming sucks. Plant and wait 8-12 YEARS for the crop with a lot of the same disease/weather concerns commodity farmers have in between.
During the CRP heyday trees were better.
Put your land in CRP...plant timber....receive money every year for crp contract and then sell timber when contract expires.
In my area, northeast Missouri, the family owned farms here are usually running about 3000 acres. Some of that is rented ground. I have no way of knowing their finances or care to but they all are driving the newest and best pickups and farm equipment, live in the nicer homes around here and take plenty of vacations every year. If they're hard up it isn't showing by the way they live.