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coup

Posted 9/14/2013 20:48 (#3328218)
Subject: No reason for doom and gloom, let the good times roll

USA

http://talk.newagtalk.com/forums/thread-view.asp?tid=187080&mid=136...

To think having the ability to sell 10,11, 12 and 13 crop corn for a $5 ave seemed to many like crazy talk 3 years ago. Now that we are back to that type of price area seems to be a lot of whaling and nashing of teeth.

Reality is for those who used the hammer with 10 crop and beyond , looks like should be able to come up with around a $6 ave selling price for 10, 11, 12, 13, 14, 15, 16 corn crop without having to sell a bu before it went through the combine.

Edited by coup 9/14/2013 20:48

Ed Winkle

Posted 9/14/2013 21:15 (#3328282 - in reply to #3328218)
Subject: Bill Biederman?

Martinsville, Ohio

I caught Bill a minute on US Farm Report and he said there is a 1/3 chance this soybean price will hold, 2/3 chance it will spike to $14-15 range and a 1/1 chance it will go to $11 in 2014 because of world soy production.

What do you and others think of that statement?

He wasn't optimistic on corn or wheat the next year.

Ed Winkle

jpartner

Posted 9/15/2013 01:56 (#3328584 - in reply to #3328282)
Subject: RE: Bill Biederman?

Ed Winkle - 9/14/2013 20:15

i think he is right...

2ND Best

Posted 9/14/2013 21:23 (#3328303 - in reply to #3328218)
Subject: Re: No reason for doom and gloom, let the good times roll

Is $6 going to make you money in 2016??

ahay68979

Posted 9/14/2013 21:57 (#3328364 - in reply to #3328303)
Subject: Re: No reason for doom and gloom, let the good times roll

Saronville NE

Id like to know how you sell 15 and 16 corn, no bids here past fall of 14.

mjl

Posted 9/15/2013 06:07 (#3328623 - in reply to #3328364)
Subject: Re: No reason for doom and gloom, let the good times roll

ahay68979 - 9/14/2013 20:57

Id like to know how you sell 15 and 16 corn, no bids here past fall of 14.

not selling before its combined is the key here, I think that's what he's saying. Its worked well the last 5 years. With the extreme variations in weather, one might want to actually have it before you sell it. depends on what your comfortable with.

coup

Posted 9/15/2013 07:22 (#3328685 - in reply to #3328364)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

My guess person will have the opportunity to sell 15 and 16 corn after it is the bin for an ave price of $4.50 bu. If it has to be sold for $ 4 ave for those two years, would lower the ave selling price for the 7 years by about $.15 bu.

Under $4 am not a seller.

As I have said more than once a person should have @ least 150% of APH in on farm storage, with a goal of @ 200% APH.

Edited by coup 9/15/2013 07:23

GrainTrader

Posted 9/15/2013 08:49 (#3328828 - in reply to #3328685)
Subject: Re: No reason for doom and gloom, let the good times roll

20 Miles West of Indianapolis Indiana

You gotta sell a little grain at some point to pay for all that storage coup.

coup

Posted 9/15/2013 08:59 (#3328858 - in reply to #3328828)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

Not hard to pay for more storage with the excess above $4 bu corn for years 06, 07, 08, 09, 10, 11, 12.

$5.50 ave selling price- $4 =$1.50 x 7 years = $10.50 bu. @ $2 bu bin cost = 500% APH.

Big Ben

Posted 9/15/2013 14:15 (#3329429 - in reply to #3328858)
Subject: Re: No reason for doom and gloom, let the good times roll

Columbia Basin, Ephrata, WA

So you're saying that you needed to have that much storage before '06 and that the years since then would have paid for it. Isn't hindsight grand? I bet you'll be able to come back here in six years to tell us what we should have been doing for 13-19. Real helpful.

coup

Posted 9/15/2013 15:09 (#3329499 - in reply to #3329429)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

Well have been preaching the bin building @ 200% since @ least 2007, originally posted on SF site 1/1/2007. Got lost when they re did things over there.

2011 post is the same as what was posted back in 2007, only prices were updated. Main thing that have missed is wheat market goal of $10.

