Land Bubble? How About a Farm Bubble!

[MoBuckChaser]

I posted this on the other site last year. Right now corn price for fall delivery is $3.75bu. Not Good!

MOBuckChaser

Banned

Join Date: Mar 2013
Location: Hatfield, Missouri/ Each Central Minnesota
Posts: 2,667

My Area new crop corn price for fall delivery $5.08
Central MN Ethanol - Little Falls, MN
Commodity Price Basis Date
Corn $6.82 0.2 2013-06-21
New-Crop Corn $5.08 -0.48 2013-06-21

Our area corn yield is 130bu/acre on a 10 year average. Yes we have had 180 bu corn and yes we have had 60 bu corn in the drought years.

Cost for our corn crop for 2013:

$80/acre land rent average.
$85/acre for Seed
$180/acre for N/P/K and lime fertilizer
$45/acre for starter fertilizer
$35/acre for herbicide, pre and post
$45/acre for spring and fall tillage
$15/acre machinery costs
$15/acre for interest on operating money.
$35/acre for Crop insurance
$9/acre for planting
$28/Acre for fungicide with air application
$40/acre for combining and hauling to farm site
$65/acre for drying, handling and storage costs.
$54/acre for trucking to terminal for sale of corn.
$10/acre for fees at terminal for weighing, dockage and etc.

$5.08 x 130= $660.40/acre average gross income
Total cost for putting in corn, taking it out, getting it to terminal=$741

I could see a potential loss of $80 per acre this year.

And the cost to grow 200 bu corn is a pile more. I would sure hate to have to buy $3,000 an acre land this year and try to pay for it! Guess that is why I am selling and only buying when it is cheap!

Anybody have different numbers lets see them. I Know what my area is, that's why i planted little corn this year!

 

[MoBuckChaser]

The reason i posted this is that last year WAS the start of the farm land Bubble. In 2 years there should be land for sale a lot more reasonable!

With our corn yield last year we saw a bout a $60 per acre loss! We need at least 140bu corn this year.

 

[Jordan Selsor]

I wont pretend to act like I keep up with all this farming economic stuff but what Im reading in your post is that their may be some ag land in my future if prices decline like you predict :cool:

 

[MoBuckChaser]

Today's Close!

Central MN Ethanol - Little Falls, MN
Commodity Price Basis Date
Corn 3.58 -0.54 2014-07-02
New-Crop Corn 3.71 -0.47 2014-07-02
Burnett Dairy Coop - Grantsburg, WI
Commodity Price Basis Date
Corn 3.78 -0.34 2014-07-02
New-Crop Corn 3.52 -0.66 2014-07-02
Soybeans 13.69 1.89 2014-07-02
New-Crop Soybeans 10.66 -0.76 2014-07-02
ACE Ethanol - New Richmond, WI
Commodity Price Basis Date
Corn 3.88 -0.24 2014-07-02
New-Crop Corn 3.73 -0.45 2014-07-02
Gold-N-Plump - Sauk Rapids, MN
Commodity Price Basis Date
Corn 3.53 -0.59 2014-07-02
New-Crop Corn 3.68 -0.5 2014-07-02
Soybeans 12.77 0.97 2014-07-02
ADM Benson Quinn - Saint Cloud, MN
Commodity Price Basis Date
Corn 3.52 -0.6 2014-07-02
New-Crop Corn 3.58 -0.6 2014-07-02
Soybeans 13.35 1.55 2014-07-02
New-Crop Soybeans 10.64 -0.78 2014-07-02

 

[MoBuckChaser]

Mo, Thx for the breakdown. Why then are local farmers in central Wisconsin fighting over paying me $175/acre for central Wisconsin average dirt(corn/beans) with the highest dpsm on the planet? Does the farm bill (our tax $$) embolden a subsidized/welfare mentality?

$175? ...We are in year 2 of a 5 year contract in that I collect $280 per acre for farm land I paid Less than $1,700 an acre for last year in Missouri! A lot of farmers are not very good Bankers!

Edit: and this land has no Base acres. Meaning the farmer gets no extra Gov Cash!

 

[MoBuckChaser]

So how does your $80/acre math work when You are renting@$280?

I ain't renting down there, I am the landlord. It doesn't work! But as long as the farmer pays every year, I don't care. I did not seek him out to give me that kind of money, him and 10 more other farmers sought me out begging to rent my River bottom land! And I let one of them!:D

 

[Freeborn]

John, the item you listed add up to $579, am I missing something? If that is correct you would earn $81.4 per acre.

I am not familar with all of your costs but some of them are dependent on the farmer and others are variable are they not depending on weather (drying for example). My thoughts are you are probably looking for land to buy from farmers who risk more then they should. Do you think there is a broad based land bubble?

