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cropsey, il 61731 | The reality of the situation is that we have had big prices for quite a while and even see some complaining "why isn't corn $6, I have new iron to pay for" (my paraphrase). Regardless of political winds, we farmers are often our own worst enemy. We will bid away any profit (or get a tasty loss/acre) just to get one more. The concept of a stable business with modest growth when opportunity arises is so old school (if it ever really existed in farming). We also get trapped into last year's marketing strategy and refuse to "roll with the changes". We forget that the market does not owe us our breakeven and that bankers face no penalty for encouraging businesses to overextend themselves. It's the business we chose and it's a great one as long as we are aware of the realities.
Some would suggest farmers unions (lets hold our grain to force the market up) or very fine, even sweet, gov't regulation (or just payments forever). The "good risk managers" always seek a bailout. What we should do is put the magazines down since those experts don't run businesses anyway and set about creating a stable farm business. It's no fun since you don't buy new very often and you're always working on reducing costs since that's about all you can control. It's unlikely to pick up acres without paying a fair price or rent, but you don't have to beat the next guy when it's already too high. There are guys that say they farm for $5/acre profit. We all know that can be wiped out with a small price change, extra spray application or any other unknown. Most of us can not guess our gross/acre within $50, so bidding that all away isn't a good business decision. Even expecting $20K/acre land to pay off in your lifetime is unrealistic (I understand families that keep the farm for generations look at this differently).
I'm just saying if we ran our farms more like businesses rather than "I'm going to farm it all" "go big or get out" "if we are not growing 500acres/year, we are going backwards", we may be less tempted to overpay. Of course, with the right politicians in place, the "save the farm act" will support your $750/acre rent.... | |
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U.S. FARM COLLAPSE