Only thing that would change now is won't sell corn under $4 instead of $3.75 price. With he new price plateau we are @ $4 corn is like $2 corn pre 2006.

http://talk.newagtalk.com/forums/thread-view.asp?tid=204499&mid=151...

Edited by coup 9/15/2013 15:10

Big Ben

Posted 9/15/2013 15:21 (#3329522 - in reply to #3329499)
Subject: Re: No reason for doom and gloom, let the good times roll

Columbia Basin, Ephrata, WA

I missed the early threads about bin building. We spent a lot of borrowed money to put up bins in '05 and '06, and have done well with them. In hindsight, could have done even better, but that's almost always the case.

I hope you're right about $4 being the new $2, I can live with that. There seem to be a select few on this board that seem to think corn could actually drop into the $2 range again.

coup

Posted 9/15/2013 15:28 (#3329542 - in reply to #3329522)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

Corn price below $4 for a couple of years, would curtail corn production in a big way, with cost structure that has been built in for many.

IALTO

Posted 9/15/2013 17:12 (#3329766 - in reply to #3329542)
Subject: Re: No reason for doom and gloom, let the good times roll

WC MN

In your opinion what would people plant instead?

coup

Posted 9/15/2013 17:44 (#3329824 - in reply to #3329766)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

More grass, hay, and cattle for starters.

IALTO

Posted 9/15/2013 17:48 (#3329830 - in reply to #3329824)
Subject: Re: No reason for doom and gloom, let the good times roll

WC MN

At $3 corn roughly what percentage do you think you would put of your own operation into those things? How about your general area? I'm from an area with no grass, hay, or cattle so hard for me to grasp some of the other thoughts that people have on these things.

coup

Posted 9/15/2013 18:30 (#3329904 - in reply to #3329830)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

If cash corn is $3 here my guess in the places where demand is lacking price will be closer to $2bu. Current trend is less corn acres in traditional corn growing areas, with increased acres in non traditional areas with out a solid demand base.. Would have to look it up, but from memory the County I live has reduced corn acres around 20% from the peak years. To many have taken it in the shorts with COC yields since 2008.

$3 corn, $6 beans would = more shift to bean acres. here Increase in cattle in this area would be slow @ first, but $800 calves would get more folks attention, if grain was cheap for a prolonged period. The increase more than likely would come in the less productive crop production areas that have switched from cattle to row crops.

As far as me would not add cattle as I can make things work with $3 corn.

IALTO

Posted 9/15/2013 18:39 (#3329916 - in reply to #3329904)
Subject: Re: No reason for doom and gloom, let the good times roll

WC MN

I'm from an area that was traditionally a small grains/soybean producing area up until about 10 years ago and the trend towards corn has really accelerated the last few years. We can grow 150 BPA corn easier than 40 BPA beans and can do much better than 150 if the weather works right. Not sure that anything will pencil out with $3 corn and $6 beans. Might come down to what loses you the least or has the outside chance to break even.

coup

Posted 9/15/2013 20:12 (#3330135 - in reply to #3329916)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

Ialto,

Don't know about in your part of the world, but from the looks of things in this part more than one have squandered the opportunity to build a strong war chest to weather any type of long term financial short fall. Definitely a lot fat that will be hard to trim with the type of COP they have got themselves into.

Big Ben

Posted 9/15/2013 21:26 (#3330397 - in reply to #3330135)
Subject: Re: No reason for doom and gloom, let the good times roll

Columbia Basin, Ephrata, WA

What do you see as the fat that's going to be so hard to trim? High rents, annual new iron, new bins, snowmobiles and vacation homes or ??

Edited by Ben in the Basin 9/15/2013 21:26

feelnrite

Posted 9/16/2013 09:01 (#3331058 - in reply to #3330397)
Subject: Re: No reason for doom and gloom, let the good times roll

northwest tennessee

The hardest thing to trim will be the high standard of living. That is always the hardest to cut back on because you have kids and wives that demand it. The operation will suffer before any of that goes.

