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Corn/Soybean Farmers

Started by DouginUtah, September 16, 2005, 05:07:57 PM

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DouginUtah

Any farmers here who care to explain why you grow corn or soybeans?

I have been doing some research and have come up with these numbers. (Illinois 2003)

Corn: Average yield is 168 bushels per acre.
          Average cost to produce a bushel is $2.42.
          Commodities market price for December Corn is 206.25 (cents per bushel)=$2.06
That is a loss of 36¢ per bushel.  >:(

Soybeans: Average yield is 48 bushels per acre.
          Average cost to produce a bushel is $6.94.
          Commodities market price for November Corn is 571.25 (cents per bushel)=$5.71
That is a loss of $1.23 per bushel.  >:(

These are USDA and U of Illinois numbers.


Obviously these are not valid numbers. I've verified the yield numbers on other sites, the cost of production cannot be verified so that is suspect. The commodites market number are what they are.

Is there something else am I overlooking? Do you make it up with volume?  ;D

-Doug
-Doug
When you hang around with good people, good things happen. -Darrell Waltrip

There is no need to say 'unleaded regular gas'. It's all unleaded. Just say 'regular gas'. It's not the 70s anymore. (At least that's what my wife tells me.)

---

Ron Wenrich

The production costs are probably right.  But, the way they figure it out is operating costs and overhead costs.  Operating costs must be paid, but, some of the overhead costs are not necessarilly out of pocket expenses.

For example, you don't go out and buy new land or new equipment every year just to have a crop.  In many instances, land has been passed down from generation to generation and there is no purchase price involved.  Not all farmers have crop insurance.  Some might not use all the insecticide, etc.

That's about all I can figure out.
Never under estimate the power of stupid people in large groups.

Tom

It's probably the years with the low yields that saves their hides.  The more they grow the higher the maintenance on the equipment and the more labor envolved.  If they have a really good year they might go out of business.   ;D

leweee

Farmen & Loggen is similar. Ifen you wants to make a million dollars at either. ... starts with 2 million :o :D :)
just another beaver with a chainsaw &  it's never so bad that it couldn't get worse.

farmerdoug

You guys forgot the main source of income on the two crops-Farm Bill.  The profit for farming for most farmers is the government checks, it is sad to say. >:(  Why do you think they plant more every year and fight over the farmland that is available. ???

Farmerdoug
Doug
Truck Farmer/Greenhouse grower
2001 LT40HDD42 Super with Command Control and AccuSet, 42 hp Kubota diesel
Fargo, MI

Bro. Noble

Boy Howdy,  Doug,

I used to work with that kind of stuff as a Farm Mgnt. Specialist with the Univ. of Mo.  You gotta understand how those Ivory tower economists think.  They figure everyone is using new equipment and paying themselves the same level of salary that they recieve,  for example.

I worked with a recordkeeping program and saw the actual expenses and reciepts from many grain and livestock operations in Mo.  It was amazing how much they varied and often it wasn't the operator that did everything like the university reccomended that made the most income.

Also,  they are reporting averages that they came up with.  When working with averages,  it pays to remember that you can drown in a creek that averages only 6 inches deep ;)
milking and logging and sawing and milking

Kirk_Allen

Doug,
Land and Equipment are the two largest expenses that are put into the think tanks that THINK they know it all.  Our land has been in the family for 4 generations.  Thus, no land expense.  My Great Grandfather bought this 500 acres with the $500 he won in the Worlds Fair in Chicago with a prize sheep. 

When my grandfather was farming he bought new equipment and paying it off was TOP priority.  In 5 years he had it paid for and was debt free. 

Last year our corn yeild was just over 200 bushels an acre on corn and 45 bushels on beans.  Depending on when you sell your grain makes a big difference in what you make.  Some farmers HAVE to sell it to get another crop in the ground next year.  Others hold onto it and sell when its high. 

When my Grandfather died he had 7 years of grain in storage.  7 years?  I think there is a biblical reference to that but will have to do some more reading.  Anyway, he studied the WOLRD weather and became extreamly knowledgable about the WORLD grain market.   Knowing what is going on in all those countries that are buying our grain can tell you a lot about when to sell your grain. 

