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.

[grassfarmer]

Wow Cakadu, land in your area has appreciated from $600 to $1800 an acre in 11 years - that was quite an investment. The land has appreciated by @$100/acre/a year or $16,000 a quarter. I know it doesn't pay the bills today, only the business conducted on it can but it is still building your asset base. Of course like all investments
"the value can go up or down - past performance is no guarantee"

[grassfarmer]

I'm with you PureCountry - nothing would persuade me to do anything other than ag. It's a way of life you can't beat - who wants big wages working for someone else and being in the rat-race?
The way I see it they get their jobs from someone else and they can be taken away just as easily. So much of the big wages gets squandered on garbage anyway - new cars, new houses, new consumer toys - none of that is worth as much to me as the creative challenge of food production and ongoing land stewardship. I think I'm doing the best job in the world.

[carebear300]

I too have had the priviledge of producing food for the last thirty years. For the most part have loved it but am getting tired of working like hell to pay all the rest of the parasites that live off us dumb farmers. I mean when your accountant at twenty five years old drives a way better vehicle than you and wears a better suit every day than you own it is time to give your head a shake. My early retirement package will consist of a little hunk of dirt out in the cemetery. I lived my life the way I chose to but I would hope the individuals that take over from me are more fortunate monetarily wise. Remember that we aren't serfs we are supposed to be independent business men with at least a reasonable opportunity to achieve a good standard of living.

[cowman]

Purecountry: You keep dreaming! Life is a funny thing...you need to have a dream, if you will, to move forward. Life really isn't about getting from point A to point B and then figuring well I got to where I was going so now I can quit! It really isn't about whether you win or lose, but how you play the game? Because the game or journey is what really matters not the end result! Maybe I'm just babbling and not making any sense...
I believe one of the great benifits of being in this life is that a person is free! Free to fail or free to win, but free. Captain of your ship, master of your destiny sort of thing? And I also believe every human being longs for that? I also believe there is a great satisfaction in being able to survive where others can't and to realize at the end of the day you gave it your best shot(whether you win or lose!).
Now grassfarmer don't be knocking the "consumer garbage"! It may not be everything but it sure is nice to have the "toys"! If it was all sweat and work it could be a rather boring world?

[cakadu]

The best things in life are free! We are bombarded daily with how we need to have all these "things" in order to have a happier and more fulfilled life. You know what - money doesn't make you happy at the end of the day, it doesn't take away the loneliness nor does it make you a more balanced human being.

Consumerism is running rampant and as a society are we better off for it? Look at how many people are unhappy because they don't have the right clothes, car, school for their kids and the list goes on. People are facing bankruptcy every day and yet they have to have that last pair of designer shoes because it will help them "look good" to people they don't even know.

As I age, protecting what we haven't put a price tag on like the environment, the biodiversity and being sustainable so that the grandkids of all you folks can have the choice on which mistakes to make are all far more important to me than any big honkin' SUV will ever be.

Dreams are what keep us all going - without those, it would be a dreary existence to say the least.