Noah

Posted 9/15/2013 18:56 (#3329947 - in reply to #3329904)
Subject: Re: No reason for doom and gloom, let the good times roll

SW MN

If you don't mind my asking, what yields do you bases your break evens on? Don't need actual yield but......5 yr Aph? 10 yr Aph?

coup

Posted 9/15/2013 20:31 (#3330209 - in reply to #3329947)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

160 bu corn x $3= $480- $70 Mach & Fuel- $45 N- $40 seed- $30 DAP- $11 Potash - $30 chemicals- $30 drying- $30 labor- $100 land cost= $94 acre. Won't buy any crop insurance if price of corn gets to $3 bu..

rupert

Posted 9/15/2013 22:34 (#3330580 - in reply to #3330209)
Subject: Re: No reason for doom and gloom, let the good times roll

Boy coup some of those numbers are way off. Ill just pick one, where you finding N that cheap?

coup

Posted 9/16/2013 21:39 (#3332215 - in reply to #3330580)
Subject: Re: Acctually costs sed not that far from reality

USA

Was figuring 164 lbs N, 150 lbs DAP and 70 lbs Potash.

Prices I was using wereWAG where prices might be with $3 corn, fert prices used probably on the high side with $3 corn way things are currently looking.

Here are current prices that was quoted today. $420 DAP, $391 potash, $272- 32%

150 lbs Dap @ $420 ton = $31.50 acre

70lbs Potash @ $391 ton = $13.68 acre. Looked again @ the removal chart was on the wrong line requires about 80lbs Potash @ $391 ton= $15.64 acre.

Haven't checked on NH3 price lately, but if 32 is $272, should be able to buy NH3 in the $550 ton area.

164 lbs N- 27lbs N from DAP= 137 lbs N. $ 550 ton NH3 =$.335 lb N x 137= $45.94 acre.

Looks like was about $1 acre to low on N, $1.50 low on DAP and about $4.50 acre low on Potash = $7 acre. Don't see how that is way off.

Edited by coup 9/16/2013 21:40

Mlebrun

Posted 9/15/2013 23:16 (#3330652 - in reply to #3330209)
Subject: Re: No reason for doom and gloom, let the good times roll

SW MN and Gold Canyon AZ

40$ seed cost? Replant price is more than that! I say bull..100$ a bag? Floor sweepings? Can't be getting the newest highest-yielders for that

GrainTrader

Posted 9/16/2013 06:19 (#3330792 - in reply to #3330652)
Subject: Re: No reason for doom and gloom, let the good times roll

20 Miles West of Indianapolis Indiana

He's probably making assumptions that the inputs will come down some. Strait non GMO corn could get that low with $3 corn I recon. Coup is always talking about ways to"trim the fat"....

coup

Posted 9/16/2013 21:49 (#3332258 - in reply to #3330652)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

Melbrun, you need to find a different supplier for seed.

No floor sweepings for me , buy top of the line genetics. Buy enough with a no return policy, seed corn can be bought quite a bit cheaper.

Edited by coup 9/16/2013 21:50

mjl

Posted 9/15/2013 21:42 (#3330451 - in reply to #3329904)
Subject: Re: No reason for doom and gloom, let the good times roll

coup - 9/15/2013 17:30

If cash corn is $3 here my guess in the places where demand is lacking price will be closer to $2bu. Current trend is less corn acres in traditional corn growing areas, with increased acres in non traditional areas with out a solid demand base.. Would have to look it up, but from memory the County I live has reduced corn acres around 20% from the peak years. To many have taken it in the shorts with COC yields since 2008.

$3 corn, $6 beans would = more shift to bean acres. here Increase in cattle in this area would be slow @ first, but $800 calves would get more folks attention, if grain was cheap for a prolonged period. The increase more than likely would come in the less productive crop production areas that have switched from cattle to row crops.

As far as me would not add cattle as I can make things work with $3 corn.