My dad has been renting out the farm on a 50/50 share and has NEVER lost money, even in a bad year.  This year may be the lowest profit year because of the drought but he will still make money. 


Now, for those government checks some folks want to mention. The program is part of a Federal Conservation Recovery Program that pay for land to be "Set Aside" or placed in CRP.  That land has to be planted with a certain cover crop and maintained.  The program is designed to increase habitat for wildlife such as quail, pheasant, turkey etc.  This program helps to increase overall revenues in many states from sports hunters.  A major portion of the funding for that program comes from within those activities through fees and hunting licenses etc. 

Is it free money to the farmer?  NO.  The cover crop has to be planted, which means the land has to be tilled and prepared, then seeded, then cut according to the schedule for enhanced habitat.  It comes out about even as far as profit goes, at least in our case.   So, put a corn or bean crop in the ground and make XX amount or put part of the land into CRP and enhance the wildlife and make XX amount. 

CRP is not something that you can just do if you want.  You have to apply and then depending on availabliity you might get to put a SMALL percentage of land into the program. 

Now, as far as subsidised programs for other types of farming, like dairy cattle etc, I have no clue.  I just know that corn and bean farming is NOT a subsidized operation. 

farmerdoug

Kirk,

I was not referring to the CRP.  I think that is a step in the right direction for farming and conservation.  I was referring to the LDP(loan defiecnity(sp) payments).  that is were the government makes up the difference in the prices for the main grain crops.

Farmerdoug
Doug
Truck Farmer/Greenhouse grower
2001 LT40HDD42 Super with Command Control and AccuSet, 42 hp Kubota diesel
Fargo, MI

SwampDonkey

I know the local farmer didn't make much on his corn last year. He cut it in the middle of November. Of course it was all diseased, then dumped it all out in the field in January. They grow soyabeans here and harvest them late too, there is a local dryer. I don't think they make much. As far as I and many others can tell, they are only play farming. The land purchase didn't cost them much, since they leased it for $1/acre for three years and during that time they had a woods contractor cut over 400 acres of their woods they never paid for, but used to purchase the farm. This was all sanctioned by government.  ::)
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

HORSELOGGER

Corn and soybean farming is heavily subsidized Kirk, not sure how you can make that statement.There are direct payments based on "corn base" and indirect payments, like the no sales tax to farmers on farm equipment. Much of the ground here in the nw corner of Ill. is classified highly erodable, so lots of crp acres.It is nothing like what you describe where your at. Mostly huge weed patches owned by non resident Chicagoans that come here to hunt a few times a year.The conservation programs are screwed up because they cater to the wildlife and hunting crowd. The turkey and whitetail numbers here are incredible, and they are tough on the timber crop of the future as the mast and seedlings get hammered by them. Every january you will see the deer herding up on the hillsides in the evenings here and you can count 30, 50 even 60 or more in groups, and this after the generous hunting seasons are over..... On the subsidies... If all payments to farmers were eliminated, how many would still farm?
Heritage Horselogging & Lumber Co.
"Surgical removal of standing timber, Leaving a Heritage of timber for tommorow. "

floyd

one grows corn/soybeans because one lives in the corn/soybean desert & the govt pays well.

Now don't be calling this farm welfare cause these guys actually work.

Mind you, this is different from corporate welfare.



  But farming is a way of life.... so we have to save family farms.

  Course, no one saved family loggers. Guess logging isn't a way of life.

1 those Arsenio Hall things


 

beenthere

A frightening visit to the FSA site (Farm Services Agency) will get one all riled up. There is so much competition for this agency to 'give' money away to anyone and everyone they can think of, it isn't funny. 

I read where Illinois has the highest subsidy percentage, followed by Nebraska, Kansas, and Minnesota. Maybe Iowa was in there too.  But other than the relative differences, I didn't put too much stock in the numbers, as it was a sight of enviros trying to steer that subsidy money over to them, rather than let the farmers have it.

