sw ontario | pigfarmerj - 2/11/2016 09:45
PatH post below really got me thinking about commodity production. Just going over some income projections and the picture seems much brighter on the owned vs. rented ground and the owned ground seems like a pretty good deal cash wise right now DUH. What I wonder is if the magazines in the early nineties pushing rent not ownership were really wrong or is my management much more suited to ownership.
I realize that in my farming operation I am maybe giving up some potential rate of return in this down cycle by not renting it out now, but by the same token I got it all during the meteoric rise in prices. I had a BTO that I know was flying high in the late 2000s that told me the future would be renting my ground out to him. I am still farming, he is not.
We continue to see positive cash return because of ownership both in grains and livestock because of paid for facilities and land. we are not the biggest operation but are growing slowly and steady.
Is land ownership a better way to go in commodity production or is it better suited to my management? Flame away.
Renting has always been promoted as a way to leverage capital and grow in size as in days gone by banks didn't freely offer to loan you xxx million for land,machinery,inputs like today ....... no til and RUP genetics means you can farm many more acres ,faster,less work,ect. and that gets bid into rents ,soon ,if not already rents and inputs will equal returns and low or no real profits........owning land,even how painful it is at the start is only long term solution to farming smaller scale .....in my back yard if you have 300 acres paid for you are much better position to make money than the guys renting 1,000 acres @ $200 acre.......for the last 40 yrs+ ,even during the dirty '80's cash rents dropped little if any....that is short version ,I could ad much more about advantages to be diversified,marry right, get wife good job,ect... good luck........old hog guy Russ Jeckel once said after he expanded a lot "not much advantage to be really big if you are going to go broke" and that was in the '70's |
Ownership,COP, and weathering the storm..
