What's the right debt load per acre

[farmaholic]

freewheat, when the Fjs of the farming world get to that stage, the tolerance for the bullshit gets extremely thin. Wanting to risk capital gets old. No longer blinded by ambition but jaded by a lifetime of some good and mostly questionably bad experiences. Realizing I don't need to do this...

[theplowboy]

when land prices are going up, low interest rates and decent grain prices I think you can be a little more aggressive and have a higher amount of debt.

we are pulling in the horns so to speak and trying to pay down some debt right now for a bit of leaner times ahead.

never a bad think to figure out how to lower your cost of production per bushel and per acre, interest payments can be a big expense on highly leveraged expensive land and as interest rates start to move higher.

[sawfly]

a lot would depend on where you started.
how old you are. how busy are you now. how busy do you want to be. succession plans etc.

i have been tackling the the debt thing . pretty hard.
we had some good years to do it.
no L.O.C minimal machinery loans.

i just wonder about the wisdom of it.
as cheap as money is and inflation.
and wearing yourself out fixing junk.

on the other hand as fast as money
flows out just to operate, fuel , fert. chem.seed,accounting,

what would seem like a good cushion 20 yr.s ago. could vanish in a year now.

[Partners]

The farmers who "Owe" the most have the nicest toys or machinery..After all you only live once..

[ALLFARMER]

Neighbour bought a new Borgault drill a few years back. Financed it over 10yrs. Since it is super accurate metering canola over older drill he figures thd savings on canola seed is more than enough to make the payments on the drill.

When I started farming in 96 I had $400 and $84,000 in dirt debt. No machinery, no inputs, didn't even own a farm dog. I had a paid for pickup truck and a computer and a full time job. 17 yrs later 2mill outfit.

Business is about passion, people without it...have no business being in business.

[tweety]

Farming, best job on the planet.

[farmaholic]

Jeopardy Question:

Answer: Starting farming from scratch cannot be done without this.

What is the "full time job"?

Allfarmer, I think you'd better give more credit where credit it due.

Question #2

Answer: this is also helpful when starting farming
from scratch.

What is "timing"

But good one you, not taking anything away from you. Also sounds like you knew when to fold em!!! You took a risk and it paid off!!!

[blackpowder]

Can't honestly answer this one. Every operation different. I've never fit into the "normal or accepted" myself.

[gtgconsult]

Based on what I have seen, here are a couple of benchmarks.
Interest is below 10% of Revenue
Debt service above 20% of revenue gets iffy.
GG