Do's and Dont's Advice

[smstonypoint]

How is the Renter Farmer making money?

Chances are he is farming a heck of a lot more than 50 acres.

Steve

 

[Newtothis1]

Chances are he is farming a heck of a lot more than 50 acres.

Steve

Yes he is, it just seemed possible to make some money with all of my equipment 100% paid for. He's finding a way to do it large scale, tending many thousands of acres and paying millions of dollars on new equipment every year

 

[smstonypoint]

Yes he is, it just seemed possible to make some money with all of my equipment 100% paid for. He's finding a way to do it large scale, tending many thousands of acres and paying millions of dollars on new equipment every year

Are you renting to Justice Family Farms?

BTW, I just checked -- NC new crop soybean contracts ranged from $10.53-11.24/bushel today (http://www.ams.usda.gov/mnreports/ra_gr110.txt).

Steve

 

[smstonypoint]

Actually, your realized net gain is only $4,537.50 since you receive $4,000 for doing nothing. Lotta work for $4,500.

I have my doubts about the $4,537.50, but you hit the nail on the head in saying that the rent forgone is an an opportunity cost of growing soybeans or any other crop.

Steve

 

[dave1949]

I can understand the urge to get your hands in the dirt and maybe make some money. If your main issue is that you think you aren't getting enough return on the land, there are examples to look at involving specialty markets. Seems like limiting yourself to big market commodities like corn, beans, etc., is like tying one hand behind your back.

As far as I know, farms break even or lose money some years, do better in others. The size of the acreage wouldn't change that expectation since it is caused by the market and weather--two things beyond your control. Are you prepared to live with the bad years while thinking dang, I could have had $4000? If you experience a really bad year and two so-so break even years back to back, it will be three years with no net farm income at all.

 

[Newtothis1]

I can understand the urge to get your hands in the dirt and maybe make some money. If your main issue is that you think you aren't getting enough return on the land, there are examples to look at involving specialty markets. Seems like limiting yourself to big market commodities like corn, beans, etc., is like tying one hand behind your back.

As far as I know, farms break even or lose money some years, do better in others. The size of the acreage wouldn't change that expectation since it is caused by the market and weather--two things beyond your control. Are you prepared to live with the bad years while thinking dang, I could have had $4000? If you experience a really bad year and two so-so break even years back to back, it will be three years with no net farm income at all.

I can appreciate all the comments. Yes, I am anxious to do something with my own land but its starting to sound like I should just leave well enough alone or maybe plant it all in pine trees since I'm only 30 yrs old

 

[paulharvey]

Pine trees aren't as good as once. In North Florida I've noticed several tracks of pines cut for pull being replaced with blue berries. Wood demand is slow with decreased construction demand.

 

[dave1949]

I can appreciate all the comments. Yes, I am anxious to do something with my own land but its starting to sound like I should just leave well enough alone or maybe plant it all in pine trees since I'm only 30 yrs old

Well heck, you are young man with plenty of time ahead of you to develop a niche market product if you plan on staying put. I assume the greater Raleigh area will see significant population growth over the next several decades? If so, you have an expanding market opportunity. There seems to be a steady market for quality products in areas with the income to support it.

 

[TripleR]

I know all I am doing is trying to plug in numbers for a baseline and hoping for some positive feedback telling me what I wanted to hear. You are correct that my lack of experience gives me no concept of the costs and risks involved. Your opinion kind of sounds like the others.....to stay away from it. I have to trust what experienced farmers tell me and i appreciate you telling it like it is. I hate that it sounds like I have to settle for $80 an acre rent money

I would check to see what others are getting for cash rent, it is $125 at the low end up to $200 or more. Mom does a crop share, but I want a set yearly amount, I "gambled" on crop yield enough years already.

Trust me, I sure understand your desire to farm the land, we kept our no till planter until selling it last; man hated to let that thing go.

 

[toomanymachines]

I wont have to deal with driers or grain storage with this small amount. i should be able to pick at correct moisture content and haul strait to the grain buyer(only 10 miles away). I guess what I cant wrap my mind around is that an acre cost x amount of dollars to plant and harvest, and profits x amount of dollars, no matter how many or how few the acres. People are telling me due to our long growing season I can turn two crop cycles per year and should be able to clear about $800.00 per acre. Does this sound very far fetched?

Eight hundred dollars an acre sounds very high. If that was true farmers would only need 100 acres to survive. I think 100 dollars clear may be a better number.
One thing that will help, is that you will be able to write off all the expenses. Whenever you travel to town for groceries, just make sure you pick up a bearing.. fuel is written off..
like others have mentioned, if you think others will come and do custom work, well maybe, but you would be low priority with only 50 acres. Why would they move for that if they can do 160 acres for someone else.
It is nice to be your own boss.

 

[Newtothis1]

Eight hundred dollars an acre sounds very high. If that was true farmers would only need 100 acres to survive. I think 100 dollars clear may be a better number.
One thing that will help, is that you will be able to write off all the expenses. Whenever you travel to town for groceries, just make sure you pick up a bearing.. fuel is written off..
like others have mentioned, if you think others will come and do custom work, well maybe, but you would be low priority with only 50 acres. Why would they move for that if they can do 160 acres for someone else.
It is nice to be your own boss.

