Posted by jackinok on November 15, 2011 at 10:38:47 from (162.58.82.136):
In Reply to: OT. FUTURE OF FARMING posted by NE.IL on November 15, 2011 at 02:56:57:
heres something to think about,we all want to buy that 1000 acre parcel of land but lets look at it honestly. first, the profit margin on one acre is just the same PER ACRE as 100,000 acres. If you can make one pay,it stands to reason with the right equipment you could make 100,000 pay. Its all just a matter of scale. second ,let me lay out a scenario for you. Lets say your just starting out. What if you owned a ten acre plot of land where you live,and 100 acres comes up for sale next door to you on one side,and 10 acres on the other. Which would be the wiser investment? Say you bought the ten acres on a five or three year note,and are able to make payments. When you make that last payment you've made your buisness 100% increase in 3-5 years.Can gm do this? ford,dodge any of the traded stocks? how many ceo's can claim that?Ive taken something I can afford( remember being able to afford something means you can pay for it in good times and bad)and made it work. But lets say i bought the 100 acres and its more than you really could afford. The only way you can possibly make it pay is for it to pay for itself. You've risked your entire lively hood on a buisness that is risky at best and you have nothing to fall back on. But lets say you make it pay and you make that payment. You've invested your whole working capital into it. Its taken every thing you have or can borrow to put in a crop and get it to market. Which is the better buisness decision? which scenario could you walk into the bank lay your books out in front of a loan officer and be in a better position to buy the next place? what that banker is going to look for is not how many acres you have ,hes not in the real etate buisness. What he wants to see is a guaranteed gain,not a chance encounter with luck ,and not a place he has to finance the crop on. You may have spent more, you may have gained more but who is better positioned for growth,that will make not only you but the bank money?the one thats secure of course,not the fellow asking for operating funds. Hes land poor. If you bought the ten acres,your in a much better position finacially to walk in and say i want to expand more . This is how those big boys do,just like this,they play in a different league than you but they have far and away more time to get there. Its simply a matter of degrees,where you and i spend a 100 they spend 10,000. But they've had several generations of guys doing it. no reason that you cant do the same,its all just a matter of starting and doing it right.
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