Speaking of costs?

[cowman]

When you sit down and try to figure out your net worth how do you do it? Do you figure like okay I have 1000 acres and they are worth $1000/acre so I have $1 million in land. 150 cows@ $800/cow so I have $120,000 cows, machinery worth $200,000 etc.etc. you know all the assets? Deduct the debts and come up with your net worth?
So say your total is $2 million. What kind of a return could you get on that $2 million if you had it in a pretty secure investment fund? Would 6% be in line( I know some investment firms quote high returns, but I'm talking secure here)? 6% of $2 million is $120,000!
So I would suggest that to be realistic you need at least $120,000 net profit just to break even? And hopefully we would expect to get paid something for our labor and risk right(or else it might be more enjoyable to sit on the beach in Cancum, sipping pina coladas)? We won't be greedy...say $40,000? Now we need to make $160,000? Well I don't think 150 cows are going to do it unless they are darned efficient cows and somehow I don't think $2.30 barley is going to get it done either?
Maybe I'm looking at this the wrong way or something but it seems to me somewhere along the line I left a lot of money on the table trying to feed the Canadian people?

[carebear300]

But look at all the fun you had cowman, just kidding sorry couldn't resist. Our industry has been the most rewarding to us in the non monetary and intangible things, but the money part has been disgraceful and in fact should be an embarassment to all levels of government and society that have fed off of the hard work of farmers.

[k-way]

You tell 'em cowman! The consumers are complaining about the prices now? Just imagine how much they would complain if they had to pay the ag industry what their products were actually worth! Some days it gets a little old to hear about how you chose to sacrifice to be a farmer just for the way of life!

[k-way]

Right on cowman! Solving all the BSE, CWB, and farm subsidy programs in the world will still not get us to the point where our income is equal to the girl who owns her own hair salon in town. How do we get that message out?
How do we get society to take farmers seriously? How do we let them know that we are business men, not begging redneck dogs?

[kato]

Quit providing food. Simple. Cruel and effective.

The thing is, we are not those kind of people.

Too few appreciate that fact.

[grassfarmer]

Cowman, of course you are right with your thoughts on farming income versus selling up and investing the proceeds elsewhere - it's something most of us think of on the down days when things aren't going well. The main cause of the situation is land prices being too high relative to productivity. To counter that though you can count your land as an investment as well. If land is worth $1000 an acre now what did you pay for it ten, twenty, sixty years ago? Inflation in land values helps us in this case but you don't see it until the day you sell up.

[bombay_43]

I hear exactly what you are saying cowman!

Those of us who have worked hard and made sacrifices that other working stiffs wouldn't make, just to "CUT COSTS" so we could farm, are all in the same boat.

Unlike PureCountry, although his youthful outlook is reminiscent,(and refreshing) I don't care to continue living the way I have been, until I die! Probably when we were his age, and immortality was far down the road, doing without, didn't seem too bad.

There was no place like the farm, to be together! Still isn't. Maybe the idea of "living off of love" actually seemed possible. Great idea, not too easy on the pocket book though!LOL

We are not going to go broke over BSE, and I suspect many others are in the same situation, including yourself. Rather we have to weigh out how much MORE money and equity, we are willing to loose, before things turn around again, or we simply quit!

Cancun starts to sound better and better!

[cakadu]

There are factors driving up land costs and in just a short time.

Out where I live in West Central Alberta, when we bought our land 11 years ago, it was running about $500 - $700 an acre.

Flash ahead to 2002-2003 and ridiculous prices were being paid - in the $1,600 - $2,000 per acre for the same land - nothing had changed on it or with it.

The reasons for the jump were many, foreign money coming in and paying whatever was asked, people with too much money just wanting a country place, speculation and the list goes on.

We tend to value things based on what we could get if the market were perfect. We go and buy things based on the outlook at the time and banks lend us money on the potential.

We are overcapitalized and many do not know their actual costs of production. Understanding risk and managing for those risks is essential in this game, especially if we are treating farming like a business.

[PureCountry]

Bombay, the way you and some others talk about farming/ranching, it is quite obvious that agricultures lowlights have taken their toll on you. I understand what many of you say, and I would never dream of disrespecting you by scoffing at your opinions or outlooks. Hopefully, with my beat up old bale truck, no tractor, and hairy little cows, I can continue to ranch and raise a family while getting by 'with less'. For us, getting by with a little or a lot less than our friends from town or in the oilpatch is the only way; if we want to keep this lifestyle. Maybe there will come a day when I'll look back as all our kids go out into the world and wish we'd just sold out when they -and us- were young and full of life. But I sure hope that day never comes. I hope I see the day when my kids are taking the reins and spurring on, and thankful that we got by with less. As my wife said, people used to work to make a living, now they work just to live. Work is all they know, and they know nothing of life. If I have to get by with less, not poor, just less, in order to keep my kids from falling into that, so be it. I know I still sound like I'm dreaming, but dreaming's got me this far, and I hope it leads me alot farther.
Good day.

[bombay_43]

Purecountry; I hope you are right also, but I fear you are wrong! Perhaps the fact that you have prior generations,(I believe you said 6), to help you along, is an added bonus that some of us have not had.

It was only yesterday, that I too had dreams remarkably like yours. We raised our children on our farm (first generation), and don’t even talk to me about old truck! That is all we have ever had. We currently drive the best we have ever owned, a well used 1993 gmc, and darn proud of it!! All my children drive newer model vehicles than us, make more money with less hours than us, and the one son who wanted to go farming, we finally talked out of it! Thank goodness!

No, this was not our dream for them when we started farming, but it is the reality now. Two of my sons, who are younger than you, put over 10 thousand into their RRSPs this year alone! Perhaps some day they will return to the farm. After all it is a wonderful place to live on but Not off of. My kids will make out just GREAT! I doubt that you will ever be in a position to put away those kinds of RRSPs. My point is, you should be!

My kids are without a doubt good workers, but they did not have to invest in land, cattle, and machinery in order to earn their income. They have paid holidays every year, sick days, company benefits, bonuses if the companies do well, etc. Do you really think that a farmer works less or deserves less? Do you think that because the farmer did not go to University to learn his trade, his work is worth less?

You have to realize that the bitterness you read out of these threads, comes from years of hopes that were pinned on Agriculture! We don’t live in your mansion that you refer to, in fact you are welcome to visit us. Our philosophy has always been, “It is far better to sit in an old house and laugh, than to sit in a mansion and cry”.

My home was a built in 1941, and although we often wanted to build a new house, the farm and its needs came first. We had natural gas on the place when we moved in, but when costs exceeded what we could pay, we started to heat our home with wood and continue to do so. It gave my kids character! (at least that is what we told them) Now, when we probably could afford a better home, I have no desire to leave the home where all my children have been raised. We needed it when our kids were small, not now.

We have survived the early 80s when interest rates in the banks exceeded 25%. It set us back a lot of years, but we made it! We survived BVD outbreaks in our herd, which would have wiped most out. We milked a cow all the years the kids were growing up, we raised chickens for meat and eggs, we grew a garden, up until there was no longer any time left to do that, as spring seeding and harvest saw both of us in the tractors.(our first tractor was an R-John Deere) We will overcome this BSE as well.

I wonder how many of you young farmers would survive if you had to face interest rates of 25% today? Cut costs? Let’s talk in 10 years.