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CRP Conversion: cow-calf economics
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<blockquote data-quote="H and H" data-source="post: 1045128" data-attributes="member: 18837"><p>My folks have a quarter of CRP in NE Nebraska that is coming out this October. The property has been in our family for 6 generations, my brother and I each have a few cows, and would like to expand our operations. </p><p></p><p>Prior to the recent downturn in the corn market, a neighbor offered them $300/acre cash rent. Dryland corn around here yields ~150 bpa during an average year (last year during the drought, it was closer to 8 bpa). </p><p></p><p>There is the potential to irrigate this property (750 gpm at 225 ft). If it is developed, irrigated cash rent in the area is in $450 - $500/acre range. </p><p></p><p>Pasture rent in this area is anywhere from $225/pair for five months all the way to $400 plus.</p><p></p><p>There are a few things that are non-negotiable: </p><p>1) no family squabbles over the property - there were some hard feelings from my Grandma's siblings when Dad and Mom bought the property from Great Grandma (and they had to bid on it like everyone else). </p><p>2) they are not interested in developing the water rights, if I do it - it is on my dime, I own the water rights and still pay the dryland cash rent rate. </p><p>3) they will receive fair market dryland cash rent </p><p></p><p>Is it possible to MIG this property with, or without, irrigation and compete with the row crop cash rent? </p><p></p><p>The second option I have is to irrigate it, cash rent it out to the highest bidder, and invest the additional income into a different property (the local NRD has started to limit irrigation development, there may be a time in the not so distant future when we will no longer be able to put a pivot up).</p><p></p><p>The last option, do nothing and avoid any potential hard feelings that may arise.</p><p></p><p>Sorry for the rambling, and thanks in advance for any advice you may have.</p></blockquote><p></p>
[QUOTE="H and H, post: 1045128, member: 18837"] My folks have a quarter of CRP in NE Nebraska that is coming out this October. The property has been in our family for 6 generations, my brother and I each have a few cows, and would like to expand our operations. Prior to the recent downturn in the corn market, a neighbor offered them $300/acre cash rent. Dryland corn around here yields ~150 bpa during an average year (last year during the drought, it was closer to 8 bpa). There is the potential to irrigate this property (750 gpm at 225 ft). If it is developed, irrigated cash rent in the area is in $450 - $500/acre range. Pasture rent in this area is anywhere from $225/pair for five months all the way to $400 plus. There are a few things that are non-negotiable: 1) no family squabbles over the property - there were some hard feelings from my Grandma's siblings when Dad and Mom bought the property from Great Grandma (and they had to bid on it like everyone else). 2) they are not interested in developing the water rights, if I do it - it is on my dime, I own the water rights and still pay the dryland cash rent rate. 3) they will receive fair market dryland cash rent Is it possible to MIG this property with, or without, irrigation and compete with the row crop cash rent? The second option I have is to irrigate it, cash rent it out to the highest bidder, and invest the additional income into a different property (the local NRD has started to limit irrigation development, there may be a time in the not so distant future when we will no longer be able to put a pivot up). The last option, do nothing and avoid any potential hard feelings that may arise. Sorry for the rambling, and thanks in advance for any advice you may have. [/QUOTE]
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