Posted by John T on August 20, 2010 at 04:43:41 from (66.244.97.31):
In Reply to: land auction posted by billonthefarm on August 19, 2010 at 18:09:57:
Can someone please help me with the math, as I dont understand all this from a pure investment strategy: I currently have some guaranteed 5% investments so I had to try n figure out the economics of paying $8,000 to $10,000 per year to farm??????????????
Let's use $9,000 per acre and say you had that cash available.
1)If you put $9,000 in a good safe blue chip type (yeah right) investment at 4% interest, thats $360 per year INCOME (if you can get 4%???)
2) If you only got 3% thats $270 per year INCOME
3) If you raised 160/bushel corn and sold it for $4.00 per bushel, thats $640 per acre MINUS production and equipment etc costs, say $300 per acre, that leaves $340 INCOME PS NO WARRANTY ON THESE COSTS, I JUST HAD TO USE SOMETHING
What Im saying is, when considering the cost of todays equipment, seed and fertilize if you pay $8,000 per acre for farmland and even figuring $4.00 corn HOW DO YOU COME OUT??????
Wayyyyyyy back in the seventies I farmed and got near $3.00 for corn when seed n fertilize wasnt half what it is today AND I MADE GOOD MONEY FARMING (used old two cylinder Deeres BEFORE they were collectibles lol) buttttttttttttttt if production costs have doubled and land prices tripled since then yet corn is still $2 to $4 I JUST DONT SEE THE MATH AND ECONOMICS GRRRRRRRRRRR
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