You now have two years under your belt, and you may have $20,000 or more in the bank; or, you could be deep in the hole and looking forward to better days.
For Year 3, you have a big decision to make, because this decision will stay with you throughout the rest of the game. You are thinking about selling your current farm and buying a new farm.
The new farm has better soil than your current farm and is generally more profitable for both cattle and wheat production. Unfortunately, the new farm is more prone to losses from droughts, which happen every 6-8 years. Of course, a drought will reduce your calf weights and wheat yields.
You will need to sell your current farm to pay for new farm, but you have a buyer who has offered you the same price it will take to buy the new farm; so, your bank account will not be impacted by your decision – it’s almost like a swap. Also, your crop mix will not change. If you are all cattle, you will stay all cattle; same for all wheat; same for diversified with both cattle and wheat.
The table below presents a comparison of the expected profits from the current and new farms. You can see that the new farm has higher highs and lower lows compared to the current farm.
Remember that risk and reward move up and down together. Do you want the added risk for the change at added reward? Click next topic to make your decision: Should I stay or should I go?