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| Lots of comments here, but there are some things to think about:
1. Growth - what's the point? To have a bigger debt when you go under? However, if you are making money on each acre, growth is the way to get more money. Getting more land at all costs means just that - at all costs. There is no special prize for making stupid decisions that cost you your career. Frankly you want to be growing when everyone else is running away. $225 for your area doesn't look like anyone's going anywhere yet. The problem is it's difficult to be different than everyone else.
2. Costs -
there is no free lunch or magic farming practices or a certain farm size where inputs are given to the farmer like sponsorship. It does happen that way sometimes, but that usually because the guy walks away from the debt/BK. However, as with any business you need to find a way to make it work. Being different from others isn't a necessity, but maybe you can't farm like a guy who inherited all his land and equipment either. Some of this is just doing your homework with soil tests and reasonable yield goals (not all ground yields 200). We don't have the grain prices to support throwing the kitchen sink at the crop, at our machinery line up or our standard of living. The seed that had a 20 bpa advantage in a 250bpa yield environment may not be a wise 'investment' with our current market conditions and your yield environment.
Over time this is about the only area where you actually have some control. It's unlikely to "market" your way out of a bad situation.
3. Going forward: Lots of guys will be in the hurt category this year. It's been noted here that lots of folks are still paying too much rent as if they have it all figured out. The market doesn't respond immediately to a downturn and typically this makes it worse. Guys stay in the hope phase too long. It's best to be in a position to take advantage of the opportunities that will be coming, but be patient because it takes a while. It may even appear to be recovering at times, but the fundamentals (too much grain everywhere and plenty of land in production) will not support it.
This isn't a time to be forcing your way in hoping grain prices are going up. The normal is near the cost of production vs. what we had the past few years.
In general I don't think you should mess with the 'grace' your father has given you or just pay him what you would pay someone else. | |
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Southern IL rent
