What would you do?

[mitchwi]

80acres open, hills. You don't need the land at the moment, say 5 to 10 years. Would you rent it out or plant crops yourself. You have the tractor hp for dig and disc and that equipment. You have no planter or fertilizer equipment. You have a corn picker, but not a combine nor a dryer or bins. If you plant yourself, buy the equip? or hire custom?

I have done the math, and if hired custom, corn prices would have to be pretty close to $1.80/bu to break even. Between LDP and current prices, that is realistic. I have not done the math to buying own equip. Obviously that would involve longer period of time for ROI.

If I rent, well, cash in hand, but I forgo expansion. At this point I am not ready/willing to expand the farming operation (cattle).

Any opinions either way? Appreciate it!

Michele

 

[ollie']

Considering the price of old combines etc, if you have time to do the work owning and farming would make the most money. You can get a good combine cheap.

 

[Texas PaPaw]

Michele

Been down this road myself. IMO-for small acreages owning equipment is not a good place for your capital $$. Either have it custom farmed or rent out. If you rent out you will not tie up capital that can be used for higher ROI assets such as livestock. If you rent out have a provision in the lease that lets you take back a portion of your land, as needed for your uses. This will let you expand your livestock operation, debt free, as you accumulate additional capital. As we are in the early stages of the down side of the cattle price cycle, debt based expansion of a cattle business would be very risky at this point. However in a few years, as the price cycle begins its upward phase, will be an opportune time for expansion. Having accumulated capitol and additional land will make it easy to expand when the right opportumity arises.

Just my 2 cents worth.

Good luck & happy trails.

Brock

 

[Anonymous]

I saw an old MF combine with a 327 Chevy corn head and grain platform go for $675.00. It sounded good, ran good and not a leak on the engine, owner said he put a cam in it and you had to use hi test gas in it or it would sputter. $675/ couldn't believe it.

 

[Scout]

If you decide to rent it out, you may be able to use the resources that your tenant has in order to help you out. (they do the work) Say, if you wanted some dozer work done, and your tenant had a dozer...or if you needed land tiled, or gully plugs put in. It's always nice to deal with a farmer that has more 'stuff' to do things with. It allows you an easy way in to have them perform basic upkeep and improve your land.

Just a thought.

 

[mitchwi]

I appreciate the input! Keep them coming! Helps me to think about things I didn't initially think of!

Michele

 

[dj]

Lease your ground to a windfarm energy company?
Looks like there is developement in WI. but I don't know about your particular araea.

 

[TheLazyM]

mitchwi,

I dont think i would be looking into renting. just cause around here its pretty cheap to lease/rent land if you can find it. somewhere around $35 an acre a year. you might beable to get $3000 a year. that might brang you $15000 on a 5 year lease.{i'm going on that you might need the land in 5- 10 years} that $15000 would just be a good start on a barn. i believe i would make use of it. be it haying or grazing or even row cropping. just having the 80 acres is a big jump in the opperation.

 

[Scout]

mitchwi,

I dont think i would be looking into renting. just cause around here its pretty cheap to lease/rent land if you can find it. somewhere around $35 an acre a year. you might beable to get $3000 a year. that might brang you $15000 on a 5 year lease.{i'm going on that you might need the land in 5- 10 years} that $15000 would just be a good start on a barn. i believe i would make use of it. be it haying or grazing or even row cropping. just having the 80 acres is a big jump in the opperation.

I hadn't thought about numbers, necessarily. Around here, good cropland gets cash rented for $100/acre- sometimes more. I don't know what the going rate is around you. I always forget about that whole 'I'm not in the same geographical area as you' thing on here. ;-)

 

[K-SHIRES]

given your description of situation, Would cash rent on an annual only basis to farmer for corn or grain production. Hay production would require you to enter a longer commitment because 3-4 years needed for farmer to recoup investment.(i,e, ALfalfa )
This allows you more flexibility if your plans change. Also, if you are not satisfied with farmer's practices or whatever, you can move on to someone you get along with better. Hard to switch if you sign a 5 year lease.
You want to keep it in production to get use-value taxation credits in WI. Investing in grain machinery for only 80 acres very, very poor choice. There's a reason old combines are "cheap". They are the most expensive bargain you could ever find. Leave grain farming to grain farmers who spread their costs over many acres. As it is, they are so darn good at it they have overproduced to the point they have just about worked themselves out of a job. Do I sound opinionated? LOL.

 

[TheLazyM]

I hadn't thought about numbers, necessarily. Around here, good cropland gets cash rented for $100/acre- sometimes more. I don't know what the going rate is around you. I always forget about that whole 'I'm not in the same geographical area as you' thing on here. ;-)

Your right. i was'nt saying you had a bad idea, cause for some its a darn good idea. mitchwi seems to have a plan of using the land for their selfs soon in the future. i think 5-10 years down the line is really not that long. so it is my personaul believe that renting for 5- 10 years will be more than a pain in the butt than it would be of help. say 100 an acre thats still only $8000 a year over 10 years sure that would be $80000 and that would make a good starting point but at what price? i know if i was talking to mitchwi, about rent from them and they where talking only 5- 10 years i'd probally walk away. i dont know that i could resolve the money i put into the land in 5- 10 years.
i dont about in yall's area but row cropping is pretty good money. the guys around here cut about 100 bu an acre of corn. 65 bu of beans and 80 bu of wheat. yea some are more, thats the smallest numbers i've heard in awhile. this last harvest they where cutting 165-235 bu of corn an acre.
if you where to say 80 acres x 100bu x $1.95 = $15600 just off of corn. beans at around $5.00 a bu and wheat $3.50 it wont take long to get your money back and seems to make more sence{to me} to just go ahead and start farming it sence i was going to anyway.
i bet if someone where to run the numbers on hay they could show a pretty good penny off that 80 acres as well.