Farewell But Not Goodbye
This is an eventful article for me, because it’s my last Profits column for Corn & Soybean Digest.
My first article was in the January 2000 issue of the Soybean Digest, so with this issue it has been 12 years that I’ve written a column for this magazine.
Focus on These Four
Many times we’ve discussed the four major leverage points for improving bottom-line profitability. They are: marketing, machinery cost/acre, labor cost/acre and agronomic management.
Make Cycles Work For You
I learned this spring that production agriculture is not the only business that has cycles. In fact, we likely may be more fortunate than most other businesses.
Save Nutrients, Save Money
According to the United Nations, the global popu-lation will increase by more than 2 billion people in the next 40 years, and many reports have indi-cated that food production needs to double by 2050. Industry experts agree that increased food production will be achieved by intensified crop production, more so than by an expanded arable land base.
The $178 Solution
Last summer, ammonia fertilizer was $420/ton, and in late January it was $787/ton: an 87% increase in six months.
The Flip Side of Rent Rants
In the February issue we looked at cash rents from the landowners’ perspective: what they want and the attributes they look for in a tenant. Often, landowners want a 4-5% return after real-estate taxes are paid on the current value of their investment. Then if you figure on a 4% appreciation factor that we spoke about in the December Profits column, they have about an 8% total return.
Work At Landowner Relations
Probably the most important task for growers today is negotiating cash rents. Most of our clients rent about two-thirds of the land they farm, and I think that percentage will go up in the years ahead. So it has a big impact on their bottom line.
Have a Backup Lender
Farming is a business that requires large amounts of capital, and few of us can run a farming operation without the help of a lender to provide part of that capital.
Make Your Own Luck
Recently, I learned of two situations where farmers were upset by land-rental situations that happened to them. That doesn’t surprise me, as tenant/landowner relationship is often a lightning rod in the game of farming. One occurred where a client called me and said his landlady was proposing to more than double his rent.
NASCAR Offers Farming Lessons
Last month I reviewed a system Chris Barron of Carson Barron Farms is using as a growth model for multi-generational
