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| I agree that you need to be careful. We've been at 10 years with a local guy and friend. We've had some rough times to navigate and when we built another building in 2007 we ended up refinancing and adding years to our loan. Turns it out it was a good move since we ended up taking a temporary pay cut to deal with some tough circumstances. It's different when you know the folks you are working with and I'm not as sure when it could be a different face every 6 months.
As far as the contract goes, the bank won't do the loan unless the contract amount extends until the loan expires (10 or 11 years). As GG stated though sometimes the contracts are not worth the paper they are written on if one of the parties wants to drop out. Our 10 year old buildings are finally needing curtains which might run $700 and my time - not so bad. I've got some gates I have to weld a little on, but in general we run a group of pigs, wash it out and start over. If anything, furnaces seem to die well before their time. The cost of propane makes it more interesting as well.
Here are some points:
1. We have cash in the summer when we never did just being small grain farmers
2. It takes all the payment and some grain money to heat the buildings some winters
3. Custom manure is way too expensive, new equipment is unreasonably expensive and cheaper equipment won't last that long and it's a lot of work - it's great fertilizer though and these days it might be one of those $100/hr jobs
4. Manure is great fertilizer, but remember to either spray on 10 gpa of 28% or side dress a little ammonia or 28, because apparently the N in manure doesn't really get going until later in the season.
5. $38/pig space (7.5 sq ft) is pretty common and with elevated building costs, some guys will pay a little bonus for the term of the loan.
6. Probably best to stay away from scales since they require pig training at first and usually break or get eaten by mice just before load out - otherwise it's a great system
7. Be careful on feeder selection - feed components come from everywhere and some feeders handle better it than others - paddle type feeders are fantastic on standard, well ground feed but won't feed chunks, feeders like crystal springs type will, but don't perform as well
8. It's cheaper per pig space to build a larger building. A 2400 (or double wide as I think of it) is a nice size and it's all under one roof.
hth,
Pat | |
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Hog finishing contracts
