Special to the Star-Telegram
The other day I heard a man complaining about "all of these rich farmers." I wondered where he was from and who he knows that I don’t.
My wife built a nice little cow herd growing up.
When we married and moved to West Texas, we thought we would buy some land and get our start in agriculture. Out there you can still buy grazing land for $600 to $700 an acre — crop land is even less.
That might sound cheap to a doctor from the city looking for a place to hunt, but a cattleman knows that land at that price won’t "cash flow." In other words, you can’t pay for $600-an-acre land with income from cattle. That being true out west, imagine trying to pay for land in the rest of the state where recreation seekers have driven prices to $2,000 or more per acre.
Land is just one expense for producers.
Consider the cost of planting cotton. Good cotton seed costs about $265 a bag, which covers about five acres. That comes out to about $53 an acre. Fertilizer costs $1,000 — twice what it was two years ago. At 125 pounds per acre (which is conservative), the farmer is out $62.50. Herbicide costs about $36 an acre, also twice what it was two years ago.
So without the Boll Weevil fee, land costs, equipment and repair costs, defoliation costs, harvesting costs or fuel costs (do you remember how high diesel was during planting time?), we are up to $151.50 to grow an acre of dry-land cotton.
What can you get in return?
Cotton is selling for around 33 cents a pound, which works out to about $100 an acre on a dry-land farm. Keep in mind that cotton was worth around 33 cents in the 1930s — it was up to the 50-cent range in the ’40s.
So assuming that you only had to plant your crop once (which would have made you one of the "lucky ones"), and you were able to produce an average yield, you could have planted, grown and sold an acre of cotton and only lost $51.50. And that’s without all of those other expenses. With the government price supports, you could almost break even. Sound fun?
To improve the mood of your spouse when you enter into this money-making endeavor, let her be the accountant.
After she writes checks to pay the $75,750 cost of planting an average West Texas crop of 500 acres, plus the land bill, the equipment bill and the payment on last year’s loan which couldn’t be paid off because the crop failed, reassure her with these words: "Don’t worry, if the crop comes in we will be able to pay all of this back next year."
Here in North Central Texas, our main crops are hay and cattle. Fertilizer and fuel prices make it cost $60 to $80 to produce a round bale of coastal bermuda, which would then sell for $50 to $60 — if you can sell it, that is.
And despite high beef prices at the grocery store, good 600-pound heifers are bringing about 75 cents a pound; that’s the lowest they’ve been in years. But cattle feed is up $100 a ton from last year.
Regardless of the commodity, the story is about the same.
I’m in the position to know a few farmers and ranchers, but I don’t know many who are getting rich. On second thought, I don’t know any.
But if you still think they are, maybe you’ll consider quitting your job and going into farming. Our country depends upon the next generation of farmers and ranchers for food and fiber, but I only know a handful under 40 years of age.
Besides feeding the country and getting rich, you can be your own boss.
That means that you can choose whether to have insurance and what kind to have since you’ll be the one buying it. You can decide the color of your company pickup; you get to buy that, too.
In fact, you’ll be the owner of your company’s entire inventory, which will be worth a good bit more than your house. After your 15 hours in the field, you can come home and help your spouse with the accounting. It will be fun to spend so much, and even more fun to figure your taxes at the end of the year.
And when your crop fails, nobody will be able to fire you.
As for my wife’s cattle, we sold them and put the money in a savings account.
John Bird is county executive director for the Eastland County Farm Service Agency, a division of the U.S. Department of Agriculture.
The other day I heard a man complaining about "all of these rich farmers." I wondered where he was from and who he knows that I don’t.
My wife built a nice little cow herd growing up.
When we married and moved to West Texas, we thought we would buy some land and get our start in agriculture. Out there you can still buy grazing land for $600 to $700 an acre — crop land is even less.
That might sound cheap to a doctor from the city looking for a place to hunt, but a cattleman knows that land at that price won’t "cash flow." In other words, you can’t pay for $600-an-acre land with income from cattle. That being true out west, imagine trying to pay for land in the rest of the state where recreation seekers have driven prices to $2,000 or more per acre.
Land is just one expense for producers.
Consider the cost of planting cotton. Good cotton seed costs about $265 a bag, which covers about five acres. That comes out to about $53 an acre. Fertilizer costs $1,000 — twice what it was two years ago. At 125 pounds per acre (which is conservative), the farmer is out $62.50. Herbicide costs about $36 an acre, also twice what it was two years ago.
So without the Boll Weevil fee, land costs, equipment and repair costs, defoliation costs, harvesting costs or fuel costs (do you remember how high diesel was during planting time?), we are up to $151.50 to grow an acre of dry-land cotton.
What can you get in return?
Cotton is selling for around 33 cents a pound, which works out to about $100 an acre on a dry-land farm. Keep in mind that cotton was worth around 33 cents in the 1930s — it was up to the 50-cent range in the ’40s.
So assuming that you only had to plant your crop once (which would have made you one of the "lucky ones"), and you were able to produce an average yield, you could have planted, grown and sold an acre of cotton and only lost $51.50. And that’s without all of those other expenses. With the government price supports, you could almost break even. Sound fun?
To improve the mood of your spouse when you enter into this money-making endeavor, let her be the accountant.
After she writes checks to pay the $75,750 cost of planting an average West Texas crop of 500 acres, plus the land bill, the equipment bill and the payment on last year’s loan which couldn’t be paid off because the crop failed, reassure her with these words: "Don’t worry, if the crop comes in we will be able to pay all of this back next year."
Here in North Central Texas, our main crops are hay and cattle. Fertilizer and fuel prices make it cost $60 to $80 to produce a round bale of coastal bermuda, which would then sell for $50 to $60 — if you can sell it, that is.
And despite high beef prices at the grocery store, good 600-pound heifers are bringing about 75 cents a pound; that’s the lowest they’ve been in years. But cattle feed is up $100 a ton from last year.
Regardless of the commodity, the story is about the same.
I’m in the position to know a few farmers and ranchers, but I don’t know many who are getting rich. On second thought, I don’t know any.
But if you still think they are, maybe you’ll consider quitting your job and going into farming. Our country depends upon the next generation of farmers and ranchers for food and fiber, but I only know a handful under 40 years of age.
Besides feeding the country and getting rich, you can be your own boss.
That means that you can choose whether to have insurance and what kind to have since you’ll be the one buying it. You can decide the color of your company pickup; you get to buy that, too.
In fact, you’ll be the owner of your company’s entire inventory, which will be worth a good bit more than your house. After your 15 hours in the field, you can come home and help your spouse with the accounting. It will be fun to spend so much, and even more fun to figure your taxes at the end of the year.
And when your crop fails, nobody will be able to fire you.
As for my wife’s cattle, we sold them and put the money in a savings account.
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