Ostercamps article

[cowman]

Was just rereading Cam Ostercamps article the other day. In the article he says for several years the cow/calf producer basically made a profit of $200/cow(which I agree is about the average)with the last couple of years before BSE in that $50 range(which I also agree is about right...due mainly to drought and higher inputs).
This got me thinking. Under the $200 profit picture, you would need to own 325 cows just to get the same income a $65,000/yr. school teacher gets! Under the $50 profit you would need to own 1300 cows!
Somehow this just doesn't make sense?
The fact is this business just doesn't really make sense? People are not getting any kind of decent return on their equity or their labour...the fact is they are working for free or paying to work!
And we wonder why young people are running from the farms as fast as they can?

[ALICIA]

cowman: Young people have always run from the farm and then in their older age come back because the world is a mean place. BSE has just showed what the out side can do to the lives of every famer or rancher in the world.
Maybe if their had of been food safty for our livestock the big feed companys wouldn't of been aloud to use cheep protein souces in the cattle feed just to make a bigger profit. Or use the creepest grain just because some people think that if we use good grain in our cattle feed it will deprive people of the good grain at a cheep price to make their bread etc.
For the last 20 year, farm representitivees have been trying to promote that cattle can do good on cheep feed sorces that the people can't eat, well it looks to me that the cattle are paying for the cheep protein by develeping BSE and the farmers are paying because of feeding the livestock garbage.
Any living breathing thing only performs at top performce if give the best care, feed, enviorment to live and grow up in.

[farmers_son]

Typically when we see profit calculations for cow calf operations an amount for labour has already been deducted, therefore your example using profit figures would be double counting labour costs.
When you say the return on equity does not make sense is the problem returns are too low or is the value of the equity is too high? I think the reason why young people are running away from farms as fast as they can, as you put it, is the perceived high cost of land and machinery, not that farming is unable to provide a good living and occupation.
The fundamental nature of investing is foregoing cash today to have something of value in the future and there are still young people who realize the value of farm land and are sacrificing to make investments in agriculture.

[rookie]

Yes, there are a few young people sticking it out on the farm ( me for one ) but no matter which half of the glass I look at, imputs are high, return is low. compound it with an unkown bse future and middle age...

The only reason I am sticking it out for now is I can't walk away from my business as quickly and easily as a bad horse. So we'll ride things out a little more, see which way the wind blows...

Personally I wouldn't recomend it for any young person unless you have a significant leg up if you know what I mean. I am 35 and question my decision.

Thats my opinion.

[cswilson]

Ranching probably has a greater range of fixed and variable costs than farming does thus there is probably the same spread in profits. It is really interesting listening to what some outfits 'NEED' to run cows.

[cswilson]

A couple of points cowman.

When Cam wrote the paper, or when any of us want to state the negative realities of farming these days, we have ample opportunity. I will not argue with the figures.

Thank goodness, however we still live in a free country that does have choices.

I would have to guess that 90% of us farmer folk have inherited some of our holdings. The rest have built what they have with non agricultural money.
None of us can deny the tax advantages we are able to obtain on everything from land to machinery and livestock.

Most of us, like any other human, take pride in our assets, and have a driving will to keep them and build on them. No doubt there is more cash available in the oilfeild etc. but very few involved in those industries make it to the top, and have more to give their kids than the average farmer.

One of the many choices that I would like to mention is the choice not to follow the mainstream. Whether it be mainstream breeding, and marketing of cattle, or mainstream industry approach, we still have a choice.
I know of at least 6 peole (and I am sure there are more) running for positions in our ABP this fall. These people have no fear of the packer influenced veiws of our Alberta government, and will not be branded Socialist by anyone fearing the change that IS coming.
We do not have to TAKE IT. It may not be something we can change over night, but change will happen.

I am not naive enough to beleive that simple change will make farming overly profitable, but farming has never really been considered profitable. Yet we all have some pretty good thoughts about our days on the farm if we look a bit deeper.

I personally enjoy not having to wear a watch, or having someone other than my wife and kids to answer to. I like taking the opportunity to find an apple tree in the middle of the day to munch off and then lay under for a bit. Running a comb through the hair of my favourite show bull after giving him his special ration, or picking those pesky weeds from my new row of trees, are things I could not do much of if I were drilling for oil.

