$75 to $125. An acre rent, explain how you make a profit in Saskatchewan!

[tizhot]

Hey guys new to posting on this site. Read for a longtime. Anyway. The rents are not attainable in my view. On the perfect year sure but average it out and you better have other land tgoi take care of it. Don't know how the guys do it. Guess thats what going from a good family farm years ago to what was thought fame and fortune can do. Last year farmed -10k ac all rented for around $110 and next spring shes a farm auction. Too bad really. Get rich quick schemes are few and far in between. Sorry my first post was preaching on someones defeat.

[freewheat]

Welcome tizhot!

I see you are in the real world. lol But
one thing I do see, and others often
theorize on, is that having other land
to subsidize more land is a strange
concept. Why not just do better on the
smaller amount of land?

Another thing, is why do most of us
always talk like physical expansion,
rather than tightening our belts and
doing better on what WE ALREADY HAVE, is
the cats meow. Every farm paper is about
expanding your dang farm. Why? Because
we can? Because money is everything?
Because "things and stuff, and new
machinery is impressive"?

I really want to know three things: How
does quarter million a quarter pencil
out?

How does 100 dollar rent pencil out?

And third, How does a 400 000 dollar
combine come out as a good investment?

I just don't get it either...These guys
are absolutely nuts, IMO.

[wd9]

If $50 rent is acceptable, you think
adding 2 to 3 bushels of canola isn't
outrageous either. At least if i rented
out land, i'd look at it that way.

Its only a couple bushels.

[freewheat]

wd, I have some of these landlord types,
lol.

[tizhot]

I will be the first to say that i am not opposed to expansion. In fact I have been looking at expanding more due to "my" situation. But there comes a point that everyone can out grow their means. We have been lucky in this area that the big boys are not here. All around but not here. Yes it will come but for now they have left us alone. Mainly due to the fact that there has not been any land for sale. Small farms make up our area still and for that I am gratefull. That is why I am looking at increasing our landbase.

For our situation $400k combines don't make sense. We don't have crap but new big ticket items are not in our chequebook.

[hobbyfrmr]

Free wheat,

Take on more land to bring down fixed costs of
new machinery. Then you can operate new
equipment with warrantee. Also to maximize
efficiency. A really good high clearance sprayer
can cover 1200 acres a day. Blah blah blah.
I half understand it, it kind of makes sense, but I
literally don't buy into it. Why? Not enough money.
Failure to thrive!! The business world expects
growth. Grow or die! This philosophy cannot be
exactly replicated in ag, like sf3 suggests, Mother
Nature dictates.
John Deere, CNH, landlords and our input
suppliers don't care if farmers don't get a crop.
They only care when they dont get paid for the
product we contractually agreed to buy. We agree
to buy, we sign our names and we pay. If we
don't, another farmer will. The same marketing
skills are applied to real people, gm, ford, Walmart
, landlords don't care if the working man gets laid
off. The risk lies in how much debt we can
tolerate and plan for when it goes right, or wrong.

[charliep]

Lots of work has been done on the size versus profitability issue. Conclusion of most is size doesn't matter. Its what you do with what you have that does.

MNP studies done for ARD highlighted that operating costs/acre were very similar between different farms of all sizes. The variation was in fixed investments in land and machinery was the difference between farm operations looking at efficiency from a return on investment perspective.

[charliep]

A quote from emalt that somewhat relates to this thread.

Quote - "Destiny is not a matter of chance, but of choice. Not something to wish for, but to attain."
William Jennings Bryan

An interesting discussion about how a farm business positions itself for the future and its goals/strategic direction.

[oneoff]

Be careful how badly you beat up landlords.

Maybe a good way of looking at what you want to pay as a tenant would be to be forthcoming in exactly what YOU would be satisfied to rent your landbase to expanding farmers.

If those two figures aren't nearly the same; then all that differs is somone's level of selfishness.

[charliep]

What is interesting to me is there are not more hybrid rental agreements that are combination of cash/crop share. Some are based on a crop yield or combination of crop yields that can be based on crop insurance coverage levels and an agreed way of determining price in the fall.

The big thing is to come up with a process that is fair for both the landlord/renter and allows some sharing of risk.