Understanding the Financials of a Farm: Behind the Scenes of a 1,700 Acre Operation

💰Farmers' income is not just from selling their products but also from government payments.

🌽Corn yield in Iowa in 2018 was 196 bushels per acre, contributing to farmers' income.

📊The Chicago Board of Trade sets the market price for corn and soybeans, but basis affects the price farmers receive.

📑Farmers store their grain to capture higher prices in the future, but storage costs can vary.

🚜Equipment expenses on farms can be substantial, with older equipment being cheaper but requiring more repairs.

Do farmers only earn money by selling their products?

—No, farmers also receive government payments and subsidies to support their income.

How is the price of corn and soybeans determined?

—The price is influenced by the Chicago Board of Trade, but basis and local demand also affect the price received by farmers.

Why do farmers store their grain?

—Farmers store grain to capture higher prices in the future when the market is more favorable.

Are equipment expenses significant on farms?

—Yes, equipment expenses can be substantial, especially for newer and more advanced equipment.

Do farmers rely solely on their crops for income?

—No, farmers also have other sources of income, such as livestock, government programs, and diversification.

00:00Introduction to the video and the importance of understanding the financials of a farm.

03:29The different sources of income for farmers, including selling products and receiving government payments.

05:42The process of selling corn and soybeans, including basis and the impact on prices received by farmers.

07:46The cost of storing grain and the factors that influence storage expenses.

09:26The significant expenses associated with equipment on farms and the importance of balancing cost and efficiency.

11:22Overview of seed costs and the importance of maximizing yield.