Thinking...?

[cswilson]

cwilson, I got rid of the haying equipment when it was fairly new, and have bought feed ever since. Some years it was tough sledding but this year makes up for it.

[farmers_son]

All things being equal, the profitability of raising grain, hay, livestock should be comparable. Given the nearly pure competitive environment non supply managed agriculture operates in, comparable would just about be the same as saying no profit at all in either hay or livestock production. In a normally functioning market the producer of the hay should be making about the same return as the producer of the livestock. And the producer of both hay and livestock should enjoy benefits from the synergies of being self sufficient in feed.

There are benefits from being a single enterprise producer due to the economies of scale. Whether that benefit offsets the cash flow risk associated with giving up the ability to grow your own winter feed and being forced to routinely participate in a commodity cash market with unpredictable price fluctuations is a decision that is up to each farm operator.

In Canada, I see two things which could account for the production of forages being less profitable than the production of live cattle, at least in the short term. The loss of the Crow Rate and the U.S. Farm Bill. Both tend to drive down the price of our domestic barley. I would suggest that the price of forages work off the price of barley. This would tend to make the production of livestock more profitable than the production of forage and may explain the benefit Cswilson is realizing by focusing on livestock production and leaving the growing of hay to others.

If the production of forages is truly less profitable than the production of livestock I would wonder how long that can continue before the market adjusts. Either the price of forages would need to rise to counter increased livestock numbers or the profits from raising livestock should decrease due to tighter forage supplies. I would think the price of domestic forages cannot rise due to pressure from the U.S. Farm Bill. Worse case scenario, the domestic production of forages and grains decline due to competition from heavily subsidized U.S. corn. The domestic production of forage and grains is replaced by higher livestock numbers. At some point our industry would become dependent upon U.S. imports of corn limiting further growth in livestock numbers. The Canadian livestock industry would have lost the ability to grow at least some of its feed needs.

[cswilson]

Wow that was the longgggg and short of it-farmer's son you should meet one of the most successful ranchers in our neck of the woods. A management guru was giving him the business about how to improve his place-he looked him the eye and said'sometimes I just like to go moose hunting' lol. Ranching is like most businesses-pretty simple actually-make more than you spend-works in feast,famine or the in between years.

[farmers_son]

I probably would enjoy meeting your rancher friend. Heard the moose hunting story before but that is OK, it is a good story. If ranching is so simple why do we see problems in agriculture such as people leaving, fewer and fewer young people wanting to make their living from agriculture, increasing levels of debt, insufficient profitability for intergenerational transfers and so on. I think running an oil company is a simple business, just keep on cashing the cheques. Running a successful farm or ranch anymore involves a level of management sophistication that our fathers never had to deal with. While there is a time for hunting moose, time also must be made available for planning.

Something to think about...If you are finding it profitable to increase cow numbers and buy in hay, how long before your neighours clue in and do the same?

[rkaiser]

The thing is f-s, we all start from a different place on the racetrack. Sometimes the hardest woking, most efficient farmer never had a chance from the very beginning. I like Mr. Wilson's attitude about cost cutting but some of us simply don't want to live that way either.

Choices, fortune, and finally management sophistication is what I beleive it's all about.

Aside from that, those of us that choose to spew our views in public or semi public settings are those who are not afraid to change to make things work. Don't know of many agrivillers who have bit the big bankrupcy banana yet.

I truely hope that those readers that don't post are listening to bits and peices of cowman, farmerson, Mr. Wilson and others who are not only survivin, but changing and progressing every day.(all in their own way)

No Mr. Wilson, I ain't suckin up. I honestly beleive that you bring a lot to this board.

[farmers_son]

Now I am worried I came across as being critical of Cswilson. Hope not. If I was being critical of anyone it was the various ag departments that encourage us to calculate our home grown feed at market cost which I think tends to move us towards short term thinking rather than take the long term view. Really the thread started off about rkaiser having cows custom fed anyway, not about Cswilson buying hay for his cows.

I do know Cswilson personally. I can assure you that I think Cswilson knows what he is doing or I would not be inclined to compare what I am doing to his operation. Basically what I am doing if I compare my operation to his or rkaisers is benchmarking. The thread started off with Cowman’s comment “I'm still not sure if Randy is doing the right thing but I'm starting to think he might be on to something?” Exactly so and Cswilson might be on to something too. I do think the issue is do you produce the feed for your cows in house or do you outsource your feed. It is worth thinking about.

[cswilson]

The sad part about ranchers farmers_son is that even if you had a breed,management system,etc that garantedd them to make money every year undewr any weather or market they all still wouldn't embrace it-so not doing somethging because soon 'everybody will be doing it' isn't really a valid argument-ranchimng is one of the last bastions of agriculture where you can use youir imagination and make some changes in your operation-not too many cookie cutter ranch operations out there.

[cswilson]

farmers_son you know me personally now that is news to me lol.

[cswilson]

Well Mr. Kaiser I'd never accuse such a worthy debate opponent of sucking up and feel free to be critical farmers_son-god knows I'm guilty of that myself. The big reason I buy my hay is that I have a deep and abiding hatred of machinery-the less I have to do with it the better.

[PureCountry]

"...the less I have to do with it the better."

Amen wilson, amen.