Expansion?

[cswilson]

cwilson, and they are the loser aren't they ? Better a buck in the hand than ten in the stack of bales !! There are farmers like that around this area as well, but the way I see it is that its a free market. Supply and demand will dictate whether they can gauge people for their hay or land rent.
I have to compare the land rent issue to what the oil companies deal with when they negotiate right of entry.
I always found it comical that the farmer that was holding out for more rent from the oil company was the same one that came to the County's Assessment Review Board asking to have his taxes lowered because his land was not productive farmland !!! Mind you when he rented it to the neighbour it was first class land and not a weed on it !!!!

I don't really think that a lot of older farmers are rolling in dough, most of them have never lived too high on the hog and still are of a mindset that they need to put some aside for a rainy day even when they are 80 !!!

[cowman]

I often wonder how any industry can get a fair price for their product if they don't limit supply? If there is an over supply how do you get a price that reflects a profit? Sometimes supply has to be eliminated to meet demand?
When Ford over produces trucks do they give them away or cut back on production? Isn't that what we should be doing with grain and cattle or for that matter hay?
If a cow goes through the ring and sells for $50 is that acceptable? Well I guess you have $50 in your pocket and the butcher has $2000 in his, so why would he pay anymore? However if you took that cow out and treated the local coyotes to a feast, maybe next week the butcher might be willing to pay a bit more?
Of course this is on a very small scale but what if every farmer did the same thing? When the meat counter was bare(and the coyotes were fat and sassy) do you think the price of cattle might go up? Providing you could limit the government from flooding in cheap meat to destabilize the market?
Every other industry practices supply control except the ag industry. The concept of marketing boards were a good one except the farmers were dumb enough to let the government control it! As well as let quota become a commodity.
Think about it...if it was determined that the Canadian consumer demanded a certain amount of beef per week, then the industry would produce that much meat. Any excess would go to keep the coyotes happy! The price would be set so the farmer made a decent sustainable profit. If the consumer decided the price was too high and cut back...then I guess the coyotes would get a little more! Not much sense producing a product if you can't get a profit out of it? That is the road to the poor house?

[cowman]

All you need to do is look at the dairy industry to support what you are saying cowman. It is obvious that anyone intending on staying in the cattle business is gearing up to expand their herd and landbase. In this area the larger operations are getting larger, while a lot of the 200 cow operations are getting out of the business. Smaller herds are not viable given the cost of production and even a very modest living for the operator, but manpower to run a larger operation is going to be a problem given the opportunities in the oil industry .
I don't know what some of the folks that sell their herds are going to do, many of them don't have sufficient landbase to live on rental income, and their return on selling their herds isn't going to keep them going for many years particularly if they owe the banker anything.
Some of the folks that got out of the business a few years ago have been making a decent living selling hay but this year that income is going to be less given the amount of hay for sale in the provnce, and of course the rain has resulted in lower quality feed in many areas.

[cowman]

Well emerald you know what they say "The bigger you are the harder you fall!" I would say anyone gearing up to buy more land and cows is sure a gambler? I doubt the profits will ever pay for it.
But there are always optomists who are willing to risk their money...or more likely the old mans money LOL!
Personally I don't think anyone should be expanding if this includes debt? The business just can't justify a heavy debt load.
I guess if the guys selling hay realize they aren't making any money they will consider doing something else? Maybe sell it to the "expander" for a big price? Then while they are sitting on the patio sipping a Pina Colada they can sit and watch the go-getter slaving away for the bank and keeping the government in beans!

[rkaiser]

I know how to limit supply cowman. Every farmer in Canada, and the world, for that matter could quit using fertilizer for 1 year, and then MAYBE limit the fertilizer you are allowed to buy after that.

Grain supplies would be down, feed supplies would be down, prices would rise, and cow guys would downsize. All the same things would happen, that would happen if we were to move toward supply management except that it would be fair for everyone. Except of course the guys/gals who have already weaned themselves of the "drug" that shows you are the best farmer in the land.LOL

[cowman]

Ain't going to happen Randy! Although I would like to see it! Fertilizer actually is a good investment, in most years! Don't know about this year!
Example" $42/acre of N returns 1 ton of hay at $80? Not to hard to figure that one out...now mind you that is horse hay! I suspect grain has a better rate of return providing it isn't rock bottom pricing? Canola...don't even go there...it just flat out pays!
I agree with your idea of limiting production will raise the price, but how do you get EVERY farmer to follow the guidelines? Are you suggesting we force farmers to produce less, because that is the only way it will happen? I hope you aren't going communist on us? Maybe the old boys on Ranchers are right about you? LOL...don't take this seriously!

[farmers_son]

There far better ways to raise on farm returns than limiting production. Supply and demand may explain flucuations in commodity prices but lack of competition explains why prices are so low.

[cowman]

Whether we like it or not we are caught up in a spiral of costs we can't escape? To just legislate an end to high output production is not reality? The policy of government is to keep food prices low? Not written down, but very real none the less? A clear example of this is the beef imports?
Let the price of hamburger get a wee bit high and in come the imports! And sorry for all you packer haters, that is not the work of Tyson or Cargill but of your own beloved Liberal government!
Legislating the amount of fertilizer could only be done with the excuse of "saving the environment" because that is the only things the urban consumer might buy into? Of course that would only be acceptable if prices didn't rise very high? Might have to import some more stuff from some country where they used everything possible!
To think that our government gives one rip about the dumb peasants down on the farm is to deny the reality of the last several decades? We really are just a problem that won't go away!

[cswilson]

Cowman that's interesting math $42/acre returns you a ton of $80 hay-if it rains when it's growing-if it doesn't rain when your haying-if there is no hay in the country to drive the price up-oops but that meant it didn't rain. The iron and chemical boys must have fun selling to you-not even a challenge. Glad I ranch in Sask. where it's still a business not a hobby like over west of us lol.