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Rivers, MB | I'm with dittfarms.
Paying cash for buildings is the way I'd go as well. There is a difference in value from an asset and cashflow from an asset. A cold storage shed keeping machinery in nice shape provides value but not cash flow. A bin that allows you to capture better basis and carry in the futures provides better cashflow. Having more bins that allow you to harvest when you want rather than when the elevator is opening provides value. but maybe not better cashflow.
We have always looked at capital expenditures at there ROI. Which is going to pay back the quickest? That's where we focus our efforts.
Is your machinery size and acres farmed so closely matched that picking up some land would make it impossible to get it done? I'm continually amazed at how over-capitalized most farms are with machinery. We have farms in our area that range from 25 acres to 90 acres per foot of air drill. Salesman told me yesterday most farms would be in the 50 ac/ft of drill. Farm management experts I've heard talk indicate closer to 100 is the sweet spot. Makes me think..... | |
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Finance question about assets