At $3 corn and $6 beans, I'd just raise continuous corn.

ahay68979

Posted 9/15/2013 22:24 (#3330557 - in reply to #3330451)
Subject: Re: No reason for doom and gloom, let the good times roll

Saronville NE

Id like to know how you get land cost at 100 an acre? Heck land taxes alone here are close to $30 an acre.

feelnrite

Posted 9/16/2013 09:02 (#3331060 - in reply to #3329824)
Subject: Re: No reason for doom and gloom, let the good times roll

northwest tennessee

I dont think that will happen. You cant just jump in cattle and see a return anytime soon unless it is feeders. People are not going to work like that either, look at them they are not capable of doing it.

coup

Posted 9/16/2013 21:15 (#3332125 - in reply to #3331060)
Subject: Fellnrite are saying grain farmers have gotten fat and lazy? NT

USA

GrainTrader

Posted 9/15/2013 09:05 (#3328874 - in reply to #3328218)
Subject: Re: No reason for doom and gloom, let the good times roll

20 Miles West of Indianapolis Indiana

So you think I'd be crazy not to jump on a sizable land purchase right now?

coup

Posted 9/15/2013 09:33 (#3328940 - in reply to #3328874)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

Depends.

Can you make things work with $4 corn price with your current income stream, plus the new purchase?

How much fat can you trim from the 300 acres you currently farm to help with the new purchase, 300 acres x $30 = $9000.

From the post you made the other day about int cot @ 6.25%. You should be able to do better than that. I would talk to the folks @ FSA. If you have farmed less than 10 years, they will guarantee 95% of the loan, FSA will take a second and loan up to $225,000 for 20 years @ 1.5%.

IMO if can cash flow the purchase with $4 corn @ 6.25% int would go for it, but would shop around, like I mentioned before.

coup

Posted 9/15/2013 09:41 (#3328962 - in reply to #3328940)
Subject: Re: One other thing to consider

USA

If you go with the FSA deal, you only have to come up 5% down. Put the extra money left from the required down payment by FLB in a reserve fund to help supplement payment shortfall years if they arise. If you can have 2 to 3 years of payments setting on the sidelines from the get go , IMO not a lot of risk in buying the dirt.

thekcirp

Posted 9/15/2013 09:46 (#3328970 - in reply to #3328940)
Subject: Re: No reason for doom and gloom, let the good times roll

NEMO

I think he better use a lower corn price for his cash flow projections. With the payment on current land prices and him only having 300 extra acres to rob from, he's gonna have to sell some corn at some point to make payments. Also, he wants in the worst way to quit his town job and I hope he can, but he better think long and hard about a big land purchase and where that might leave that dream. Three for years(or more) in a row of mid-late 80's type profits and he could be lookin at a retirement from the town job 35 years down the road instead of 3.5 years. Good luck. JMO

GrainTrader

Posted 9/15/2013 10:05 (#3329027 - in reply to #3328970)
Subject: Re: No reason for doom and gloom, let the good times roll

20 Miles West of Indianapolis Indiana

I'm prepared to stay here at the factory if need be. Its a pretty tough safety net to give up for the time being and I realize that more and more every day. I think I can farm 6-700 acres and still work here if need be.....

GrainTrader

Posted 9/15/2013 09:55 (#3328994 - in reply to #3328940)
Subject: Re: No reason for doom and gloom, let the good times roll

20 Miles West of Indianapolis Indiana

Who else will lock in rates for 20-30 years?

coup

Posted 9/15/2013 10:04 (#3329025 - in reply to #3328994)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

Farmer Mac trough a bank with FSA guarantee behind it. My son done the FSA deal last year with his first purchase. Where you might not qualify is if you already own more land than FSA allows . Then FSA will guarantee up 90% of the loan, take a second and loan up to $300,000,don't know what the current rate would be, but would probably a lot less than 6.25%.

mkfarm

Posted 9/15/2013 11:17 (#3329152 - in reply to #3329025)
Subject: Re: No reason for doom and gloom, let the good times roll

SE MI

Are you able to get a loan with the FSA if you are approved elsewhere? When I was looking into it that was the case against me.

coup

Posted 9/15/2013 15:20 (#3329517 - in reply to #3329152)
Subject: Re: No reason for doom and gloom, let the good times roll

USA

Mkfarm

Did not know about the FSA program, when my son bought the ground.

Plan was ,bank was going to take a first on about 55%, I was going to loan him the rest. After the land sale found out about the FSA program. He done the paper work and got approval from FSA. Bank had to bridge loan the FSA part until they got funded. Bank really likes these type of loans as they basically have no risk.

Edited by coup 9/15/2013 15:21

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