Well, picking it really is of no concern. I have a great relationship with my neighbor who would be glad to pick it for me. He only tends about 75 acres of his own land. The low acreage that we both have wouldn't take him long at all to pick. He plants some of his crop to feed his livestock with and sells the rest and he acts like he does alright doing so profit wise. There are just so many mixed feelings on it from everyone you ask. That's what is so confusing

 

[dave1949]

Well, picking it really is of no concern. I have a great relationship with my neighbor who would be glad to pick it for me. He only tends about 75 acres of his own land. The low acreage that we both have wouldn't take him long at all to pick. He plants some of his crop to feed his livestock with and sells the rest and he acts like he does alright doing so profit wise. There are just so many mixed feelings on it from everyone you ask. That's what is so confusing

Your neighbor is "adding value" to his corn crop by converting it to beef.

 

[smstonypoint]

I would check to see what others are getting for cash rent, it is $125 at the low end up to $200 or more. Mom does a crop share, but I want a set yearly amount, I "gambled" on crop yield enough years already.

Trust me, I sure understand your desire to farm the land, we kept our no till planter until selling it last; man hated to let that thing go.

Cash rents differ across states, within states, and within counties in individual states. TripleR is located in the Midwest were yields (at least for corn and soybeans) are usually higher than in the Southeast. Rents for individual tracts are going to depend on soil fertility and yield potential,crop prices and profitability, size of tract, irrigated versus non-irrigated, location relative to markets and other farmland, etc. You can check the average cash rent by county here: USDA/NASS QuickStats Ad-hoc Query Tool.

The average cash rents for non-irrigated cropland in Edgecombe and Nash Counties, NC were $87 and $90.5/acre in 2013.

Steve

 

[Fossil Farm]

If you really want to farm, talk to your renter and see if he will rent 20 or 30 acres of your 50 for a couple years. You can farm the rest and see how it goes for a year or two. If you like what you are doing, then you can take over all 50 acres.

Our farm is 60 acres, 40 tillable. Dad started with a MF 35, two bottom plow and several old horse drawn pieces of equipment altered for tractor use. Raised steers also. Got off his day job, worked till midnight on the farm during planting season, almost every weekend, holiday, etc. You basically have the same setup, 35 to 40 horse tractor, 2 bottom plow and a disk. Hours on the equipment will add up fast, hope you are a good mechanic and welder. If you rely of someone else to borrow equipment or harvest for you, just remember you will be last on the list in most cases. Soil conditions will not be ideal when it is your turn to plant or harvest with someone else's equipment.

A gift of 80 dollars an acre in rent may look grand after finding out what all is involved, but if you find out you really love farming, starting with 20 or 30 acres may get you hooked.
Good luck with whatever you decide.

 

[Newtothis1]

If you really want to farm, talk to your renter and see if he will rent 20 or 30 acres of your 50 for a couple years. You can farm the rest and see how it goes for a year or two. If you like what you are doing, then you can take over all 50 acres.

Our farm is 60 acres, 40 tillable. Dad started with a MF 35, two bottom plow and several old horse drawn pieces of equipment altered for tractor use. Raised steers also. Got off his day job, worked till midnight on the farm during planting season, almost every weekend, holiday, etc. You basically have the same setup, 35 to 40 horse tractor, 2 bottom plow and a disk. Hours on the equipment will add up fast, hope you are a good mechanic and welder. If you rely of someone else to borrow equipment or harvest for you, just remember you will be last on the list in most cases. Soil conditions will not be ideal when it is your turn to plant or harvest with someone else's equipment.

A gift of 80 dollars an acre in rent may look grand after finding out what all is involved, but if you find out you really love farming, starting with 20 or 30 acres may get you hooked.
Good luck with whatever you decide.

Thanks, What you have described is what I was actually considering. My land is broke up in a 15 acre piece and a 35 acre plot. I only have interest in possibly tending the 15 acres for at least the first year just so I can see first hand what I'm getting myself into before trying to tackle all 50 acres

 

[Gary Fowler]

WHAT I HATE ABOUT FARMING: Every thing one does in farming is costly and you end up depending on what someone is willing to pay you for your product regardless of how much you have invested in it. UNLIKE every other business that sells their product at a price set by them, farmers always get what a buyer is willing to pay or what the government sets as a loan price for the commodity. It is really an no-win situation for the farmer. My advice would be to continue to cash rent the place

That said, I think your expenses are set a bit low for fertilizer and harvesting and will throw your profit figure way off. When I did farming with my Dad, we charged 1/4th of the crop for harvesting beans. You should find out what a local farmer is going to charge you to cut the 15 acres and when they can get to it. It may be advantageous to have your crop harvested with your renters in order to get them done at the same time. Try to plant at the same time that he does so they come off at the same time Soybeans have to be cut pretty soon after they are ready or you will loose a lot of them from popping out of the shell when they are harvested if allowed to stand in the field too long AND since they are sold by weight, any thing less than optimum moisture and you will lose money. They deduct for excess moisture content at the grain elevator but I have never seen them give more for a dry bean. I have seen grain elevators when selling them set up a water spray on the conveyor to wet the beans down to gain some moisture content and keep dusting to a minimum prior to them going on a ship or barge.
Fifteen acres shouldn't take you all that long to prepare with a 6 foot disk. I don't know if you are set up for no till planting or not, but that would be fast although chemicals are expensive to spray on the grass.
You may make some money using this as a tax write off, but be careful with the IRS calling you a hobby farmer and not allowing you any expense write off.
Weather permitting, you may have a good crop and make good money 1 out of 4 years which is why most farms in my area depend on irrigation systems which would be out of the question for your small acreage.