Anyone ever lived or worked on very large grain farm?

[tncattle]

I was talking with a guy yesterday that owns a large grain farm in North Dakota and he was telling about there 550 HP tractors and huge equipment they have--fascinating--at least it was too me. He wasn't overly friendly so I didn't ask but I was curious to what kind of $ these large grain farms bring in? They seem to have such expensive equipment and all. Just curious.

 

[I luv herfrds]

How "large" are you talking?
Depends upon if they own it or the bank owns it.
We know guys who own those great big Cat crawlers and farm and ranch a large amount of land and they are mortaged to their eyebrows.

No I will not tell you how much money we get from our wheat and barley crop. That would be like me asking how much you got on all your calves.
touchy subject.

 

[hillsdown]

As far as cost you are looking at $350 000.00 to start minimum..

Saw one in the paper yesterday 350 HP 4000 hours on sale for $365 000.00 :???: I wonder if it had a full bath and kitchen as we would have to live in it as well.. ;-)

As far as what they bring in they had better be doing a lot of custom work 365 days a year to make the cost of that machinery work..

Hubbies best friend has a custom chopping business and his machinery is huge and expensive but he works all over Canada and the States and does very well.

 

[I luv herfrds]

Check out the price of a new John Deere combine. They just came out with one with a 40 foot header on it. The price tag will blow your mind. :shock: :shock:

 

[Jogeephus]

My cousin raises grain in Nebraska and she has some huge equipment. Unlike our area, she doesn't have to buy a lot of different types of equipment but what she does buy is extremely large. Don't know how much money she makes but the bank has not kicked her off the farm yet.

 

[grannysoo]

I was talking with a guy yesterday that owns a large grain farm in North Dakota and he was telling about there 550 HP tractors and huge equipment they have--fascinating--at least it was too me. He wasn't overly friendly so I didn't ask but I was curious to what kind of $ these large grain farms bring in? They seem to have such expensive equipment and all. Just curious.

Their income is normally very large. Their out-go is normally about the same as the income with hopefully a little left over after all the debt is serviced.

 

[Brandonm22]

I don't know if this is a good deal or not; but a late model used 530 horsepower tractor here is priced at $247,000

http://www.machinefinder.com/ww/en-US/machine/893486

This late model combine can be had for $225,000

http://www.machinefinder.com/ww/en-US/machine/947112

You still need a big disk harrow, planter, sprayer, header, etc.

 

[SRBeef]

Folks in ND and other western prairie farming areas need those large tractors mostly for growing wheat. Wheat is often a 40 bu/a yield crop in those areas. With wheat selling in the $6/bu range, the GROSS income on an acre of wheat, before any costs or other expenses, is $240./acre. Compare this to corn which is selling for about $4/bu so a say 175 bu/a midwest yield gives you a gross income of $700/a, again before any costs or expenses (which also tend to be much higher than in ND wheat).

So folks in wheat areas need to farm a lot of acres. Wheat farmers usually have a large tractor because the wide air seeders used in that area to cover a lot of acres require a lot of hp.

In the end however expenses seem to come up almost to the level of gross income. Seed, chemicals and especially P & K fertilizer (controlled by just a few sources) seem to rise magically with a farmers gross income....

Even though they are driving big tractors in that area there is often not a lot of net income left of that gross...

Many folks farming in the great plains are asset rich but cash poor. Unfortunately the only way to realize any gain is when you die and your land gets sold to a conglomerate....

There are folks doing well but in that area one bad year (drought, flood, frost, heat) can do you in. I would be careful not to be quick to judge folks by the tractor they use.

FWIW. Jim

 

[showing71]

Check out the price of a new John Deere combine. They just came out with one with a 40 foot header on it. The price tag will blow your mind. :shock: :shock:

My father-in-law to be just bought the biggest JD combine they have with the biggest header they have. I about fainted.

 

[EAT BEEF]

I have a friend that has 500+ acres of row crops,120 acres of alfalfa,feeds about 1500 lambs and has 30 or so cows.He does it all with a Oliver 2050,two 4020 deeres and a IH 1460 combine.I don't think he has much over $100,000 in all his equipment.I think he could buy newer stuff but he's trying to pay off his farms and knows how to work on junk.Not much will get you in trouble faster than buying a bunch of new equipment.

 

[SRBeef]

I have a friend that has 500+ acres of row crops,120 acres of alfalfa,feeds about 1500 lambs and has 30 or so cows.He does it all with a Oliver 2050,two 4020 deeres and a IH 1460 combine.I don't think he has much over $100,000 in all his equipment.I think he could buy newer stuff but he's trying to pay off his farms and knows how to work on junk.Not much will get you in trouble faster than buying a bunch of new equipment.

Folks in the prairie states often describe their farms in "sections" (640 a). As admirable as your friend is, he is doing it in a different environment. You just can't farm thousands of acres of wheat ground (as in the original poster's question) with a couple 4020's and a 1460 combine!

Farm equipment is like purchasing a machine tool for a factory: they are tools. It is not the size nor the cost of the tool, what is important is what does it make for you what is the return on the investment???

