Pature Rent Cost Options ?

[Stocker Steve]

Hay prices have been dropping here, and a lot of additional hay acres were seeded down this spring due to $3 corn. Crop ground rent has dropped some but pasture rents have stayed high. So if you run the numbers - - purchased hay and pasture rent costs are about the same per lb DM. Do you see this is your area, and do you see any producers increasing stocking rates to take advantage of this?

 

[John SD]

It looks like a very poor hay year here so hay prices should rise if anything. Pasture rents seem to be holding steady. I'm getting $35/AUM this year, same as last year. Doesn't look like the pastures will hold out as well this year unless we get rain.

 

[Aaron]

Hay looks great this year here. Going to be fewer beef and dairy left at the end of this year. Some backgrounders lost big money on their yearlings and and many old cow-calf guys are getting their exit plans in place. Going to lose at least 2 maybe 3 dairy producers this year, and puts that entire sector in jeopardy in this area. No shortage of guys putting in crops, but they are riding to close to the edge to make it for long, especially if prices fall. Many don't have the acres to be cost efficient.

 

[Stocker Steve]

We got 3.5" rain in the last week, so there is plenty of forage but not much drying. The number of bale wrappers in this area continues to increase slowly. I bought some balage last winter and the pick up got a real work out.
Crops are getting less popular here. There are four guys fencing marginal crop land within 6 miles of my headquarter. All are in their late 40s or 50s, and seem to have equity for more cattle. But only one is increasing stocking density - - which would seem to pencil out better than buying or converting more ground.
Is there some risk I am not sensitive to, or is there just a shortage of people willing to move cattle or bales to increase stocking density?

 

[Stocker Steve]

No shortage of guys putting in crops, but they are riding to close to the edge to make it for long, especially if prices fall. Many don't have the acres to be cost efficient.

Are there full time crop operations in the district, or is it all small operators doing recreational tillage?

 

[Aaron]

We got 3.5" rain in the last week, so there is plenty of forage but not much drying. The number of bale wrappers in this area continues to increase slowly. I bought some balage last winter and the pick up got a real work out.
Crops are getting less popular here. There are four guys fencing marginal crop land within 6 miles of my headquarter. All are in their late 40s or 50s, and seem to have equity for more cattle. But only one is increasing stocking density - - which would seem to pencil out better than buying or converting more ground.
Is there some risk I am not sensitive to, or is there just a shortage of people willing to move cattle or bales to increase stocking density?

3.5" in the last week is what we received here too. Now I know who keeps sending me all that damn stuff.

There is a shortage of people who want anything to do with extra work. On the other hand, if they don't require the extra cash flow, why increase numbers?

No shortage of guys putting in crops, but they are riding to close to the edge to make it for long, especially if prices fall. Many don't have the acres to be cost efficient.

Are there full time crop operations in the district, or is it all small operators doing recreational tillage?

One full-time crop operator, 3000+ acres, playing with lots of borrowed money. Lots of little guys, 100-500 acres, 'playing' in the dirt. If they don't make a dime, they won't lose the farm.

 

[Stocker Steve]

There is a shortage of people who want anything to do with extra work. On the other hand, if they don't require the extra cash flow, why increase numbers?

Too true. The gift of work is not very popular. We have a couple additions planned for the farmstead and it is difficult to find skilled workers or get bids. We are joking about starting S&S Builders. Right now I am doing a cement pour per week in my "spare time".

Increasing numbers does not help cash flow short term. Just think about those $2000 to $3000 heifers... Increasing stocking density could improve cash flow, but then you are back to doing more work unless you have already done the water and fence projects. The standard expansion approach here is to buy some marginal crop ground and hire some one to build perimeter fence.

I don't do recreational tillage - - but I do enjoy driving forage production and I am learning how to do it with minimal inputs. Once the soil is somewhat balanced, and the biology is in high gear, it can start looking/smelling/acting like a jungle.