The right price for grain has to be calculated on a average crop.
I can’t understand why some farmers say they can’t calculate their input cost early in the year and on the other hand say they have all these management skills. ( this is your formula ( !-&%*$@#? )
Charliep: your last comments are excellent and people should read them more than once, because all the marketing options are there for next year sales.
This is one way to establish a reasonable price for a bushel of grain. Farmers have a tendency to throw everything in one pile, and then try to dig out solutions for their problems that are not in that mess.
Start by listing your last years input costs for: fertilizer, seed, chemicals, fuel and bank loan charges ( if you need a loan for operating )also check your suppliers for this years prices for the same products. Now use your farmer management skills to come up with a pretty reasonable cost estimate for this year.
Look up your fixed cost and add it to your input cost. ( include land rent, land taxes, crop insurance and labor ) Make sure you add your labor at a realistic rate. ( no coffee shop hours )
Use a five years average yield for each crop to calculate the cost per bushel or tonne, and add 10% profit to arrive at the sale price of grain.
If the yield goes up, your profit is better or you can sell for less to compete in the marketplace.
If the yield goes down then the crop insurance plan should kick in to pay you the difference.
All countries will have a different input cost and this is where insurance and/or subsidies are activated.
Now you have to take a good look at your operation and determine if the land base, equipment, people to support and lifestyle is in the right ratio.
The price should be compared with other farmers in your area. This should tell you three things: Your grain prices are too high, too low and if they are not average, you better take another look at your operation.
The biggest problem will be to get farmers to cooperate and exchange price values.
Coffee shop BS prices are not reliable.
I can’t understand why some farmers say they can’t calculate their input cost early in the year and on the other hand say they have all these management skills. ( this is your formula ( !-&%*$@#? )
Charliep: your last comments are excellent and people should read them more than once, because all the marketing options are there for next year sales.
This is one way to establish a reasonable price for a bushel of grain. Farmers have a tendency to throw everything in one pile, and then try to dig out solutions for their problems that are not in that mess.
Start by listing your last years input costs for: fertilizer, seed, chemicals, fuel and bank loan charges ( if you need a loan for operating )also check your suppliers for this years prices for the same products. Now use your farmer management skills to come up with a pretty reasonable cost estimate for this year.
Look up your fixed cost and add it to your input cost. ( include land rent, land taxes, crop insurance and labor ) Make sure you add your labor at a realistic rate. ( no coffee shop hours )
Use a five years average yield for each crop to calculate the cost per bushel or tonne, and add 10% profit to arrive at the sale price of grain.
If the yield goes up, your profit is better or you can sell for less to compete in the marketplace.
If the yield goes down then the crop insurance plan should kick in to pay you the difference.
All countries will have a different input cost and this is where insurance and/or subsidies are activated.
Now you have to take a good look at your operation and determine if the land base, equipment, people to support and lifestyle is in the right ratio.
The price should be compared with other farmers in your area. This should tell you three things: Your grain prices are too high, too low and if they are not average, you better take another look at your operation.
The biggest problem will be to get farmers to cooperate and exchange price values.
Coffee shop BS prices are not reliable.
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