The further out you go the more uncertainty there is that they will be profitable. Kind of the same principle of buying insurance only in reverse. You are being offered less money because you will know that your barn will be filled for a longer term and the company that owns the hogs is taking more risk because they don't know what the hog or feed prices will be 10 yrs from now. Are all 3 offers from the same company? If there is substantial debt against the buildings or you really don't want to own pigs yourself then the 10 yr deal is probably the way to go, esp on older buildings.
Edited by Kooiker 2/16/2012 20:52
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