Friday Crop report on a Thursday week three September.

[fcr]

Yes you are correct,its the net that really matters.The 15 here and 20 there that the retailers try to sell you could be the only profit this year.

[furrowtickler]

Last few posts are very correct and troubling at the same time cause most of us in same boat

[wrongway]

Easy figuring $1M revenue
with a gross margin of $500k and a net profit.of $100k.. a %10 drop in revenues wipes.out profit which is used for capital replacement or.expansion. any further drops.to revenue is a loss that needs to be covered by equity. Our farm programs only kick in at a %30 drop in gross.margins. which means huge hits to equity year after year till things turn around. Certainly not sustainable with the current environment we're experiencing.
Enjoy the decline!

[furrowtickler]

Easy figuring $1M revenue
with a gross margin of $500k and a net profit.of $100k.. a %10 drop in revenues wipes.out profit which is used for capital replacement or.expansion. any further drops.to revenue is a loss that needs to be covered by equity. Our farm programs only kick in at a %30 drop in gross.margins. which means huge hits to equity year after year till things turn around. Certainly not sustainable with the current environment we're experiencing.
Enjoy the decline!

Unfortunately you hit the nail on the head there

[SmallTimeOperator]

Or how about this. When I started farming rent was 1/3 crop share to the Landlord (some production risk to the landlord).

Now, $120 rent at $6 wheat is 20 bushels. At six tenths of rain from June 20 to August 10, that will be half the crop or even 75% or 100% in some areas of the field depending how burnt out the field is from drought/heat. Landlord has zero risk.

Land rent and land prices are out of control, and a reckoning is near for many.

When you make money and have big acres, you make big money. When you lose money and have big acres, you lose big money.

Enjoy.

[furrowtickler]

Good point , and yes a reckoning is already happening in some areas , but farmers make their own beds .
perspective , at 1/3 crop share your losing money now before you start seeding 90% of the time
and absolutely big cash rents have landlords laughing. Look at split crop share / cash , reduce risk on both ends if possible
nice thing about being an independent farmer , you don’t have to do either
Make you own deals , don’t be bothered by others .

We have walked on high rents and walked on land we farmed that Monnette came in and bought for 30% higher than any bid
we refuse the make others all our profit, life is too short too work hard for free .
each to their own , some will make it , some aren’t, it what it is . Just look after your own well being

[blackpowder]

I am in a fairly stable crop area.
Every study I've done has crop share as more costly over the long term.
Demand has outpaced supply 3 out of 4 decades.

Some will always need to reduce a margin to maintain a scale, until they can't...
Good luck, and if you're young, never say never.

[Grain Farmer]

This yr crop share on shitty prices, not much return for land lords.
not much profit on land that is owned either.

[furrowtickler]

This yr crop share on shitty prices, not much return for land lords.
not much profit on land that is owned either.

Ya depending on yields