Post of the Day
January 7, 1999

From our
Harry Jones Folder

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light.

Go To: Post | Folder

Subject: Re: Harryifyou'rethere
Author: tsmiller

"I'm surprised that Harry is a 42-year old farmer. I'll bet if you check the Bureau of Labor Statistics figures, these are few and far between. Besides, the farmers I've known are in debt past their eyeballs most of the time so I'm mighty surprised to see Harry investing instead of paying down his debt.

(notice I was careful not to use statistics twice in a row ;) "

Though, I do not farm, farming has been in my family for many years. A farmer need not be far in debt. In many cases, farms are in families for years (i.e. the land is already paid for). Also, many farmers that I know do have some market savvy. While they might not be investing in a lot of stocks, they do need to keep track of interest rates and commodity prices. It can also be important to keep track of the value of the dollar, yen, and other currencies as these can affect the amount of US grain exported (and consequently the price). Also, to be successful, you need to have a better handle on personal finance than the average joe has. Afterall, you if you sell your entire harvest at one time, you may be getting only one pay day a year.

  • seed purchase price
  • fertilizer purchase price
  • property taxes
  • fuel expenses
  • herbicide costs
  • grain selling price
  • grain drying costs
  • grain storage costs
  • equipment purchase costs
  • equipment maintenance costs
  • interest expenses
  • insurance

"Afterall, you if you sell your entire harvest at one time, you may be getting only one pay day a year."

Consider the money issues a farmer faces every year:

The above are money issues that a simple crop farmer (i.e. wheat, soybeans, corn) must consider. If you add livestock to the operation, there are even more financial considerations.

In many cases farmers with small/moderate operations are managing assets in excess of $2,000,000. Consider the following:

  • Land: 700 acres @ $2500 = $1,750,000
  • Equipment: 1 Combine harvestor @ $200,000 = $200,000
  • Tractor: 2 @ $50,000 = $100,000
  • Grain Truck: 1 @ $35,000 = $35,000
  • Additional Equipment: $75,000
  • Buildings: $40,000

Total: 2,200,000

I'm guessing this asset total represents much more than most people reading this post have invested in the market. Granted, this does not make a farmer an expert in the securities market but it does suggest that a successful farmer needs to have a fair bit of financial skill.

Sorry for the rant, but farming requires a lot more $$$ savvy than most people posting on this forum are giving Harry credit for.


To read previous selections, Go To Post of the Day Archives

The Post of the Day may be edited for readability or length, but never for content. The opinions expressed in the Posts are those of their authors, and not necessarily The Motley Fool. We make no claim or warranty as to the veracity or accuracy of any post, and present this feature only as an example of what may be found on our message boards. Don't take the Post of the Day, or anything else here, as gospel and, as our seventh grade English teacher, Mrs. Peacock, used to say, do your own homework, and avoid run-on sentences.