Cull and sell high and buy low price

[farmerjan]

in the last four years, I have rented my organic pastures for $250 dollars per acreage. Last year, which next year will be $300 per acreage due to water. I am acquiring 26 acreage per 200k.

Interesting. How can you ever afford to run cows? Seems like you should have market timed the land and moved the cows out of state.

Yeah, not seeing the math here myself - unless you just want to own some cows.

X3.... at those rent prices we would keep a dozen cows on our worst pasture and rent the rest out and sit back and not work so long or hard. That's 10x what most pasture rents here are bringing.

 

[Dave]

Interesting. How can you ever afford to run cows? Seems like you should have market timed the land and moved the cows out of state.

Yeah, not seeing the math here myself - unless you just want to own some cows.

X3.... at those rent prices we would keep a dozen cows on our worst pasture and rent the rest out and sit back and not work so long or hard. That's 10x what most pasture rents here are bringing.

I am wondering that myself. There is a guy here is Western Washington who has been over the top renting organic ground to grow beans on. I know of a lot of ground which can get in under the organic rules which he has paid that kind of money for. He raises green beans and shipping over the hill to Pasco which is over 200 miles away. Depending on the field location it could be over 300 miles from the cannery. The issue this coming year is going to be that the cannery he was supplying is in financial trouble. If they manage to stay afloat will they be able to continue to pay prices which allow him to pay that much rent and ship that far?

 

[uscangus]

Dave, Costco started in northwest n they are heavily pushing organic. My place is on the western side of Washington. Portland, Oregon has been number one housing appreciation in 19 consecutive months straight n typical housing average(entry level) is about 400k. Early this year, Wall Street announce housing appreciation went up 13% in2016 in Portland. Seattle went up around 10% n commanded last three months highest appreciation n entry level home is 600-675k. Since both cities have tight job market (tech jobs,amazon, Microsoft, intel, Boeing, and so on) n housing is expensive due to tech jobs, people have a lot discretionary income.

Going rate is 250 dollars per acreage to rent to dairy producer n they usually get three cuts with water.

 

[TennesseeTuxedo]

Organic is a crock.

Not saying fools won't pay extra for it though. Heck Jo here on the boards has and entire marketing game plan all worked out.

 

[Dave]

Dave, Costco started in northwest n they are heavily pushing organic. My place is on the western side of Washington. Portland, Oregon has been number one housing appreciation in 19 consecutive months straight n typical housing average(entry level) is about 400k. Early this year, Wall Street announce housing appreciation went up 13% in2016 in Portland. Seattle went up around 10% n commanded last three months highest appreciation n entry level home is 600-675k. Since both cities have tight job market (tech jobs,amazon, Microsoft, intel, Boeing, and so on) n housing is expensive due to tech jobs, people have a lot discretionary income.

Going rate is 250 dollars per acreage to rent to dairy producer n they usually get three cuts with water.

I live in Western Washington too. Only about 4 miles off I-5. And I am well aware of what the economy is doing in both Seattle and Portland as I am about half way in between the two. I also have several siblings pretty far up the corporate ladder in Seattle. I have a finger on that pulse. My guess is you must be up in the King/Snohomish area to be getting that kind of rent. I work with and know the majority of the dairy farmers in the Thurston/Lewis/Grays Harbor area and they most certainly don't pay that kind of rent. In fact I was talking to one on Friday and he shared that he was letting go a lease on about 60 acres next door to him because they want $100 an acre. It is certified organic with irrigation and great soil. He said it wasn't worth it when alfalfa is $125 delivered.
Yes, Costco is pushing the organic. That is the ultimate market for these green beans. But as I said the processer is clear over in Pasco and they are in litigation over their finances so it is up in the air as to them being in business the coming year. And of course an organic processing plant has to be certified organic and it is not easy to switch from conventional to organic. And pretty near impossible to switch back and forth during the same growing season. It is not going to be easy to find a replacement for that processer.

 

[Dave]

Organic is a crock.

Not saying fools won't pay extra for it though. Heck Jo here on the boards has and entire marketing game plan all worked out.

I will agree organic is a marketing ploy. However, conventional dairy farmer are getting somewhere around $17 a hundred weight for milk. The organic dairies are getting about $37. The organic guys are smiling all the way to the bank this year.

 

[TennesseeTuxedo]

Organic is a crock.

Not saying fools won't pay extra for it though. Heck Jo here on the boards has and entire marketing game plan all worked out.

I will agree organic is a marketing ploy. However, conventional dairy farmer are getting somewhere around $17 a hundred weight for milk. The organic dairies are getting about $37. The organic guys are smiling all the way to the bank this year.

Just as long as the consumer maintains a high level of gullibility the model works. LOL!

 

[uscangus]

:compute:

Organic is a crock.

Not saying fools won't pay extra for it though. Heck Jo here on the boards has and entire marketing game plan all worked out.

I will agree organic is a marketing ploy. However, conventional dairy farmer are getting somewhere around $17 a hundred weight for milk. The organic dairies are getting about $37. The organic guys are smiling all the way to the bank this year.

Just as long as the consumer maintains a high level of gullibility the model works. LOL!

Dave and Tennessee, heck, I am just asking what the market dictate. If they have to buy in Oregon or golden dale, or eastern Washington, you have to include labor cost and tranortation fees. Since the dairy operator is near my place, dairy operator does not have to worried labor and transportation costs. He controls the timing of making hay and has all the machinery to make round bale in order to maximize the cutting. In return, he is happy n it's a win for both of us.

 

[backhoeboogie]

Organic is a crock.

Not saying fools won't pay extra for it though. Heck Jo here on the boards has and entire marketing game plan all worked out.

I've never tried eating synthetic steak. What's it like? :lol2:

 

[js1234]

I am using the cow/calf business to eventually finance the farm that acquired in 2005 n pay for itself. I will wait until my price such 75-80 cent per lbs in heifer( black angus). I am not in hurry n still young,55.

At what weight?

 

[uscangus]

At what weight?

550-600 lbs minimum n buy during end of October and November, where no one to feed during winter or you don't have enough hay to feed.

 

[Stocker Steve]

The problem with timing the market is, as they say, you have to be right twice - at the top and bottom. You hit once - good luck finding the bottom.[/quote

I have some concerns about fast money chasing the highest return on the plant. For fast money in the cattle business -- it becomes a question of getting the timing right twice AND having a better use for the land.

Inter seeding and cover crop rotations are a hot topics. An aggressive stocker guy :hide: might do some total renovation, or let some pastures reseed themselves. Aaron might want to provide better cover to increase the deer herd. You may want to diversify with something like goats or pasture pigs. :shock: You may be able to do some custom grazing. But realistic stockmen are looking hard at their gross margins and age mix and diversification - - not all out and all in.

A natural resource manager will focus on his long term goals. He will see soil improvement each year, herd improvements each year, and a positive gross margin almost every year. He may even see some expansion opportunities. You are leaving money on the table by being totally out of the market unless you have a flexible land base.