Is there money in food?

[ASRG]

This weekend I went to a family fair in Red Deer. They call it center fest (a lot of young families).
Anyway I bought an ice cream cone at this vendors stand. $3.50 for a small cone.
I got talking to the guy as this was near the end of the day and business was slowing down. He had converted this old milk van and he had the ice cream in these brine refrigerators. He told me the fridges were $4500 each (2) and he had about $6,000 in the van.
He told me on the Saturday he took in over $2,000 and was around $1800 for Sunday. I asked him what the stock cost and he said in that $600 range!
Hmmm......$3200 profit for two days work?
He told me he was booked into events every weekend in July and August and two weeks in September. Had done the last weekend in June.
Seemed like a pretty decent return on his investment of $15,000?
$15000 would buy you 10 good cows (maybe more?) At $750 a calf they would gross you $7500....about four days of selling ice cream!
He thought he would try to get two more vans up and running this winter for his daughters to run. He was a real go getter type.
Bottom line there is money in food...but not necessarily for the guy raising it.

[grassfarmer]

How about comparing apples to apples to start with? You judge the icecream salesmans profit by ommitting his capital investment, fuel, depreciation and return to labor. A cow herd would look better too if you judged it on a similar basis.

The second mistake you make is to consider yourself the guy "raising the food" and complain about not getting paid retail price for it. If you are selling weaned calves you are only supplying a raw material used in the production of a food product. If you want food price start selling food to the end consumer.

I get tired of all the guys running down agriculture and telling us we'd be better selling ice-cream or working in the oil patch so you can earn big dollars a day for a few days a year. If you want to chase big wages working for someone else or running your own non-farm enterprise go for it - but why stay in the ag sector and moan about how bad it is? No wonder the next generation in most cases don't want to farm - their aspirations were maybe drowned in negativity growing up.

[rkaiser]

Not to pick on ARSG in particular by any means, however - Awesome post grassfarmer old boy.

[ASRG]

Well grassfarmer my days in raising cattle are coming to an end, just like yours will someday. I enjoyed my time at it and I made some money.
I never had much of a desire to peddle beef or be in the packing business. I guess I could have made more money if I'd peddled it but I never had the time or the desire.
I think to be a successful peddler, of beef or ice cream, you would have to enjoy it and I don't think I ever would have. I liked raising them.

[kato]

Not everyone wants to work with the public. For instance, I grow a big garden, and sell at the farmer's market. Hubby grows cattle and sells them at the auction mart. I took him with me one week, and he HATED every minute of it. I, on the other hand just love it. He can sit at a cattle sale all day long, and never want to leave.

If he had to sell his beef direct, he would probably rather not have cattle at all. That's how strongly he feels about the subject.

So I guess if it comes to the point where retail sales are the only way to make it work, I will have to be the one to do the selling.

And yes, there is money in tomatoes.

[perfecho]

Well Randy and GF, I read the post differently than a complaining farmer....I read someone who is thinking about the system, thinking about return on investment, return on time and life style choices. Did you read the part about daughters wanting to get into the business? How many of us can say that? (other than lifestyle wants)
I have always supported doing things differently and applaude those that can. The Biggs family just had another write up in the Edmonton journal and seem to be doing extremely well in their marketing of their product....congrats to them. I do a variety of things so very few of my animals go through the sale barn for beef.
Although, perhaps, if enough people had stood up, realized there was a problem and worked together for the benefit of all, including the consumer, I am sure we would be in a different place......and maybe the ones that jumped ship to do their own thing, (myself included) are as much to blame.
Wishing all the best in which ever endevour you choose and the wisdom to choose the right endevour ....for them and their families. Have a good one! Three days without rain here, yea!

[rkaiser]

We still have a chance to get back in the harness together perfecho. Watch for it bud.

[grassfarmer]

This isn't about direct marketing being the only solution its about making honest comparisons between farming and non-farming activities before writing off the former and poisoning the next generations dreams.
ASRG says he owns land near Red Deer - that's probably doubled in value in the last decade - can't say that about the ice-cream salesmans $6000 truck. He compared investing $1500 in a cow to return a $750 calf to prove beef production was less profitable than selling ice cream. How about some of those $480 or $600 cows that some of us bought during the low price years weaning $750 calves and the cow will easily be worth $800 to cull? It's deliberately picking figures to prove that agriculture is unprofitable because that's what you want to do.

There will always be production agriculture and people that can make money at it. The ones that do best will be those that are willing to pursue the endless opportunities that exist. I bet the guy that was so successful with his ice cream business could be successful in agriculture too - the guys that envy the wages and opportunities other people appear to have probably wouldn't make successful ice cream sellers either.

[burnt]

Vultures usually do well around here too.

[ASRG]

I don't think I was envious....it actually looked pretty boring to me. I don't think I ever got real excited ever in my life about making a lot of money! I got lucky on a few things for sure, but basically I just liked to farm and raise crops and cattle.
I don't think you should ever include land appreciation in any business venture......my land might have gone up, but probably so has the ice cream guys house? And my trucks/tractors/ machinery depreciate just as fast as his?
I think anyone who wants to get out and hustle should be rewarded for their effort. I don't think I was "poisoning the next generation" of entrepreneurs.....I don't think too many of them are really interested in commodity cattle? Or maybe that is just my area?
I do think most young people should really sit down and think about what they want to do.....and go into whatever that is with their eyes wide open? Playing cowboy really won't make it unless the old man has more money than he knows what to do with!

[grassfarmer]

Why am I a vulture Burnt? for buying cows when they were cheap? I thought I was helping the sellers a bit - bidding more than anyone else to get them and keeping them from going straight to the packers. What did you do? sit on your hands and not bid and bitch about them not making $1000 or $1500?

[BTOfarmallll]

[rkaiser]

I actually think that we have to put inflationary land values into the equation Don. (don't mind if I use yer name do you. This user name BS just pisses me off.)

What other business do you know that does not move if the location is holding them back? We all know that the potential to be personally profitable has a direct correlation to debt and or assets and on the farm, these two obviously involve land.

[rkaiser]

Oh yes BTOfarmall (you sneeky little hider you) I plan to watch yer video on Natural News later on when I have a minute.

[ASRG]

You could be right Randy, but land prices can also go the other way?
They have in the past and who knows....they very well might in the future?
If a lot of businesses in Arizona/California/Florida were basing their profitability on appreciating land values......I think they got a rude awakening?
What is really driving appreciating land values in Alberta? Is it profitable agriculture, or is it too much money looking for a home!
In a way the recent attempt by the Alberta government to regulate land use was probably a good idea.......done very, very, badly. If land was designated for agriculture only and not a playground for the rich it might be a good thing....with proper compensation to the landowner? It might need to be an annual "no developement" compensation on "ag only" designated land....and it must be subject to compensation review and due process of law!...as I said the government really didn't do much of a job with the Land Stewardship Act! They tried to do it on the cheap, expecting landowners to pick up the tab!