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Bulk Commodity Growers,,,why Farm?........
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Buckwheat
Posted 4/11/2019 22:59 (#7434547)
Subject: Bulk Commodity Growers,,,why Farm?........



Anyone growing “ Bulk “ commodities,,,me included...needs to really do some soul searching here.
First,,,need to set a few parameters.....depends a lot if you are a Owner/Operator or a tenant farmer.

In the Owner/Operator world it’s obviously “easier” to suck it up and take a few poor revenue years....at the same time a tenant farmer will usually have a tougher time as they have no REAL assets on their balance sheet.

Owner/Operator world it’s generally a way of life as well as a business,,,,,,particularly when you are on ground your relatives have poured their heart and soul in,,just to give you a chance.....meanwhile a tenant farmer really has no or very little attachment to the ground,,,which is neither here nor there.

Apologies for the longwinded intro to my thesis point,,,,which actually is the title of this post.

If,,,as a bulk commodity producer,,,,and in particular a tenant farmer bulk commodity producer....If being HEDGED on forward production is necessary to gain a net 2.5 % annual return.....WHY IN THE HE// ARE WE FARMING??........

Crop Insurance, Farm Liability Insurance, Interest on borrowed funds, Depreciation on Machinery, property taxes,,,,,,,,,IF as a producer of BUlk Commodities,,,we are forced to incour the aforementioned expenditures JUST to HOPE to HEDGE a little bitty sliver of a profit,,,,,why not just be a speculator on a paper farm? Just think of the capital you would have at your disposal at the start of every “Paper Farm Season”.......

I have a very thick hide and like to think I can take criticism well,,,,......

Buckwheat
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