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Nw Iowa | I don’t disagree with any of your post but My point was you were giving a pretty big example for what original poster was asking about as you said you were in same boat.. Maybe you can afford to do it all at once and overbuild that’ much for future ( good for you) but most can’t. Government loans are cheap which is good thing but bin cost per bushel and legs and pits cost some pretty big money. Not against bins or drying but building the dream setup for most with economics where they are is a stretch. A lot of 3 to 4$ per bushel cost which could add 30 to 40cents or more to your per bushel cost after overhead, taxes, insurance, interest and depreciation.There are a couple of other things to weigh out when building and one is that banker will let you put your grain setup on your balance sheet at a new cost and a 25 year dep or whatever they do but in reality they will value it very low when they do their internal reviews because resale is very tough unless you package other assets with it, so it may screw up your debt to asset ratio. Second most of these setups have just went up in last 15 years, and in another 10-15 years will need quite a bit of repairs as in augers, conveyors and other wear items. ( example 400$ elbow on top of spout that needs repair but costs 2-4000 to replace) . A lot of this is expensive especially when crane and millwright involved. It generally isn’t as easy as going to town and buying a new auger.
We have built or completely remodeled a number of sites and have new legs and older ones so I am not against storage and dryers but just go in to it with eyes wide open. Trying to guess what you will need in the future can be a wild ride. In 10 years the state of art combine has went from 3000 to 4000 bph, now advertised over 6000 bu an hr. That’s in 10 years. Don’t have answers just questions . Ag margins make a lot of these decisions very difficult. | |
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grain set up questions.
