Nero Cowboys

[kato]

I'm not so sure that it's a "cheap food" policy exactly, it's more a matter of having a system controlled by huge corporations who's sole function is to generate profit, and keep up the share values. All they have to do is have a smaller profit than the quarter before, and their shares take a lickin'. Imagine, if they show a loss! Therefore, if there is a loss to be endured, it must be passed on down the line until it hits the spot where the losses will be absorbed.

The top of the heap is commited to profit, while those at the bottom take the hit for them. We are independant, and answer to no one but the bank, so as long as we are willing to soak it up, and the banks are willing to give us the money to keep banging away, things will not change. They will give us the rope we need to hang ourselves as long as they are reasonably sure they can recover their losses. If not, the plug gets pulled, and our unsecured creditors take the hit. These are generally other small businesses who are also at the bottom of the pile. Do we see a trend here?

The 'big'at the top collect the profit, and the 'small' at the bottom take the real risk, and cover the losses.

The real question is "How do we change this picture?"

[cowman]

kato: In Europe I am sure the big corporations rule the roost too? Government policy is what drives a sustainable agricultural sector. A classical example is our dairy and poultry industries. Government policy(supply management) has allowed these industries to flourish while other sectors have languished? And in reality hasn't Europe got a type of "supply management"? I mean they basically produce all the food for the EU while limiting imports? Their export problems are being slowly taken care of by set asides and targetted subsidies?
Balancing supply and demand eliminates distortions in the market place. In other words it gets rid of the boom bust cycle, supplies affordable food, provides a reasonable profit for everyone. It provides stability for everyone. And a wide open free market will never be able to do that.

[Horse]

To bombay it always comes up when leases are mentioned that lease holders are responsible for all of these things such as fire liability ect the last time I looked I to am responsible for such and I do not have the luxury of free rent or 5 -10% of going rate . Just show me anyone that gives thier annual lease payment to thier renter on free hold land.
Take last yr when ralph and co gave $4 per acre on uncultivated pasture on these 40 acre per cow leases thats $160 per cow ,not bad for land you dont own.
As for value of leases the A C C did a study on values and came up with a sale value amounts to what the lease cost as compared to what it will produce in essence the leases are to cheap on an A U M bassis but they wouldnt publish it because it look bad for lease holders os they charged $20 for the report that we as producers paid for in the first place .
If resource revenue from a lease are an intregal part of a lease why is 2 identical 1/4s the same price when 1 has 2000$ revenue before you even put a cow on .
There is 6000 lease holders out there that has a very substantal advantage over the rest of us it is hard to compete. A few months ago there was talk of a cow cull mabey if we just got rid of the welfare cows the rest of us could hang on.

[bombay_43]

Horse: You have not addressed the original cost of the lease. I told you, you can purchase a grazing lease just like the rest of us did! They come up for sale all the time.

Government are the ones who allowed this to take place. I don't think you want to see the whole picture here!

When leases were offered to the farmers for just the cost of renting it, 20 or 30 years ago, it was a different senario. Some farmers have paid substantial prices for grazing leases. I don't feel they are All getting the free ride that you imply.

[cowman]

Bombay: Of course they aren't getting a free ride. The price of the leases has risen to reflect the "exploration fees" that might be available. And you are definitely right the government allowed that to happen and then turned around and tried to welch on the deal...with the encouragement of the oil companies who thought they could get a sweetheart deal!
There are no easy answers to this problem, as Ralph Klein found out when Jack Horner and the boys buffaloed him! And hey maybe better that you old cowboys get some money out of it than the government? At least you guys spend it in the local community rather than pissing it away like the government would?

[Horse]

Well mabey I dont see the whole picture but I can see that if I bought stocks in a company selling wigets and the govmt decided that widgets are to be taxed to death or some such thing I would lose my investment real quick. So if I paid for a grazing lease and the govmt decided to do the right thing and make a level playing field for us all and at least up the grazing fees to private rates mabey I would be more sympethic.
Threr is a lot of support for these leases to be put up for bid at 10 yr intervils instead of renewal. That sure would establish a price in a hurry wouldnt it.

[cowman]

So how much are the grazing fees? You never hear what they are. I do know that the community pasture fees aren't such a great deal by the time you factor in your trucking costs. My neighbor got 25 cows into a Community pasture type deal and he figured it was a pretty good deal at $21 AUM after he'd included the price of his trucking. He was less impressed in the fall when he got 2 less calves back than what he sent!

