# Game Changer!



## haybaler101 (Nov 30, 2008)

Well, I was afraid it was coming and I have even mentioned it other post on here. I and 42 other people received their bid packets from Peabody Coal company today. I have been renting 210 acres from them for the past 10 years and almost all of my hay production is on the reclaimed land. Well, my 210 acres has been looped in with another 2,300 acres of tillable land. Of course, they are also offering 1000 acre package and another 800 acre tract. 4300 acres total that had been farmed by 16 local farmers now will go to the highest bids with a maximum of 3 tenants. Oh, and another perk, it is a one year lease that must be re-bid each year. Almost all of it is virgin dirt except for what I farmed but also most of it has been owned by Peabody for many years, highly neglected, plenty of brush rows, erosion, and irregular small fields. General consensus is it will still take $200+ an acre to get it with half due April 1st. So, I guess, since I do not have the borrowing capacity for a quarter million for rent and another half million for inputs or the equipment to jump from 800 to 3000+acres, I am going to lose the bulk of my hay production. I only have 28 acres of alfalfa outside of this, so I am going to nuke it and plant it in corn and liquidate my hay equipment. My only hope at staying in the hay business is if my neighbor who has rented a chunk of the parcel can put in a bid and we can convince Peabody to allow a sublease. This neighbor farms about 6000 acres already and is always gung ho for more, but there again, it takes CASH. Oh well, anybody want to buy a baler, or a mower, or a rake, or a Tedder?


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## PaMike (Dec 7, 2013)

Sorry to hear that. Its a shame when big business like that ruins a good thing for a lot of neighbors. I wouldnt sell too fast, you never know how it will shake out through the year...


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## bbos2 (Mar 20, 2015)

Bad deal... Hope it bites them in the ass. I've seen it happen before. As pamike said maybe see how it goes


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## haybaler101 (Nov 30, 2008)

Yeah, probably ride out this year on equipment. Peabody is in dire financial duress due to their own greediness and Obummers politics.


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## glasswrongsize (Sep 15, 2015)

Sorry to hear the bad news Haybaler. I can't fathom how they would make more money from 3 tenants over 42 or however many had the parcels. I would think that the BTO's would expect a "bulk discount" for renting that many acres, plus eliminates a bunch of the bidding pool. Possibly they are willing to forgo the larger payday in lieu of fewer people with whom they have to deal?

I expect that a lot of BTOs will not bid the going rate for your area as they will not be able to use a 3 or 4 year soil amendment schedule. If they put anything on that will last more than 1 year, they might be outbid by someone else next year knowing that they will be getting free, already-fertilized soil.

I wouldn't expect their current proposition to last too long before they rethink their ideas.

73, Mark


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## Thorim (Jan 19, 2015)

Remember Haybaler when one door closes another opens, some times it pays to just sit

tight, some times that door that opens so quite we have to listen for it instead looking for it.


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## PaMike (Dec 7, 2013)

Who knows, maybe you can custom bale for the guy that's renting the ground. Nothing like making money on the same ground while someone else ties up their cash in rent, inputs and crop production...



Thorim said:


> Remember Haybaler when one door closes another opens, some times it pays to just sit
> 
> tight, some times that door that opens so quite we have to listen for it instead looking for it.


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## hog987 (Apr 5, 2011)

Short term leases are the worst thing for the land. No one will put any effort into long term planning. Just use it as a short term cash cow.


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## swmnhay (Jun 13, 2008)

Wow that sucks.


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## Widairy (Jan 1, 2016)

Sorry to hear that. Be patient, sometimes these things work out better in the long run than one can foresee. I missed out on some land right across the road from my place. Was mad as hell until I watched the other guys corn crop drown out the first year. The second year he only got half of it seeded into hay and last year the hay that was growing there looked more like weeds than anything else. Not getting that previous fallow land ended up saving me money and headaches. I understand you're looking at a totally different situation and I feel for you. I am just saying don't let it tear you up too much, you never know what might be coming around the next corner.


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## FarmerCline (Oct 12, 2011)

Hate that for you.....hopefully something will work out. It's a shame the company that owns the land is trying to shut the smaller farmers out.....only thing worse was if the land was going to be developed and ruined for farming forever like some land I lost a couple years ago.


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## OhioHay (Jun 4, 2008)

Sorry to hear that. DefinItely the thing I hate about renting ground, is the lack of stability it provides. If the equipment is owned with no payments., I would wait at least a year and see how things shake out.


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## JD3430 (Jan 1, 2012)

I'm sorry to hear about this setback. As said above, take some comfort in that it gets you up and knocking on the doors of new opportunities.

The Obama economy almost fully closed the door on my construction business in 2010. I lost 90% of my income I depended on for 20+ years. Talk about scared! Farming opened a new door of opportunity for me. Now construction has bounced back a bit and I'm doing both.

