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| IMO no marketing plan does not work very well over the long run, so kudos to those smart ones who hedged!
The county average in my area is around 160 bushels an acre and if $4.50 corn is the best we can expect for the next couple of years, does it really make sense if there is debt against the land or the land is rented?
Here is what I am looking at:
Revenue – 160/BU/Acre x $4.50 - $720
Seed - $100
Fertilizer - $200
Chemical, Fungicide and Herbicide - $50
Rent - $275
Crop Insurance - $15
Property Insurance (Equipment) - $15
Repairs/Maintenance - $75
Total Cost - $730
Note: Most landlords have been able to get more than $275 rent in the past couple years. Seems like if the landlord makes any effort on quality ground it is more like $350 or better in my area of Iowa.
IMO either the rents or land values have to start coming down if these prices persist. Having a sound marketing plan is the difference between being in a position to expand and just trying to get by to the next cycle. | |
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good marketing