Some folks with outside cash may buy big equipment to be the first on their block, etc but for most in agriculture as a business, (rather than a hobby or a tax deduction) the return on the investment is what really counts. Jim

 

[EAT BEEF]

I wasn't thinking they could farm several thousand acres of wheat with a 4020,I just think you could do it with a tractor that didn't cost $300,000

 

[Jogeephus]

My cousin sold all her equipment and went big. She explained to me it was cheaper to do this than to have several tractors, several harrows, several drills etc. Now she relies on just a few pieces of equipment. Less maintenance and upkeep. It makes sense in her situation to do this. Only problem I see with it is that the equipment better be good and reliable cause there is no backup and downtime will have a tremendous cost. I think its like everything else. No one system will work for all you just gotta find what works for you and go with it. Some folks could be given a million dollars worth of new equipment and still go broke while others could make a profit with junk. Profit is not totally dependant on the size or newness of equipment but it sure helps.

 

[randiliana]

I live in the middle of BIG country. Many of the farmers in the area are farming 5000 acres and more. The big guys will often have 1 newer big combine, tractor, airseeder, sprayer, and often things like rollers, harrows and such as well. The really big guys will usually have 2 combines, tractors and airseeders. And they will often have 2-3 smaller 2WD tractors, a semi and grain trailer, various big grain augers, swathers and so on.

New and Newer combines and tractors come in around $300 000, the airseeders are up to $300 000 and so are the high clearance sprayers, takes about 10 years to drop the price in half if you are buying used equipment, and by then you are running out of warranty. For the price it costs to fix one of these things if they have a major break down, warranty is a selling point!

We're talking 60 - 80 foot air seeders, 30-40 foot headers and 400+ HP tractors. And wheat in this country isn't worth $6/bushell, usually it is about 1/2 of that.

By the time payments are made there is little left to do anything else with.....

 

[mnmtranching]

Just to the South of me and West are center pivot irrigation systems. Raising corn, edible beans and potatoes. The machinery is a big as it gets. Tractors with tracks are the norm. They move into a quarter section pivot in early morning and have it worked and planted by noon. Some operators will do 20 or more pivots. One pivot will produce about $100,000 dollars worth of corn at $4. per bushel. Big money is in the potatoes and beans. Problem is, beans and potatoes are so hard on the light soil corn is a must every 3rd year. The corn is harvested and the big disks come right behind the combine.

 

[novaman]

I think most of you are missing one key thing. If you run 100 acres and make X amount of profit, you can look at it as a percentage, say 3% (no idea, just pulling a number). Now if you expand out to 1000 acres you may need to shuffle a few things but should be capable of reaching that same profit level. So you just added 10 times the acres at 3% profit. Instead of making $300 profit (pulling numbers again) you now have $3000. This is oversimplified of course but generally works out in this manner. The other things most of you are overlooking when it comes to large equipment is taxes. There are many farmers in this area that have over 10,000 acres. They obviously pull in a nice sum of money on that number of acres. Problem is the government wants to take it all back through income taxes. The way to get around that is to turn around and upgrade equipment. So there is very little profit but the assets are constantly being upgraded. As was said many farmers have huge amounts of assets but very little cash. As far as the original question of the money these farms bring in, gross income is easily in the millions. I know many farmers that lost hundreds of thousands of dollars when the price of wheat hiked in '07.

 

[1982vett]

I think most of you are missing one key thing. If you run 100 acres and make X amount of profit, you can look at it as a percentage, say 3% (no idea, just pulling a number). Now if you expand out to 1000 acres you may need to shuffle a few things but should be capable of reaching that same profit level. So you just added 10 times the acres at 3% profit. Instead of making $300 profit (pulling numbers again) you now have $3000. This is oversimplified of course but generally works out in this manner. The other things most of you are overlooking when it comes to large equipment is taxes. There are many farmers in this area that have over 10,000 acres. They obviously pull in a nice sum of money on that number of acres. Problem is the government wants to take it all back through income taxes. The way to get around that is to turn around and upgrade equipment. So there is very little profit but the assets are constantly being upgraded. As was said many farmers have huge amounts of assets but very little cash. As far as the original question of the money these farms bring in, gross income is easily in the millions. I know many farmers that lost hundreds of thousands of dollars when the price of wheat hiked in '07.

Two things that one can never escape. The grim reaper and the tax man. They are both going to get you some day.

 

[I luv herfrds]

novaman's post reminded me of my mother in laws favorite saying when she was bugged by a charity. She was told that because we ranch and farm we are rich, she told them that she would make a payment with a bucket of dirt. :lol2: :lol2:
That was her response every time someone made the "rich" comment. I picked it up and continue with it.

 

[mnmtranching]

Sorry got to say it. :frowns: Farm service is a factor. :cowboy:

 

[TexasBred]

Nova..that holstein cow as your avitar should tell you that more cows doesn't always mean more profit nor does more acreage farmed mean more profits. Only more hard work and more headaches and worry. Soemtimes it pays to downsize rather than get larger. Never judge the profitability of a place by the amount of equipment you see nor the acres they farm. For the investment there is probably a smaller percentage return on your money farming than any other business I can think of. Millions of dollars of gross sales may not return .25% profit.