COP

[ado089]

JD, I don't really think my dad wanted me to farm. I got kicked off the farm for 5 years after university "to make sure farming was what I wanted to do". I saved up and at the end of year 5 I informed my dad I had bought seven quarters and rented 10 more. Since then we've been operating separate operations but sharing labour and machinery. The trouble is the only land I could afford was 65 miles and two soil zones away. He farms some of the best black soil in the NW and I farm some of the worst brown soil on the planet. At the end of the day we have more or less the same fixed costs but my variable costs are much higher to grow less crop.

[freewheat]

Richard, 180 is what I need to survive to the next year. We are a funny farm. We are frugal. We grow food for ourselves. My wife shops smartly. We "make" a lot of money by being this way. We do not buy toys. We do not buy high priced land. We do not rent high priced land. My cash costs are about 110 an acre. Rent spread over acres is less than 15. Land payments spread over acres is about 16. Iron payments are about 5. Just a few examples...

So when bad times come, we buckle up and live cheap because we know how. This is more my point than a number. All I know, is if I needed 300 bucks, I would be long ago broke with the weather we have had... So we adapted to poor production levels. And we try our best not to whine and complain about that which we can not
control. Except for this foresaken weather!

[Daylate]

$180 variable (disappears into dirt)
$110 fixed (disappears into thin air)

[cottonpicken]

A friend told me this story of a brainiac ag guy that had travelled the world studying ag his whole life,they put the question to him whats one thing you can say about it all(or something to the effect) his response was "you can never pay to little for poor land".

Makes alot of sence when you think about it.

[fjlip]

Or too much for great land with a climate for producing, like the Midwest are, Ontario, BC, etc.
The Ukraine has it all except you can be shot at, not good for land values.

[fjlip]

Richard your living cost are not in the COP of the crop but need profit to live.
If COP is not covered living costs have to come out of fixed, do not show up on expense sheet.

[Hamloc]

Freewheat I certainly admire your careful spending but I am not sure your seeing all the costs. I did a quick calculation of roughly what the total value of my equipment is and it is not fancy equipment. It is roughly 750000 dollars. If this equipment was completely turned over in 10 years simple calculation would be 75000 a year. I farm roughly 2000 acres that is 37.50 per acre in my mind this is a real cost. As far as land you own it is not free you at least have to put in what you could rent it out for in our area that is anywhere fron 60 to 75. Lets use 60. Now there is crop insurance I spend 15 and machinery repairs prob 16 but more likely 20. And fuel at 20. Now that is 152.5 per acre and I havent bought seed and fertilizer and spray. Probably lots will disagree with me but I think I am realistic and as far as machinery it probably gets turned over quicker than once every ten years so the cost is higher.

[freewheat]

I use 15 to 40 year old machinery. Most does not get turned over at all. I mean I do not need or desire a new 100 hp tractor when my 38 year old one does fine. If it does, it gets traded for something else, maybe at a cost of 20 000 in the case of a tractor or combine. My entire machinery line-up is worth less than 200 000 bucks.

Sure I could use opportunity cost, but land here rents for 30 bucks generally.

We all look at stuff differently, that is why the numbers mean less than the fact we are not all the same.

My crop insurance is around 9 bucks.

[freewheat]

BTW, you are saying your machinery after ten years is worth ZERO??? My 1680 I just got rid of, that I had for 5 years, cost me 800 dollars a year in capital outlay. My 2388 I just got has been highly depreciated already, and I am confident when I trade it in say 5 years, It will be similar to the 1680 in capital outlay. I bought a 4640 in 1993. It is probably worth almost exactly what it was worth then, today.

Same with my 9270 tractor. In fact, from what I see, it is worth more now than it was 5 years ago.

I dunno, how do you figure costs on an item that retains its value? I know what to do with new machinery that loses 80% of its value rapidly, but what about stuff that maintains or even increases its value???

[Daylate]

$180 variable (disappears into dirt)
$110 fixed (disappears into thin air)

[freewheat]

Daylate. I know why you call yourself Daylate. Cuz yer posts show up a day late!!!! lol!

[Daylate]

$180 variable (disappears into dirt)
$110 fixed (disappears into thin air)