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| Here is my take
350 sows to farrow (newer) barn is valued at around $1750 a sow although $2250 a sow is needed here to build new
= lets assume a value of $612,500
= Lets assume 1100 weaner spaces is needed at $225 a space = weaner barn valued at $250,000
= 1/3 finishing spaces for 350 sows about 1200 finishing spaces = lets use for example avg value $200 a space assuming it is a used a barn worth $240,000
Plus add $150,000- 250,000 for misc. feed equipment, bins sheds
Farm equipment for the cropping end $350,000 (maybe low to some people)
Extras such as buildings, house, shop, bins etc.... $200,000
Land value assuming it is $10,000 an acre 150 x 10k = 1,500,000
Total assets is approx and don't hold me to it because this is an example
Assets= $3,352,500
Debt = $1,500,000
owners equity of $1,852,500 or a debt to equity ratio of 1: 0.821 (if I did that right) which is fairly reasonable if it is a newer setup
Things to take into consideration
- for one I don't know your situation
- We went through some hard times recently
- What if land value drops in the future (your ratio will change)
Correct me if I am wrong
I my opinion it would be best to go 100% f to f and grow all your own corn for feed. That seems to be the most successful sector in the hog market.
Things to make you less risky to a bank
- 100% finish space
-grow and feed your own corn.
- diversification
-good long term production numbers (5 year avg recorded)
-slaughter contracts
-Get upkeep on your equipment, barns, land (assets worth more if you had to sell)
-Benchmark your costs against the industry avg. (be lower then the avg.)
etc....
Edit I didn't see your post above and might of over estimated the finishing spaces
Edited by agricon 4/1/2012 15:05
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