| agronomydave - 9/19/2014 10:04
Farming needs to be approached from a business standpoint. I understand that land is hard to come by, often times you get only one shot. That being said, if a tract of land becomes un-profitable for your situation, letting it go is dollars ahead. If you purely want to farm acres, keep it and average it in with other profitable acres, but then you're merely robbing those profitable acres of their profit potential to sustain a drain. In ag, most would subsidize the drain acres. In business, the bad business venture would likely be scrapped to maintain max profitability.
Keep in mind that every single farm works from a different set of financials. No two farms are in the same financial situation. Some could look at that property and make $20-30 on it above the increased rent and it becomes a no-brainer for them to pay the additional $25.
My advice is to analyze it long and hard, figure out if you can withstand losing money to farm acres.
If you take that to extremes, it'd also probably make sense for most farmers to rent out their land at those high rates and go work elsewhere until conditions improve.
I don't know if we made the right choice. We may know in a year or two. You certainly have a good point, but I think the equivalent business analogy would be a chain of stores shutting down one store that has been profitable for many years because there is a projected loss for the year ahead.
I suppose there is no truly right or wrong answer, it just depends on the individual situation. |
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