COP

[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)

[vvalk]

I here this all the time people thinking their cOP are as low as free wheat says. If that is true why are they not taking over. There is no way I can compete with someone who's costs are $180. You would have to be the worst marketer in the world to have equal margins with other farmers. I do use new equipment and pay normal rents and on avg with all in I would be around $325-$350 an acres. Canola. $66 seed and chem. $70 rent $60-$70 fert. $15 fungicide. Crop ins with hail is close is easily $30. Really labor, equip, depreciation
Fuel and oil parts etc is $75 and fore more like $100. Heck even income tax is running close to $50 an acre. $180 I'm sorry freewheat is too low. Not sure on acres but lets say on two sections of land your all in costs are $230000?

[vvalk]

On iPhone, so sorry for misspelling and grammar. Should have edited before I sent

[vvalk]

Even if you own the land outright you pay yourself rent. Still a cost

[freewheat]

I am not taking over, because it simply does not interest me to be the biggest. Material wealth is not my goal. A good living is. My seed and fertilizer costs are similar to yours. I do not put on hail insurance, we are not a hail area. I do use crop insurance, but have low premiums, because I have rarely made a claim, other than too wet to seed. Fungicide is rare. I use it sparingly, and as needed, not as a matter of course, because of the way I farm. And I grow canola on only 30% of my acres MAX. Crops like canary seed, peas, oats. They are MUCH cheaper to grow, and they round out my rotation. Surely we do not use our canola costs across all acres, even if other crops are much more economical to grow??? Or do we all just grow canola???

Canary as an example:

Seed-6
Fert-40
Chem-20

Peas:

Seed: 20
Fert: 12
Chem: 21

My fuel is 12

Oil/grease is 50 cents

Parts are 8

I have never heard of paying myself rent on owned land. My wife who does the books is unsure how exactly that is a cost???

In that, we can agree to disagree. Some of us use costs others do not.

I guess we should all be on the same page in what basic costs are. Some pay themselves labor, some pay themselves rent, on top of the mortgage I guess???

[freewheat]

BTW, I find it kind of amusing some are saying my costs are too low. I say theirs are too high in some areas, which is my point in the first place.

Do you pay yourself bin rent, combine rent, swather rent, air drill custom seeding costs, tractor rental rates too, because you really could be using them for custom work or renting them out, so that should come off too?

Half ton mileage, a portion of the wifes' vehicle mileage?? The kids bycyle tires? I mean, really, where do the costs, opportunity and otherwise, end and begin?

We need to be on the same page. For my part, I am sorry I do not seem to be, even remotely.

[freewheat]

Regarding margins: My margins are HOW I can compete with less acres. While most others run here and there to get more acres to pay for their Iron addiction, I diversify, think of ways to cut costs. Ways to make a bit of money in non-traditional ways.