Home Forums Hunting & Shooting Hunter's Campfire Are small Iowa farmers having that tough of a time??

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

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

That’s it! Thank you!

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.

You're welcome.

Cheers!

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.

I worked for a retail coop for 25 years now I work for Syngenta selling corn and soybean herbicides and fungicides

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.

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.

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.

Banker needs his too you know.

That's cool.

I didn't realize there was an Arkansas Delta.

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.

Back in 1966 I read an article in a farm magazine. Short story, Farm, farming 6000 acres made $6000

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.

The bank has more money for them if they run short.

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.

Sounds kinda like you care a little bit.

It is the entre Midwest