But I think some farmers who have stayed out of debt (like Kirks family's history) probably don't qualify for as much of the support as those who have not managed well, and get regular 'support'.      I recall a neighbor getting fighting mad that his other neighbor signed up once for some 'hay relief' dollars one year.  This guy was mad because that neighbor wasn't a 'regular' in the handouts, and shouldn't be dipping into their share of the money (the guy who was mad was a regular in the subsidy program, and he acted like that he had dibs on that money on an annual basis).
south central Wisconsin
It may be that my sole purpose in life is simply to serve as a warning to others

D._Frederick

Something know one has brought up is that a large number of the farmers have the wife working in town and they use this money to keep there head above water.

At Rufus, Oregon, they have an old timers show every year. The equipment dealers bring some of there B I G equipment to show. This year they had a Case IH combine, list price $380,000.  They (the farmer) sell there wheat for under $3.00 a bushel, how do they pay for this combine?

HORSELOGGER

Heritage Horselogging & Lumber Co.
"Surgical removal of standing timber, Leaving a Heritage of timber for tommorow. "

floyd

same way corn /soybean desert guys do , govt check.

Jason_WI

Most of the Farm Bill goes towards Food Stamps for the Welfair program. LDP payments are just part of the Farm Bill. My dad plants corn and soybeans to feed his moos. Even if it goes for feed he still gets a LDP check. Call it welfair if you want but is helps to pay the bills.

With fuel and fertilizer prices soaring many farmers will be in serious trouble. The first to go will be the ones that drive in new trucks and equipment every year. My dad drives around in his 77 Chevy half ton truck. The newest tractor on the farm is a 1983 Foad TW30. The combine he bought last winter cost him $10.5k for the Gleaner F2 with corn and bean heads. My dad did not get the farm handed to him for free. He payed his parents with interest for the farm. Borrowed money to buy more land and now has it all payed off.

This country runs on 2 things. 1 is cheap energy and 2 is cheap food. The goverment floods the markets with foreign dairy, grain, and cattle imports to keep the price low and then handouts LDP payments to keep there own farmers alive, doesn't make sence does it??

Jason
Norwood LM2000, 20HP Honda, 3 bed extentions. Norwood Edgemate edger. Gehl 4835SXT

Bro. Noble

If the govt.  would stay way away from agriculture,  it would suit me just fine.   They have price supports on dairy products,  but it is so low it rarly makes a difference.  They made some kind of trade agreement that was harmful to dairy farmers so they came up with a 'milk loss' program to make it up to the dairy producers.  So far this year we got $11  ::)

The dairy industry has pretty much given up on the govt. doing anything beneficial for dairymen.  We have our own program financed through milk check deductions.  It is used to create export markets,  promote milk products especially in schools,  and it also pays to retire some herds.  All financed by the dairy producers to help themselves.

Today I got a letter in the mail with a form to fill out to have contributions deducted from our milkcheck.  It would go to help the 300+ dairymen who were effected by the hurricane.

If you ever want to get me really pithed,  just suggest that dairymen are on the goverment dole ;)
milking and logging and sawing and milking

SwampDonkey

Most dairy imports I see here are some cheeses. But, in my opinion they can't compete with Canadian made cheeses. There are some ice cream products imported, but they again are hardly competing. They're just there for choice. In my province we have milk marketing boards with strict quotas. At every dairy farm the milk is tested by a delivery truck and if it's not up to specs the farmer has to pay for the whole truckload of contaminated milk. I think in Maine the government buys the surplus milk.

Jason, my father had to buy all his farmland too, plus take on my grandfather's debt for the family farm. He never got no free $500,000 new entrant subsidy nor $1/acre leases that the government gives to immigrated farmers. The immigrant farmer down the road basically got a free farm with all the subsidies, farmed it for 3 years (if that's what ya call it) and now doesn't even farm. He sold off all his farm equipment and rents the land and his wife started an immigration business with ACOA (government subsidy). Just sitten back milking the cash cow.  The general population wouldn't know this, nor would they care because it doesn't affect them directly. ::)
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Tom

QuoteThe general population wouldn't know this, nor would they care because it doesn't affect them directly.

