Thursday, February 25, 2010
The only thing I ever bought at auction was done over the phone and pretty much blind. I was bidding on a pivot irrigation unit that was sitting on our farm in Nebraska. (Long story.) I thought I knew what I wanted to pay for it, but the bidding shot by that ceiling pretty fast, and all of a sudden I felt like I was free falling with butterflies in my stomach. It wasn't a pleasant experience. I really didn't have enough information to make an intelligent decision.
Auctions can do that to you, I guess, if you're not prepared. Reading comments in an Agriculture Online discussion, What's your bidding style? makes me think that people tend to develop their own little techniques for coping with the experience. They look the auctioneer in the eye, they stand by big people, they bid quick, or they bid just before the gavel's about to fall.
One fellow may have hit it on the head, though: "The way I know I'm not overpaying is knowing what it's worth is before going to the auction...."
"Knowing what it's worth" is the mantra of Machinery Pete, Greg Peterson, who's built a business around the importance of knowing the real value of used machinery. In Greg's regular writings on Agriculture.com and Successful Farming, he provides detailed auction prices on all kinds of used machinery. And he gleans from those details the trends in equipment pricing.
His new book, Machinery Pete's 2010 Auction Price Guide is fresh off the press. It lists more than 18,000 sale prices from 2008-2009.
As Dave Mowitz, Successful Farming magazine machinery editor, says, "Take this book to auctions and bid with confidence. Take it to your banker to prove your net worth. This is the book you need if you own farm machinery."
Wish I'd had a copy of Pete's book the day I bought that pivot.
Here's where to get yours: Machinery Pete's 2010 Auction Price Guide.
Posted by John Walter at 8:23 AM
Thursday, February 18, 2010
As I've driven down the back roads over the years, one thing that always seems to catch my eye is the sight of some big rig pulled into a tiny field. Might be a combine in a little corner of cropland stuck between some woods and a pond or a planter on a piece of ground between railroad tracks and a river.
Sometimes, the quality of the land appears to be pretty decent; other times, well, it looks hard scrabble, not worth farming at all. In any case, the equipment seems mismatched, and you just wonder what the economics are of taking on a patch of land like that.
But, these cropland fragments, a challenge to some, can be an opportunity for beginning farmers. A young farmer recently wrote in Farm Business Talk that he has a chance to rent a number of small plots of ten acres or less.
“I know a lot of guys don't like to mess with them, but to me they are a good opportunity to try out new technologies. Also,I feel that this is a way for me to get my foot in the door for bigger and better things.”
The question, though, is how much rent should he pay for these small parcels?
Experienced growers give a range of responses, including:
• Consider a crop share arrangement. “That way, the landowner would realize the lower yield from fields with excessive headlands and unfarmable corners.”
• Small fields take a lot of time and have lower yields. One grower says he offers only half the going rate. "Take it or leave it." Another says his rule of thumb is three-quarters the usual rent.
• A South Dakota farmer says that in his neighborhood the discounts are based on the features of the land: “Rule of thumb in my area is 5 acres or less with no trees or ponds to go around $50 per acre tops, 6 to 10 acres, $75 per acre. If there is a pond within 100' nobody will farm it.”
• Make sure you plan to do all the farming yourself, says one farmer. “If you are serious about farming those small patches of ground, you really need to do them yourself and not have custom spraying or combining done,” he says. “More than likely the custom applicators will charge more to do the work than they would for doing the same work in larger sections of ground.”
Craig Dobbins, a Purdue ag economist, says that the case of smaller, irregular-shaped fields is one of many factors that should be considered in figuring an appropriate rental rate. But it happens to be number sixteen, and last, on his list, which includes land quality, fertility, drainage, and facilities at the top.
What’s been your experience with farming smaller plots? Join the discussion in Farm Business Talk.
Posted by John Walter at 9:07 AM
Wednesday, February 10, 2010
Men have a slim hold on this farm chore
Some versions of retirement, or even the afterlife, in agriculture might involve riding a nice new lawnmower over a gleaming yard of bluegrass stretching forever amid a well-tended farmstead.
On working farms, you would think that mowing grass would be seen as counterproductive. Clipping grass isn’t producing any grain or forage. And doesn’t it seem like drudgery to drive back and forth on three acres without harvesting anything?
But, after driving up and down country roads all these years I’ve gotten the impression that some folks’ idea of fun and relaxation is mounting the mower and going for a long ride.
And it’s the men who are having most of the fun, though it’s something of a competitive sport. In a recent Agriculture.com poll, 53% percent of respondents said that it was the male on the farm who mows the grass most of the time. Women are doing the mowing 34% of the time, and the job gets farmed out to the kids in 13% of cases.
A friend of mine, who grew up on a farm and owns one now, is a little surprised by the results, “The men in my family never touch a lawnmower,” she said.
That’s the case in another neck of the woods. “Around here it's the adult women that mow the grass and they know how to go FAST!,” one poll respondent commented.
For some women, mowing apparently is a welcomed escape. “It’s that time I put my iPod in my ears and forget everything,” said one farm woman. “I guess it sounds crazy, but mowing for me is like going to the spa. I love it.”
For others, tending this chore pivots on the quality of the machine. “I refuse to mow the lawn because I hate the mower that much,” one woman complained. (She’s lobbying for a certain popular brand and model.)
The lawn of the future, though, may be one that needs no one to mow, said an Indiana farmer in response to the poll.
“[Our] lawn is native grasses, forbs, clover, and timothy. No mower, no mower gas, no mower maintenance, no fertilizer, no herbicides, and no time spent cutting grass!”
Posted by John Walter at 12:28 PM
Wednesday, February 3, 2010
What happens to a corn crop when you have some of the worst harvest weather in history? Instead of starting to set up their planters, a lot of farmers are still tweaking their combines to run in snow.
And the impact on the markets may still not be fully absorbed, and won’t be until the spring acreage battle is over, one analyst, Al Kluis, Kluis Commodities, says.
October ’09 did turn out to rank as the wettest, and third coldest, ever for the nation, going back 115 years, says Harvey Freese, Freese-Notis Weather.
After better November weather, December turned treacherous. “December was eleventh wettest such month on record for the nation,” Freese says. “Precipitation was among the ten wettest ever for South Dakota, Iowa, Minnesota, and Wisconsin, as well as several states in the Southeast.”
How much corn will be in the field come spring? Farmers report seeing a lot of it still standing this winter.
In an Agriculture Online poll, taken in mid-January, nearly two thirds of respondents reported seeing “a little” corn in the field in their areas. Nearly 20% said “a lot.”
A little and a lot adds up to a lot. Kluis says there will be some 500 million bushels in the field this spring, maybe more. "And, there will be twenty to thirty percent field loss," he says.
Roy Smith, a Nebraska farmer and marketing advisor, has been traveling eastern Nebraska for the last couple weeks giving presentations and has done his own windshield tour. "There are scattered fields standing everywhere I have been," Smith says. "I saw no huge acreages, but little bits add up when you put them all together. There will be substantial losses when harvested.”
You hear similar stories from farmers in other states. Conditions are such in Minnesota that standing corn won’t get touched until April or May, a grower from the southwestern part of the state told Agriculture.com.
An Illinois farmer reported in an Agriculture.com forum that several large fields of corn exist in his neighborhood and "most is mangled by the wind storms we had back in November and December.”
The situation sets up as a “double or nothing” deal on March and April weather for many farmers, says Kluis. “You can’t plant it if you can’t harvest it first,” he says.
Posted by John Walter at 8:52 AM