Minding Ag's Business
Marcia Zarley Taylor DTN Executive Editor

Tuesday 02/18/14

No Substitute for Staying Low Cost
Bottom 25% of corn growers barely eked out a profit during the glory years of 2008-2012, some financial records show. That doesn't bode well for leaner profits on 2014 returns.[Read Full Blog Post]
Posted at 1:08PM CST 02/18/14 by Marcia Zarley Taylor | Post a Comment
Comments (6)
Thats a new thought!!! That farm incomes vary with farm management. Marcia, as long as there is crop insurance there will be guys growing corn for 27 dollars an acre.What I have been saying, is goverment will keep the poor performers going.Like your guys who are not worried about $4.00 corn.
Posted by Raymond Simpkins at 4:03PM CST 02/18/14
How much of the bottom 25% operators $225/acre imputs; being hidden as income - "capital expense"? Does cash and accrual accounting have different advantages for farm operation?
Posted by doug taylor at 7:10PM CST 02/18/14
Doug has a good point. Maybe some of the lower group smart like foxes!
Posted by Unknown at 7:30PM CST 02/18/14
Doug, the bottom 25% spent $225/acre MORE than the most profitable farms, for total expenses around $775/acre (see chart). Everyone was measured on accrual basis and used the same accounting program, so the lower group was not smart like foxes. If their land is paid for free and clear they have an extra cash cushion not shown here, but if they are renting most of their ground, they have will need real cost adjustments to stay afloat.
Posted by Marcia Taylor at 1:38PM CST 02/19/14
Poor Operators? Top 10%. Maybe the ancesters of the bottom 25% landed on the wrong quarter section to start with. If one buys some land in good growing year when lush crops surround, the long term operating is much more challenging. The bottom could well be better managers and operators than the top, just sat at the wrong table and dealt a poor hand to start with. Once a foundation is poured, it is not affordable to move it. Compare $27 to minimum wage, it brings home bacon in a smaller grocery bag.
Posted by Bonnie Dukowitz at 5:56AM CST 02/20/14
With expenses just above $500/A, my question is what are they using/paying for cash rent? Are the ones on or near the bottom paying more for certain inputs or is it all cash rent/debt payments/family living?
Posted by Pedro Sanchez at 9:45AM CST 02/21/14
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