Indiana | IN555 - 10/4/2017 11:43
So to cover your variable cost as you suggest, say your aph is 170 that means your break even is 2.06/bu. How many opportunities has there been to buy the board at that? ?
Yes. There have been lots of opportunities to sell at much higher than $2.06 meaning I am much better off raising the crop than not raising the crop. I would be a fool to buy the board in hopes of making .50 a bushel when I could SELL the board now and "make" $1.50 to apply to fixed costs such as land and overhead.
If I can't sell corn for at least $2.06 I should not be raising corn!!! In theory I could just buy corn at $1.90Z and save myself $.16 a bushel.
Sorry if you misunderstood me. My point was that it is still better for a farmer to plant and lose a little money than to NOT plant and lose even more money. |