Re: OT young guy's rant

Posted by Seth_IA on December 31, 2005 at 17:51:00 from (167.142.11.145):

In Reply to: OT young guy's rant posted by Rich Iowa on December 31, 2005 at 13:30:48:

Your definatly not alone on this one. I have the same kinds of problems. Running land debt out 40 years may make the payment workable, but you will never get out from under the debt. Despite what some say land prices can and will likely fall. Look at the '80s. There was a very interesting artical in Successful Farming a couple of months ago about farmers who own very little in order to keep their asset turnover ratio looking great. The problem with this idea is that in my area(marshall/story counties) land to rent is in very short supply. As I can't drag myself to take out a 40 year lone I am always trying to get to know old farmers and hoping to someday find an investor looking for land. So far I am not bating very well. I am having a little luck renting small peices that noboddy else wants.

My new venture is starting a custom baling business which I hope will be a good way to get my foot in the door and built assets without alot of price risk. I also started building a ewe flock when I was ten. This has proved to be useful for cash flow. Economy of scale and keeping fixed cost low per unit are very important in making a profit. I would not be able to do what I do with out barrowing tractors from my father and uncle. I swap labor for use. Neither farm enough to pay me, but me using their tractors cost them very litle, and they get help when they need it. It seems to be a great deal for all of us. Right now I could not afford to buy decent tractor, like JD 4430. I am tying up enough money in good hay machinery and other stuff, which neither of them own. The margin looks better in the custom business than on the production side. I usually figure that you make about $30/acre on rented ground and row crops. Hay looks beter in my area depending on the package. My ewes usually make about $30/head. You do the math. It takes about 1000 acres of row crops or ewes to make even close to a decent living. I would like to expand the sheep, but that would require a major upgrade of facilities, which I don't own and couldn't afford anyway. A friend and I are planning to start a tractor painting business since there is great demand around here. He has the shop, I got the skill. Hopfully that will provide a little extra cash flow too. Even with all these venture I don't have enough irons in the fire to make any serious money.

Trying farm and go to college gets interesting, but farming is what I want to do and college is buying me a little time, which will shortly be running out. A good friend of mine who is about your age, is planning to go back since he has no resources to start farming and his coop job is getting him nowhere fast. He hopes to get a better job and be able to afford his farming addiction someday. If anybody has any great ideas I'd love to know them. It seems to me to be all up hill!

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