What's corn worth?

I have a friend that planted ten acres of corn this
spring. He hired a neighbor to do all the work.
People have expressed interest in harvesting it this
fall. He doesn't have a way to harvest the corn
himself. The local elevator was paying 3.21 a
bushel on Saturday. What would a fair price for both
people involved be? This is in central MN. Thanks
for any advice.

Ironically I just wrapped up my 2015 spread sheets. Whew! How much he paid for fertilizer, chemicals and custom rates has an impact on the bottom line and I don't know what the yield is but I would say $2.21 will make him a little pocket change if he owns the land free and clear. $2.21 is very low. Local bid here in my part of NWIA is $3.35 at the elevator and $3.56 at the ethanol plant.

(quoted from post at 09:56:08 11/30/15) Ironically I just wrapped up my 2015 spread sheets. Whew! How much he paid for fertilizer, chemicals and custom rates has an impact on the bottom line and I don't know what the yield is but I would say $2.21 will make him a little pocket change if he owns the land free and clear. $2.21 is very low. Local bid here in my part of NWIA is $3.35 at the elevator and $3.56 at the ethanol plant.

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2.21? @ how many BPA? With all the inputs and custom rates he could loose money if say he only gets 50 BPA. Central MN can be all over the place in yields. From 70-80 BPA with no fertilizer to over 200 doing everything right under irrigation. And the guys pulling over 200 here with these soil conditions and no manure were spending about 350 an acre in inputs several years ago to break 200. Consequently rent isn't very expensive. Last I knew about 60 an acre.

So without knowing inputs and rent/mortgage payments plus yields plus the cost of the custom work there is really no way to even come close with an estimate in prices.

Rick

Rick

He owns the land free and clear. This was done as payment for hay ground rent that has gone unpayed for a few years. Rent owed to him was $2000 so he has $200 per acre "invested". He found a formula to help calculate bpa and came up with an average of 125 bpa on his 10 acres. Just looking to get something out if it since hadn't gotten any hay rent and wanted corn standing for deer hunting. He's not looking to get rich, just fair price for both involved. I personally think the fertilizer was put on pretty light and was planted middle of June. I know yields could have been better but it is what it is. Thanks again.

(quoted from post at 10:29:07 11/30/15) He owns the land free and clear. This was done as payment for hay ground rent that has gone unpayed for a few years. Rent owed to him was $2000 so he has $200 per acre "invested". He found a formula to help calculate bpa and came up with an average of 125 bpa on his 10 acres. Just looking to get something out if it since hadn't gotten any hay rent and wanted corn standing for deer hunting. He's not looking to get rich, just fair price for both involved. I personally think the fertilizer was put on pretty light and was planted middle of June. I know yields could have been better but it is what it is. Thanks again.

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So is the tillage and planting paid for by the guy who owes the rent or the land owner? Who's paying for the combining?

Where abouts in MN, I'm near Battle Lake.

Rick

The guy who owes rent did the tillage work,
planting, seed, fertilizer and spray. No cash out of
pocket for my friend who is the land owner. This fall
people have come to him knowing he has no way to
harvest the corn and would pay x amount per
bushel. So basically he will get his money for the
years past from whoever buys the standing corn
from him. He just wants to be fair but get what it's
worth. We are on the south end of Mille Lacs Lake.

I have $98 per acre in machine expense going by Iowa state average custom rates on most of it. I'm pretty sure my actual expense is lower than their average because I don't have machinery debt. I don't have an exact handle on my actual machinery expense per acre and I don't know how Iowa State University comes up with their rate table so I have to trust them. I have the crops custom harvested and trucked, trucking was $.09/bushel for a 7 mile haul, combine was $34. it costs me $8.00 per acre to have the P&K spread by the co-op and spraying fungicide by plane cost $10 per acre. These are machine costs only, no product included. But again my figures are what happens on my farm, not the other guy's farm.

(quoted from post at 11:14:38 11/30/15) The guy who owes rent did the tillage work,
planting, seed, fertilizer and spray. No cash out of
pocket for my friend who is the land owner. This fall
people have come to him knowing he has no way to
harvest the corn and would pay x amount per
bushel. So basically he will get his money for the
years past from whoever buys the standing corn
from him. He just wants to be fair but get what it's
worth. We are on the south end of Mille Lacs Lake.

