2 ms·
> you're never going to be cost competitive at a smaller scale for corn/soy, but you have to accept the market price, which leaves a razor thin margin (if any a
by randomdata 5y ago
> you're never going to be cost competitive at a smaller scale for corn/soy, but you have to accept the market price, which leaves a razor thin margin (if any at all).
You don't really need to be able to compete if you aren't looking for a massive exit, though. My ~150 acres (most of it rented, no less) of corn/soy/wheat provides enough for me to live off of comfortably enough. For about a month's work a year, that's wonderful in my mind.
It seems you're just getting caught up in the capital building frenzy that I talked about earlier. If you want to have the huge payday when you sell then you take on huge debt, grow to massive scale, use all of your income to service the debt and then you're sitting on a fortune at retirement. This is what attracts most people to farming, seemingly you included, which is fair.
If you are content to stay small you can avoid the debt and what the big guy is giving to the bank you can pocket and live well off of. That's where I've settled and it works fine. I won't have the huge payday later, however. It's a tradeoff.
- reducesuffering 5y agoHow did you get into farming? Is the trade in your family? I'm surprised 150 acres is only a month's work a year.
- randomdata 5y agoI'm the seventh generation to farm, or something like that. My parents ran a dairy operation when I was a kid (and still operate their own farm), so I did grow up in agriculture. But, being a tech nerd, I was always more attracted to the big field equipment. In 2007 I invested $12,000 in a small parcel of land I found to rent, rent for the equipment I needed to do the job (along with hiring some customer operators), and lost money doing it! But then 2008 happened, sending commodity prices through the roof. I was able to turn a small profit the following year and used the proceeds to start to buy some equipment, and slowly started to grow from there. So, some definite luck, an investment, and most importantly having family to answer questions. I think it would have been impossible for me without that wealth of knowledge to draw on.
- CuriouslyC 5y agoGood deal that you're able to make corn/soy work without being massively indebted. How much are you paying per acre? Also, I assume you're not selling to a coop or other large scale buyer?
- randomdata 5y ago> How much are you paying per acre? For rent? $265-275/acre, depending on the landlord. > Also, I assume you're not selling to a coop or other large scale buyer? No, that's where it all goes. There is a co-op grain elevator. All of my IP soybeans go there as they pay a nice little premium. Pretty much everything else, including crusher soys, is sold to the closer-to-home commercial grain elevator.