$78,000,000/67000ac

[cottonpicken]

At 5 percent thats like a 55 an acre interest cost expense

[farmaholic]

Its the incremental farm size that has to be justified with the cost of machinery and its capacity. Finding a qualified ass(not derogatory) to put in the seat is another issue.

Where are we headed? Some big operations that are supporting several family members need to be the size they are. I think we were able to buy some pretty decent iron with our acres.

I also beleive alot of bigger operators "can" have grain quality issues because of weathering and grain going out of condition because of pushing it in fall. Just saying..

[farmaholic]

Cotton, I did some math on the values being paid around here and you're right. 240k with 25% down @5% is 9k/155 acres is $58/ac interest only. Better be real solid and subsidze it with paid for dirt. Interesting times.... is this sustainable? Doesn't productive capacity mean anything?

[hobbyfrmr]

Lesm i went to one meeting about 12 years ago and when i left there I was really feeling down about how little i was investing on inputs and my machinery was all too small and inferior. Then there was the issue of how poorly we/I market my crops. I really felt inferior that day!
Some already coined the phrase here on Av , but more than ever we are the small ******* on the chessboard! I am ok with that.

[furrowtickler]

Farma - sustainability and productive value were throw out the window about 3 years ago.
It is strictly a place to park money for investors or a dick swinging contest between farmers in some cases - but no one realizes that Mother Nature is a lesbian and don't care about ones manhood .
I think it will sort itself out sooner than later - the last Kramer sale was off about .75 time assesment from a year ago

[Richard5]

The $1164 per acre debt is $750/acre too high I agree.

Somewhat deceiving as it includes all the equipment that was leased (which was almost all)

A point that I have brought up before. A lease is a debt and will always be a debt

[bucket]

I think they were under water on machinery leases.

350k after two years for a 700k seeding outfit can't work out to be in the money.

[furrowtickler]

Agreed bucket - no matter how many ac they are "supposed" to cover.

[cottonpicken]

What keeps me up at night is cost push inflation. This is not the proper reference to the definition but have no other term to use.

You can use quite a few industries experiencing this at the moment base metals,oil, whatever doesn't matter. Anyway you have got plummeting demand and price and costs are not moving so the only remedy is on the supply side but what does the average do?produce more and more making the problem worse and worse. A lot of that is standard Econ 101 except for the fact the macro is in no mans land.

Zero interest rate policy pulled forward demand and things that should have waited where given the green light. Purchasing is cheap cheap cheap but look at what that did,created false demand and spun out all sorts of false indicators for the market.

Its a Potemkin village.

So the question becomes what happens if the liquidity drys up and there are no exits left for anyone,if that happens you will see serious serious problems and then the printing will really start.

[sumdumguy]

I always wondered how these big operators could afford new equipment every year. Just thought they do that so they don't need to fix anything. Now I bet they do it to increase their debt load. Just like the government.

[bluefargo]

OK explain to me why why Pike, son and. CFO have been retained at double salary till August.
If I were owed money by these bozos I would be seething mad. I just don't understand the legalities at work here.

[crusher]

......and why is it that every farm in the Ritchie Spring Auction has nicer equipment than me? I'm not jealous, just sayin

I used to come in for lunch and get ready to bid. Not this year, I do't see the appeal of that big shiny stuff. Guess that's how I can spend a big part of the winter out of the country. Happy Easter!!!!