Losing money farming is not unusual but when you've really never lost at this game before, it can wake you up. It woke me up.
What I did wrong is I planted one farm to corn and never priced it. At planting, I never dreamed corn would go to $3 but it did. I was distracted for sure but that's no excuse. Either you are farming for profit or you are not. I farm for profit but I let my guard down.
I got complacent, money was fairly easy to make farming the past ten years, at least for me. Everything I spent returned a dividend. This year it did not.
We made our most money on soft red winter wheat this year and you know how poor that market has been. I have a lot of interest in our excellent non GMO soybean seed so it may make up some of the difference. Our loss is in corn and even if I had priced it early, I would not quite made back what we invested in it.
Even if I hadn't planted corn or gambled and sold my production before planting, I would not have broken even. Inputs were just too high priced this year for the returns. This is with really good yields, too.
It is impossible to show a profit for corn for 2015 also. I wonder how much that will affected planted acres. It really doesn't matter what you plant next year, nothing is very promising.
I hope this all turns around for the young guys because we need them.
No one can work for a loss very long, though.
Ed
It would have been a good year to raise some chickens with your own corn to get more value out of it! I didn't know it went as low as $3, but that's why I'll never grow crops for the commodity market, not much control on intrant prices or on commodity prices, it's in trading and processing that the biggest profit lays, not farming, especially when everyone happens to have planted the same crops on a given year. You need to be a BTO and to have a great accountant to make it work at these prices...
ReplyDeleteI know they say working the land is a privilege, but I hope you'll get paid for enjoying this privilege in 2014, not have to pay for it like in 2013!
I never fell in love with chicken farming. I don't think my mother did either but she made a good living from her 500 chickens. She is the queen chicken farmer I know of. I hated scooping her poop.
ReplyDeleteHere is some wise words from my friend Bill
Loosing money farming one or two years in succession is not all that bad a situation as long you have a few good years before the bad years, And we do not spend during the good years as if tat is the new way.
A farmer down the road, with mostly rented land, had a real good year. So he put in a new kitchen for the family. Bought new equipment, and then went to the local bank for operating money.
Bank turned down the loan for a lack of character.
Fellow was perplexed as he had all the new collateral.
Banker mentioned he had enough money from the good year to self finance the next years crop with a little extra left over.
Lack of character.
Another was turned down for an operating loan because he had bought a nice new Pick Up with all the whistles and bells.
Same banker mentioned that an operating loan was not designed to make GMAC payments.
Both farmers made some adjustments and are doing well 20 to 30 years later.
In the past there were a number of older farmers that ate beans and corn bread when money was tight.
On NAT it is interesting to read so many making plans to keep from paying income taxes. It is not unusual for farmers Here NOT HAVING TO pay income taxes. Fact is TEXAS were not a farmer friendly State I would be working for wages in town.
Now in the 1880's my Great Grandfather was raising wheat. Then wheat was bringing $2 a bu. He was farming with Oxen and thrashed the wheat by hand.
Then the Western Homestead Land came into production & the wheat was bring $0.25 a Bu. They shifted to dairy and did ok. Fact half his boys were in to dairy business and the youngest daughter married into a dairy family.
Now most of that dairy land is all urban.
Realistically if I had not spent most of my adult life flying around inside a B-52 I would be pumping gasoline at the local air port.
Who knows what life will bring.
Bill Wilson