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If he's pretty certain about yield value of the corn at the local elevator minus what it would cost him to have it harvested. Then you have to knock off a little for trucking then a little more to allow the guy buying it to make a profit.

Rick

I should clarify that the people interested are not selling to the elevator. They are looking at it for their own use so it would be saving them from buying that much more corn. So basically if the elevator is paying $3.21 my friend was hoping for something a little less than that knowing the other guy would have combining expense. The guys harvesting are not selling to make a profit and would be using it to feed young stock they weren't planning on keeping but do to falling beef prices have decided to keep over. So they are buying cheaper this way rather than going to a feed mill. Hoping for a win win for both.

For a round number he should get right around $2.85 per bushel standing. The cost of harvest would be around $30 per acre. Then there would be some trucking and maybe a drying charge. So if it is 150 BPA corn then he would have 1500 bushels x $3.21 = 4815 - $300( harvesting) -( 1500x $.15 = $225 hauling)= $ 4290/1500= $2.86. If the yield where lower his would get less per bushel as the fixed cost are higher per bushel. If the yield is higher then he would get more as the fixed cost are lower per bushel.

If I was this fellow I would get it harvested ASAP as he could get nothing if it snow hard and the wind finishes it off.

Easy solution would be....

(I rounded number for easy math).

Find out what custom combining corn in MN is per acre. Let's just say $50 per acre. Corn selling @ $3.21/BU at elevator. You want $3.00/BU. Gives them a discounted price. Let's assume 150 BU/acre harvest.

150 BU/acre X 10 acres= 1500 Bushel

1500 bushel X$3.00/bu= $4500.00.

Now subtract the combine rate.$50.00/acre X 10 acres = $500.00

So, $4500.00 - $500.00 = $4,000.00 to be paid to your friend.

LOL! I pressed 'submit reply' and went back to this thread and see you had posted just about the same.

So your friend is selling standing corn to the neighbor, and saving the cost of harvest, transport, and drying.

So the formula would be $3.21 a bu.

Minus a normal combine fee. This is often expressed in dollars per acre, but if they know about what yield, they can figure the cost per bu.

Minus a hauling fee. What does it nor all cost your friend to haul corn to the elevator, distance? An elevator could give a standard per bu cost of this in your area.

Minus a drying fee. I would be testing the loads and see if the test weight is good enough and where the moisture is at, and do a basic discount for too wet or too light about as the elevator does.

This would give you a base price.

Your friend may want to discount a few cents from this because they are helping him out?

The neighbors offering to buy the corn might be happy with the base price, since the elevator often charges a dime to 15 cents over their purchase prices when they sell corn to a buyer. The fella would need to pay that extra to buy corn.

I would say the $2.85 or so being mentioned would be a good starting point.

Man, was a fella out last night getting in a field of corn, there were some issues so it sat out in the rain for weeks here, ground too squishy to drive through. With the rain and snow today, up to 10 inches, I sure hope they are going with the combine or done with the field already? Very late up here to get corn any more?

Paul

This is the first time they have done it this way. Just talked to my friend and he said he offered it to the first guy that was interested for $1.75 per bushel. They said they would have to think about it and get back to him. I'm thinking that is cheap enough! I wish I had more storage I would buy it myself and wouldn't have to plant corn next year. The corn is still standing and I told him they better get after it. We are suppose to get 4-6 inches of snow tonight.

I wish I were rich enough to not care if I harvested 10 acres of corn or not.

But, I thank my lucky stars every night that I am not that way!

Would you mind saying which quarter of the state you are in? Would be curios if it is 200 bu land, or 100 bu land. I will expect it was not fertilized much and so forth, and closer to 100bu corn maybe less.

I realize a lot of areas they plant 5-10 acre deer plots, so its not a big deal.

But as a struggling farmer, it just goes against every thing I've done and worked for my whole life. Here in the south central part of the state you can have $1000 an acre tied up in raising an acre of corn.

Paul

We are in central MN right on the south end of Mille Lacs Lake. He found a formula on the Internet to help calculate BPA and came up with about 125. I don't think much fertilizer was applied and it was planted in the middle of June. It was planted for unpaid hay ground rent with the intention of leaving it for the wildlife but a few people have expressed interest in it so that's got this whole topic started.