 

[MoBuckChaser]

John, the item you listed add up to $579, am I missing something? If that is correct you would earn $81.4 per acre.

I am not familar with all of your costs but some of them are dependent on the farmer and others are variable are they not depending on weather (drying for example). My thoughts are you are probably looking for land to buy from farmers who risk more then they should. Do you think there is a broad based land bubble?

741-579= you are missing $162 worth of addition. Recalculate.

 

[bwoods11]

I ain't renting down there, I am the landlord. It doesn't work! But as long as the farmer pays every year, I don't care. I did not seek him out to give me that kind of money, him and 10 more other farmers sought me out begging to rent my River bottom land! And I let one of them!:D

River bottom land or bottom ground is great soil but in a year like this one every acre is probably drown out or too wet to plant. Happens quite often actually

 

[Freeborn]

Yep, found my error, I had NPK at $18 not 180. Your inputs, is this a worst case scenario?

 

[MoBuckChaser]

John, the item you listed add up to $579, am I missing something? If that is correct you would earn $81.4 per acre.

I am not familar with all of your costs but some of them are dependent on the farmer and others are variable are they not depending on weather (drying for example). My thoughts are you are probably looking for land to buy from farmers who risk more then they should. Do you think there is a broad based land bubble?

Yes those costs are just a average. Drying could be a lot more in a bad year, or a lot less in a good year. Location of Ethanol Plants may help trucking costs. We are 90 miles from the best money. Just the way it is some years!

 

[MoBuckChaser]

River bottom land or bottom ground is great soil but in a year like this one every acre is probably drown out or too wet to plant. Happens quite often actually

That is the good part of researching this farm we bought down there before we bought. I noticed a secondary river bank that was in place along the farm field. The whole state of Missouri would have to flood before this farm would. One of the other reasons for such a high land rent.

 

[SD51555]

Here are the quotes from today around McLeod County:



Am I reading that right that they are getting just over $3/bushel after you subtract the basis? Uffda if that's the case! Try making it on that after all your low spots got drowned out along with your inputs on those zero yield spots.

And to add to the crazy, the land sale of the week from Agweb.com: $20,400/acre in NW Iowa
http://www.agweb.com/article/land_sale_of_the_week_20400acre_in_northwest_iowa_NAA_Mike_Walsten/

$20,400 x 5.2% yield in AT&T stock = $1,060 and you don't need a million dollars in machinery to harvest it.

I'm gonna wait to look for farmland.

 

[MoBuckChaser]

Here are the quotes from today around McLeod County:

View attachment 1157

Am I reading that right that they are getting just over $3/bushel after you subtract the basis? Uffda if that's the case! Try making it on that after all your low spots got drowned out along with your inputs on those zero yield spots.

And to add to the crazy, the land sale of the week from Agweb.com: $20,400/acre in NW Iowa
http://www.agweb.com/article/land_sale_of_the_week_20400acre_in_northwest_iowa_NAA_Mike_Walsten/

$20,400 x 5.2% yield in AT&T stock = $1,060 and you don't need a million dollars in machinery to harvest it.

I'm gonna wait to look for farmland.

That sale was 2 idiot cattle farmers that thought they are forced to buy land to spread feedlot manure on to stay within guidelines of the EPA. I would have just got rid of some cattle at record prices and laughed at the guy that payed $20,000 an acre! I think I will laugh now. Hahahahahahahahahahahaha! What a bunch of Morons!

 

[SD51555]

Yeah, but somebody else had to chase them up that high to get there. Unreal.

 

[MoBuckChaser]

Yeah, but somebody else had to chase them up that high to get there. Unreal.

Only takes 2 fools! They were both at the same auction that day! Hahahahahahahah!

 

[SD51555]

LOL!

 

[MoBuckChaser]

Here are the quotes from today around McLeod County:

View attachment 1157

Am I reading that right that they are getting just over $3/bushel after you subtract the basis? Uffda if that's the case! Try making it on that after all your low spots got drowned out along with your inputs on those zero yield spots.

And to add to the crazy, the land sale of the week from Agweb.com: $20,400/acre in NW Iowa
http://www.agweb.com/article/land_sale_of_the_week_20400acre_in_northwest_iowa_NAA_Mike_Walsten/

$20,400 x 5.2% yield in AT&T stock = $1,060 and you don't need a million dollars in machinery to harvest it.

I'm gonna wait to look for farmland.

The Basis is already subtracted, That is the cash price.

 

[MoBuckChaser]

Corn is down 10 more today and Beans are down another 20. Bubble Bubble!

 

[SD51555]

Farming for free again this year.