It does, they have just become complacent.  They don't acknowledge where the money originates.  Perhaps many don't call attention to it for fear of losing their own "cash cow".

Kirk_Allen

Horselogger, I understand the tax free releif we get for farm related purchase but that is normal business.  I pay no tax on the Cost of Goods to manufacture our fire equipment because it is for resale.  

As far as any other subsidies, I can proudly say, WE DONT GET THEM.  I am not familiar with LDP payments and when I asked my Dad about them he said you have to be apply for them and he would never ask for a handout, so I guess there are some programs out there that would put money in our pocket but not something he has ever done.  

I understand totally the what the CRP program is doing in some areas of the state.  For us, since we are so remote, if thats possible in Illinois, it has helped immensly.  We are finally seeing LOTS of quail and pheasant in our area.  Had we not had CRP land I doubt we would have ever seen their return.  We dont have the Chicago problem here, other than ME ;D    But that dont count!  We simply came home.!   In other parts it has created a nightmare for farmers buecause it has become STRICTLY for hunting.  Those deer can wipe out a bunch of corn and there are no programs paying farmers for that, other than maybe being able to get Free landowner permits and nusience tags to take them out.


I guess since our family has never partaken in those handout programs I am really in the dark on who gets them and how but by staying out of debt and living within your means I belive anyone can survice in this world, including the small family farm.

We started selling eggs a few weeks ago.  WOW.  Had no idea so many people wanted farm fresh eggs.  We subsidise our feed bill from egg sales!  We now are eating FREE EGGS!  



SwampDonkey

Kirk your lucky the eggs return a profit to offset the feed. Up here the feed for a small chicken egg farm would put you under before it took off. It seems you have to go big. For the small guy buying small lots of feed is costlier than the big guy buying it by the trailor load. My uncle tried turkey a few years back and if ya factored in the cost of feed those turkeys were worth $10 a pound. :D :D
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Frickman

I've been trying to stay out of this one, but I just can't. I have to attend a pesticide applicator's class every winter to keep up my spray liscense here at the farm. It is conducted by our county agent and his sidekicks. Every year they try to get us independent farmers signed up to the government farm programs, and every year I say no thanks. The way it is set up here, as soon as you take one dollar from them, or even some technical advice, they get their foot in the door and soon have total control of your farm. Their cronies in the ag chemical and seed companies, and the big buyers of commodity products, try to push us into corn/bean rotations, no matter the economics for the farmer. The suppliers want an outlet for their goods and the buyers want cheap grain. The land grant universities, heavily influenced by the ag chemical companies, push this as well. We just run the farm like any business and try to produce what the market wants, not what some bureaucrat in Washington D.C. thinks we should. I could never figure out why the government would subsidize growing more of a crop than the market demands, and then buying the surplus to support the price.

As for the economics of corn and beans, I can't afford to grow them. I can buy ground feed delivered to my tank for less than I can grow it and haul to the mill to be ground. My acreage is more profitable growing hay and sweet corn than corn and beans.
If you're not broke down once in a while, you're not working hard enough

I'm not a hillbilly. I'm an "Appalachian American"

Retired  Conventional hand-felling logging operation with cable skidder and forwarder, Frick 01 handset sawmill

Pretend farmer when I have the time

Haytrader

Kirk,

The guy renting your land is probably getting the payment.
50/50 sounds like a good deal for the land owner.
Land is rented here on 1/3 2/3 with the owner getting the 1/3. (dryland wheat/milo)
Norm and Patty cash rent thier land (corn and beans) but I don't remember the figure.
Haytrader

HORSELOGGER

Thats what I was figuring too, Haytrader. I have a small field on my place I have cash rented out in the past, and the deal was that the farmer got the payment.
Heritage Horselogging & Lumber Co.
"Surgical removal of standing timber, Leaving a Heritage of timber for tommorow. "

DanG

Frickman, I'm wit you on dat!  I try to keep the gubmint as far away from my bidness as I can!
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

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