Hopefully you can dig deep and find a way to keep one foot in farming and learn a skill in something else for a while. When farming comes back, you'll be good a TWO ways of making a living and much better off in the long run!!

Is there something else you always wanted to do other than farm?


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## haybaler101 (Nov 30, 2008)

Got my bid ready to submit. $492,393 for 3325 acres. I think I have it low balled by 50 to 75 dollars an acre so I don't think I will have to find the money.


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## deadmoose (Oct 30, 2011)

That is a big number.


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## haybaler101 (Nov 30, 2008)

Yeah, only need another 1.5 mil to get it planted. I am thinking about a " Go Fund Me" account.


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## Lewis Ranch (Jul 15, 2013)

2 million bucks on 3300 acres is over $600 an acre. How much will the land gross per acre? I can't see how a fella could make any money, I guess I should start row cropping.


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## deadmoose (Oct 30, 2011)

3 dollar corn at a mere 200 bushels breaks even.


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## haybaler101 (Nov 30, 2008)

deadmoose said:


> 3 dollar corn at a mere 200 bushels breaks even.


well, I was figuring 160 @ $3.80. My rent bid of 150 is break even, some idiot is going to bid 250 though.


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## glasswrongsize (Sep 15, 2015)

yup, and $3.50 corn corn would be $330,000 profit.

Here, 200 bps corn is bragging rights though and 160-180 are average for the bigger guys...I speculate the average from mere talking with different farmers and it is baseless other than that.


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## Lewis Ranch (Jul 15, 2013)

deadmoose said:


> 3 dollar corn at a mere 200 bushels breaks even.


Around here they do good to make half that, so they say. Better ground and weather up there I guess, and hopefully a good insurance broker.


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## swmnhay (Jun 13, 2008)

haybaler101 said:


> well, I was figuring 160 @ $3.80. My rent bid of 150 is break even, some idiot is going to bid 250 though.


just heard a couple quarters that a investor had just bought for around 8500 got rented out at $360 per acre.Not the greatest ground either.
He has another 80 I was kind of interested in for the grandson but didn't even bother putting a bid in after talking with him.Havn't heard what that one rented for but I wasn't going above $200.Kind of crappy deal for the GS he was set to rent that 80 from his great grand mother in 2 yrs when the current rentors lease was up.She passed away and her kids sold it for $9000.2 of her siblings wanted to keep it in the family and put offer in for 7000.Realtor found a buyer at $9000 so it was sold.


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## bbos2 (Mar 20, 2015)

swmnhay said:


> just heard a couple quarters that a investor had just bought for around 8500 got rented out at $360 per acre.Not the greatest ground either.
> He has another 80 I was kind of interested in for the grandson but didn't even bother putting a bid in after talking with him.Havn't heard what that one rented for but I wasn't going above $200.Kind of crappy deal for the GS he was set to rent that 80 from his great grand mother in 2 yrs when the current rentors lease was up.She passed away and her kids sold it for $9000.2 of her siblings wanted to keep it in the family and put offer in for 7000.Realtor found a buyer at $9000 so it was sold.


Hear these kind of stories a lot. As soon as some get the family farm in there hands they are all to willing to sell and buy something that looses money and is eventually worthless.
All they see is the final number ... Had they sold to the family they would have to pay no commission to the realitor which is worth quite a bit. Still got more through the realitor but could have saved enough to make it worth keeping it in the family. Sad for the grandson that people don't see it that way


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## swmnhay (Jun 13, 2008)

bbos2 said:


> Hear these kind of stories a lot. As soon as some get the family farm in there hands they are all to willing to sell and buy something that looses money and is eventually worthless.
> All they see is the final number ... Had they sold to the family they would have to pay no commission to the realitor which is worth quite a bit. Still got more through the realitor but could have saved enough to make it worth keeping it in the family. Sad for the grandson that people don't see it that way


Yep they were out voted 2 to 4.

To bad the Gr Gramma hadn't placed it in some sort of trust to keep it in the family.


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## haybaler101 (Nov 30, 2008)

haybaler101 said:


> Got my bid ready to submit. $492,393 for 3325 acres. I think I have it low balled by 50 to 75 dollars an acre so I don't think I will have to find the money.


Finally found out yesterday, neighbor got 3300 of the 4300 acres rented for about $730,000. Apparently they were outbid by $100,000 but Peabody kicked out top bid for not being credible and couldn't prove financial ability to pay rent. Now, just have to work a deal with neighbor to get my hay back plus they have some hay in this package that I may get too because they are going up 2000 acres on crop ground over last year. Plus, I will probably hire out to combine for them this fall. Also, just contracted to big square bale 100 acres of alfalfa for a feed client 35 miles from home.


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## SVFHAY (Dec 5, 2008)

Hopefully this works out to be a blessing in the long run, sounds like it may. Now you can get back to full night of sleep. I guarantee this situation would have made it very difficult for me to sleep well if I was dealing with it.


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