OT Crazy Cash Rents

The rent and inputs will run around $800 per acre.If he has 160 bushels per acre forward contracted at $5.00 that will cover his expenses.If it makes 200 bushels per acre and corn stays at $5.00 he will have $200 per acre profit.At 225 bushels he will have $325 per acre profit.Crop insurance will cover his risk.He probably has his inputs all locked in on price.

If its a normal year 2008 will the greatest year grain farmers have ever seen.You are going to have to do a good job of marketing your grain.Far too many farmers in my area have nothing contracted for 08.A farmer that owns 200 bushel corn ground free and clear has the potential to clear $600 per acre profit.60 bushel bean ground has the potential to clear $500 per acre profit if you have them contracted at $13.00.

In my area 125 bushel corn ground and 30 bushel bean ground rents for $70 per acre which is a bargain compared to elsewhere.

Grain prices have risen faster than inputs but by 2009 this could all change.Things are so volatile.

Walt

Very hot summer forcasted in the mid west just like after the winter of 78/79.

Interesting to know total acres under crop by the renter?

Takes money to make money.

So if it yields 180 or more he could pocket $125 an acre as profit.

It doesn't give the location or the CSR of the land. It may be land that yields 200+ per acre.

I would give $400 an acre at $5.00 corn before I would give $150 an acre with $2.00 corn.

Gary

In your 2008 "budget" you left out the $50.00 plus per Acre it will cost to insure a crop in such a way as to try these $400 rents. $30/A drying is also possible--half that is more than likely.

I'll take $150 rent and $1.50 corn with our old farm program before I'll take $400 rent and $5 corn WITHOUT any gov't safety net.Remember you can't fwd sell more than your insurance guarantee, so with decent weather you still will have unpriced bushels at the mercy of the market

Of course I'll take todays market and todays AVERAGE rent over either above scenerio.

BIG numbers mean BIG risk--much more likely to loose everything if things go bad compared to a few years ago.

I know your statement was only trying to prove a point, but I think it may have been said a little hastily

Seed $60

Herb. $32

Nitrogen $55 (125 units)

P and K $60

Fuel $15

Instecticide $20

Machinery $100

Int. $8

Total $350. So you need 70 bushels at $5.00 to pay for inputs.

You may say my input costs are to low but if you prepaided every thing January 1 or last fall that is what the cost were here.

$400 for cash rent means I would need 80 bu for rent.

Total of 150 bu to break even.

Gary

Cash rent----- ----- $400.00-using the before mentioned price.
seed corn----- ----- $100.00 triple stack bt corn 240.00 a bag, for about 2.5 acres
fertilizer and NH3---$150.00 Nh3 about 700.00 ton at 200# per acre
insurance----- ----- --25.00
herbicide----- ----- --50.00
fuel----- ----- ----- -15.00
insecticide----- ----- 20.00
machinery----- ----- -100.00
int----- ----- ----- ---8.00

total----- ----- -----868.00

The fuel, insectide, machinery cost and interest I am using your figures, my dad does not farm any more so his input on machinery costs would not be close.and unless his memory is really bad, this is what he said it cost him on the other things I listed. He prepays for all before Jan 1st.
You also did not figure in the cost of labor to do this. And can you plow, plant, harvest, haul to elevator for 15.00 a acre worth of fuel?
I am not against you on this, I just do not see how you a make a living paying the prices you do and not get what your product is worth until this year. I am in central Illinois, so if that makes any differance.
Jim

If you put on 200 units per acre you will get 8 acres out of a ton.

8 into $700 is $88 per acre for nitrogen.

Gary

I bought 5500 gal. of diesel last year for 850 acres of row crop and 60 acres of hay.

Also customed farmed 160 acres so I figured 5 gallon an acre.I prepaid for $2.82 a gallon a month ago.

Been farming for 34 years now.

I have never gotton a refund on income taxes. There are a lot of years I didn't pay much.

If you have not made money the last 2 or 3 years and don't have a profit locked in this year, you are in the wrong business.

I am not bragging about making money. I'm just tired of hearing guys say they lose money every year. If you lose money every year how do you keep going, thats impossible.

Do farmers say you are losing money so the public will fell sorry for them? Does that justify the government programs if you say you lose money?

I guess I am and will always be a positive person.

Gary

18 bu freeze damaged wheat didnt make any money in 2007 but 140 bu corn and 30 bu beans sure did.One good rain and I could have had 40 bu beans.

If everyone was losing money like they claim they'd be doing something else by now.

There hasnt been a farm bankruptcy sale here in years.In the mid-late 1980's there was one every week.Good managers and grain marketers will stay in business.Theres money to be made in 2008..

200 x .75 = $150 more this year than last.

Gary