Equity

[cowman]

How much equity can we afford to lose?
I recently read an article where it was stated that a cow/calf operation needs 300 cows as a stand alone business. Supposedly this figure is for one man with the wife and kids thrown in for free I guess!
If we figure our cows were worth an average of $1300 each before this disaster what are they worth now? Would $500 be reasonable considering there is no bred market for anything but the youngest?
If so then the 300 cow herd has gone from $390,000 to $150,000, a $240,000 loss! Of course we are not selling at $500...yet. If these low prices drag on for seven years though we will be selling the majority of those cows whether we like it or not!
The bottom line is this business isn't viable if something doesn't change and pretty damned quick! Sooner or later the banker is going to come calling. What happens then?

[grefer]

It doesn't matter how you cut it,its' not a pretty picture.I am sitting here in Sask wondering how the livestock industry is going to survive in Alberta at best.Land values are so high in alot of areas of Alberta,a rancher,farmer what ever can't own land and justify putting cows on it or anything else ag related as far as that goes.I know of land north of Barrhead that sold for 700,000 for three quarters.How does that pay.The people that own and farm it have other land and work off farm to pay the bills.When do we as producers say enouph is enouph.

[cowman]

Grefer, you have sure got it right about Alberta! A relative of mine sold three quarters of land east of Red Deer for $1.4 million to a Dutch dairy farmer. Since then the Dutch farmer has built a huge barn and bought a bunch of cows and quota. I guess he sold out in Holland so had lots of money. The going price for land in Holland is $100,000/acre!
What is really troubling is the local municipality is now coming up with a land use bylaw that will probably make it more difficult to subdivide our land and thus maximize our investment. They say they need to preserve good farmland. Which is fine and dandy but who eats the loss....once again the farmer. And meanwhile the city continues to put up houses on the best land in Central Alberta!
There is no shortage of buyers for farm land here. It has nothing to do with the productive value of the land. It has more to do with petro-bucks trying to find a home or Europeans looking for a place to farm near a city that has all the goodies.

[ivbinconned]

I hour north of Saskatoon...good quarter...grows 100 bu. per acre barley...had one offer in two years of $65,000. Could have sold it for double this 15 years ago!
At this rate...won't retire...just become a ward of the state.