[Horse]

Cowman the fees are 1.39 in northern alta Central 2.32 Southern 2.79 per A U M Now I would say that is a sweetheart deal And if someone wants to pay me for something I dont even own just send them over. If the govmt was to pay compensation how many leases would stay in the family but be sold for large sums so they could hold out thier hand for it. Much like suffield where the people around there were so mad because the millitary moved thier little gold mine of horses and free range out on them.

[Horse]

P S if you go to www.agri.gov.ab.ca/publiclands/publan09.html that will give you all the info as to acres and revenue.

[cowman]

Well I can't seem to get into that site. But those are pretty cheap rents...I just assumed they were higher.
So how much does a lease cost? I know of a couple of fairly large leases in west central Alta. where the grass is pretty lush and the oil activity is wild! Those ones should be worth a pretty penny?
One other question: Do you have to put cows on these leases? Could you say you were just giving the grass a rest sort of thing? I mean lets face it, on some of these leases the real money maker is the exploration fees not the grass. In fact the cows are nothing but a darned nuisance?

[cowman]

One other thing I forgot. The $4/acre drought payment last year was paid on every acre. I believe this applied to the leases too? So if you had a lease out in the desert where it takes a lot of land to support a cow the money could have been lucrative? I wonder how those payments stacked up to the grazing fees?

[bombay_43]

I can’t get into that site either cowman. Horse is correct in his fees for Northern Alberta although I believe they do change every year. However they do have a minimum of $50 per lease, so if you have a lease that is only ½ acre along your property, you still pay that minimum.

You do have to run cattle on your lease, or you loose it. You have 2 years to fence it, or you loose it. If you overgraze, you loose it. The amount of land you are allowed to clear on your lease, is decided by the crown. I think approximately 15% is cleared on my leases, and due to conservation, no more can be opened. Permission must be obtained for any farming activities, dugouts, etc. Several years ago, we were told to clean up the Canada thistle growing along the lakes and sloughs on our lease.

I own several leases, some I paid for, some I was given. I own 3 times as much deeded land, as lease land, and we also rent from private farmers,so in all fairness, I think I have a pretty good grasp of what is what.

My next door neighbor offered me the opportunity to purchase his lease which bordered mine, 8 years ago. At the time there was no payment per acreage for droughts. I believe this was a “first”, last year.

He had a lease of approximately 120 AUM, and somewhere around 5 quarters of land, including some fractions (so taxes would be somewhere around $500.00 per year). There were no dugouts as cattle had access to natural bodies of water. My neighbor wanted $40,000.00 for his lease. There was oil or gas income on that lease, that would have seen the 40 thousand paid off within 15 years or so. Providing those leases remained in effect.

This land would have allowed us to graze 120 cow/calf pairs for 1 month, or 30 cow/calf pair for 4 months. AFSC did tell me this was a terrific deal! After some discussion, I turned my neighbor down. He sold that same lease several years later, at considerably higher rates!

I have heard of several leases selling in our area, and it is my understanding that leases vary in price according to deeded land. Not all leases up here have oil and gas revenue, and one of the leases that we own, has lots of activity, but no income to us, as it was there prior to us obtaining the lease. We have had several oil spills on our lease, with no notification, even though our cattle were present at the time! Environment was on site at least twice without us being told. One pad that was reclaimed, also without notification, had the entire fence line bulldozed, allowing our cattle to mix onto the adjoining lease holders land! No they did not have to notify us, our name was not on that oil lease even though we pay the land taxes and the grazing fees! (and yes it was my fence!) It was eventually replaced, but the cattle chasing was done by the farmers, not the oil companies, and it took weeks to sort out!

As I recall, last years acreage payment was made on all rented pastures. Native pasture (grazing lease) paid 4 per acre, perennial tame forage paid 10 per acre. Whether you rent it from your neighbor or you rent it from the crown, shouldn’t matter. I made fairly good money on my privately rented pasture as I suspect everyone else did. In hind sight, I guess we should have paid that acreage payment back to the land owner??

If you are going to compare things, compare apples to apples! I certainly do not pay thousands of dollars up front to be allowed to rent private pasture, nor do I pay the land taxes, or pay for the fencing. If there is a fire there, or an accident,the land owner is liable for costs, not the renter!

Horse, your “sweetheart of a deal” doesn’t even scratch the surface! Are you upset with the grazing lease situation or the acreage payment that was paid on it?

Get out there and purchase some lease! Check with the real estates. It comes up for sale in Northern Alberta, all the time! Mine might be coming up, sometimes, it hardly seems worth the hassle!