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| Creating a larger land base spreads out fixed costs. ie. machinery. I don't need to go and purchase anymore equipment or hire more help(To a point). This helps to lower the cost over all my acres. Look very close at machinery costs, they are a BIG part of everyones cost of production. I see alot of people complaining about higher seed, fertilizer, and chemical pricing. Rarely do I see a rant on John Deere or Case, or insert favorite brand here price increases up 8%, up 20%, up 13%, etc. Why not? So by covering basic machinery costs, I'm already ahead 42 bucks / acre. I closely watch wants vs. needs on machinery, I own a JD utility tractor, was this a need? Certainly not a "need" and therefore it can't stand on it's own. By my methods, I shouldn't own it. BUT I don't have a hobby and love to mow, that's my justification. How about a new chromed out Peterbilt, do you suppose that it gets that much more grain to town than my Freightshaker? Want or Need. Crap I don't care if you've got 2 or 3 of Peterbilt's it's your money, not mine, it just adds to your cost of production.
As for above market rent. There's the 20-40 dollars above what everyone else thinks is an acceptable amount. Everyone thinks BTO pay BIG on ever single parcel they farm period. Not true. This was a quick example. As for the WHY? To be poised for the homerun like last year. 500-700 an acre profit. Yeah, I didn't get the 7 dollar mark, was already sold out, but my grain is gone, money in the bank and I cashed in on some Dec call options worth a nice dime. It will happen again.
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BTO crash and burns
