Postby Hammer » Thu Jan 30, 2003 12:01 pm
My numbers are a little old (2000 Delta Agricultural Digest) but they are close enough...See pages 143 and 144...
Direct Expenses, Round Up Ready= $87...Add Fixed Expenses of $26 per acre= $113/acre total production cost for Round Up Ready....At 40 bushels/acre and $5 beans, gross sales are $200 per acre less $113/acre= $87/acre in gross profit....Own your land and that is not bad money...Rent your land and you are working for the landowner, not yourself...That was as true in the 1800s as it is today...
So any yield above 40 bushels and Delta farmers are making big dollars and dont need the new soybean subsidy....Even at $4 bushel, which is a very low price historically, your gross profits would be $47/acre based on 40 bushel yields....Farm 1000 acres of beans, own your own land and $87,000 at $5/bushel and $47,000 at $4/bushel on 1000 acres of bean is not bad money....It is not untrue to say that you could farm 1000 acres of beans on the weekends and run another business during the week...Not to mention hunting leases on the 1000 acres...
It is also not untrue to say that just like oil well drilling, that there are many wealthy investors whom need tax write-offs and are willing to lose money for years in exchange for the chance to hit a really big lick...For example, the average oil well costs about $1MM to drill...10 investors at $100K each is not big money to lawyers, doctors, businessmen...They lose the $100K most wells and that helps them on their taxes...But every once in awhile the well hits and at 200 barrels a day and $40/barrel, it dont take long to recoup the loss...That would be $8000 a day/10 = $800 day per investor...
How many farmers do you know whom are out prospecting for investors?
Investors whom are perfectly willing to lose money for years for the chance to hit the big lick when cotton or bean or corn prices and yields and OPTIONS/FUTURES markets line-up and a killing can be made in farming? PLus have a place to hunt? Plus some equity in the land?
The point is this: Most Delta farmers would rather piss and moan about their plight rather than get creative in dealing with the REALITY of their situation...As Greenhead 22 and others have documented, they also are prone to lie about their yields, costs, incomes, etc than tell the truth...And they can be completely ridiculous when it comes to duck leases...All of this has been documented on this message board by numwerous others, not just me...
I suspect this is because they dont want the GOVT Gravy Train to stop and the more they complain the more they think people believe them...Sorry boys- the gig is up! The Environmental Working Group website blew your cover...
The truth is that the average yield on soybeans in the MS Delta is less than 40 bushels per acre...Even then, if Midwestern farmers spend the same money improving their land (fertilizer, tilth, irrigation, etc) that Delta farmers spend leveling and irrigating, the Midwestern farmer yields will ALWAYS beat the Delta farmer...THAT IS REALITY...The Midwetern farmers have a strategic advantage in growing soybeans, wheat and corn just like the Delta has a strategic advantage growing cotton and rice...
THE PROBLEM WITH THE DELTA IS THAT MANY FOLKS THERE DONT WANT TO LIVE IN REALITY...THE REALITY IS THAT THERE IS TOO MUCH LAND BEING FARMED BY TOO MANY FARMERS...THE SMALL FARMERS THAT DONT OWN THEIR OWN LAND NEED TO FIND SOMETHING ELSE TO DO...
I SUGGEST TIMBER AND WILDLIFE BASED TOURISM...JUST LIKE BUGGY WHEEL MANUFACTURERS HAD TO FIND SOMETHING ELSE TO DO, SO DO SMALL FARMERS WITH NO CAPITAL AND BAD LAND...NOT ALL FARMERS ARE THE SAME, NOT ALL LAND IS THE SAME...GOOD FARMERS FARMING GOOD LAND MAKE GOOD MONEY...THAT IS REALITY...
Hammer's job is to call your BS...Hopefully in a good natured way but if you get POed that is your problem...If I can open the eyes of just one more Delta farmer to the REALITY of the situation, I have done my job...Incidentally, I am in the process of developing business plans for 3 Delta based businesses...Based on my track record in other businesses, these businesses will be successful, maybe big money, maybe not, but they will be profitable...Nobody in the Delta is doing anything like what I will do...Once I have set these businesses up and they are successful,
I will then have more than LOGIC on my side in our discussions...I will have PROVEN that a new approach is not only ENVIRONMENTALLY advantageous but also ECONOMICALLY profitable...Stay tuned.
HAMMER
PS The average sheet and rill erosion rate on Delta soils is 4.9 tons per acre per year...Makes a lot of sense to spend $100/acre per year or more on chemicals, fertilizers, etc and have all that money wash off into the nearby slough, bayou or river?