Money is nice, and I don't see too many farmers, especially in Alberta, who don't have any.But I see a lot of city and town people who are actually fairly jealous of us. If they had the opportunities we have been given, a lot of them would sc**** and scrounge to hold on to it as well.

We should meet down at the water hole for a rock skippin board meeting some time cowman, and plan our stategy for making this thing better. Lots of my meeting with my nutritionist, and even my banker have happened there.

[grassfarmer]

Well there's no other life for me that's for sure. It just seems the "natural" thing to do - up in the mornings, working with daylight, with nature. Being your own boss, stewarding your own piece of this earth. Yes it's a challenge - but I personally like a challenge to keep me going.
Contrast that with town or city life - noise, pesky neighbours,pollution, driving to work, bosses, stress, crime and it's a no brainer to me. That is not the way people are supposed to live. That's why they all want to "move to the country".
I remember well the scenes on 9/11 as commuters were stranded in a concrete jungle and had to start walking home to the suburbs many hours away - life as they knew it came to a crashing end. If some catastrophe hits us in rural areas we can cope, we're used to the storms and floods and we are self sufficient - a far better position to be in I would say.

[pandiana]

I agree that farming is all of those things, grassfarmer and rpkaiser. On the other hand did you know that the percentage of Alberta farmers that earn >75% of their income from farm receipts is 7.9% or that the average beef enterprise has net farm cash receipts as about 20% of their annual income?
Is it any wonder why we sometimes get frustrated that we must subsidize our work of choice with a job that pays.

[cakadu]

Randy - going outside of the mainstream and/or thinking beyond the status quo is exactly what we all have to do in order to see our way through all of this.

I'm very glad to hear that there are several running for positions on the ABP - with any luck they can make change happen. Often sustainable, successful change comes in baby steps. Getting new faces onto some of these boards is the first of hopefully many positive steps to come.

If the ABP, CCA etc. are the organizations that people come to, then use that to your advantage so that you can make the changes you want to see happen. The challenge is to find the balance and not get sucked into that political vortex so that positive, forward-thinking changes are not accomplished.

There is a reason why people are flocking to the "country way of life". (The ironic part is that they treat the country just like the city i.e. big fences all around the property, etc. etc.)

Staying outside of the mainstream is the hardest thing to do, but it brings the most reward back to you. It's time that the producer started capturing more of the value in his products and one of the ways to accomplish that is to stay under the radar, get involved in things that bring the value back to you and get involved in shaping the future.

I wish you and the others that are stepping forward every success and hope that the elections come out in your favor.

[cowman]

Well I find this thread very interesting. Always a good thing to see how others view the world?
I am sort of amazed by pandiannas figures. If only 20% of a beef enterprizes income comes from the beef where does the rest come from? Is it grain/hay etc.? Or completely off farm?
This would suggest to me that the beef industry in Alberta is in fact a hobby industry...or am I wrong?
I do know of a few big oil men who run big cattle outfits for fun and games? Doc Seamans, Greg Noval come to mind? Recently the CEO of TransCanada pipelines bought an 18,000 acre ranch in southern Alta.
I do hope the ABP elections this fall are well attended and we get some "movers and shakers" in there! And hey Randy if you were a candidate in my area I'd make the extra effort to vote for you!

[pandiana]

cowman, check out
http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/sdd7874?opendocument

These numbers refer to 2001 census, i.e. pre drought and bse.

Also check out the current numbers. Media reported that the Farm Cash Receipts for Alberta were up 8.4%. I thought this was interesting and sounded rather strange considering all the whinning cattle farmers are doing.
It seems from the numbers that the ball is now being carried by the crop sector and by hogs in the livestock sector. Farm Cash Receipts (gross) for cattle are down 21% from the average. Even this doesn't really reflect my reality with a 60% loss on cull cows and around 20-30% loss on under 30 months. Maybe I am figuring wrong.

It looks to me as though Manitoba's strong position in hogs has carried that province into the black this year.

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/sdd9027?opendocument

[ALICIA]

I know those figures just blow me away also. Because I know that me personally am down 75% or more. Also I'm not lazy, but how does more running around get you a few more cents when it costs a few more cents to do the exter running around. All I do know for sure is I did get 45 to 65 for a cull animal, now its 19 and I get $1.00 to $1.25 for a steer calf, and 3 weeks ago I got 65 cents for my top steer calf. And prices are dropping more every week.