When is machinery worth buying?

[cowman]

Free machinery always works! If you are letting something else pay for it, why not?
My tractor is "free" and so are my trucks!
My haybine and baler are not.
At $8 a bale you can pay for a baler. At $15/acre you can pay for a haybine.
If you have the time and the inclanation you can make some serious money. My neighbor put his haybine over 2500 acres last year.

[PureCountry]

My Dad and I did custom cutting and baling 10 years ago. One cutter, two balers, good equipment - when we started. In our part of the world, hay is not a bumper crop - ever. If you put a cutter over 2500 acres in the Hardisty area, you'd be dealing on a new one every year. Lots of rocks and just having to cover alot of ground to get a damn bale make custom haying a very tough nut to crack.

I can see your point guys about making the equipment pay for itself. I agree with you. But the fact is, it comes back to that same old line - do what works for you; and bouncing equipment over these old hills has never worked for us. Of course there may come a day when so many people are buying in their own feed that it will become very costly for me to buy it in from great distances. If and when that day comes I'll address it like any other problem.

[farmers_son]

“If and when that day comes I'll address it like any other problem.” True, and keep in mind that one of the ways to address problems of buying costly hay is to sell the cows as was seen in 2002.

I try to view my operation a number of different ways. One way I view things is I have the land base which can grow pasture, forage and cash grain crops. The cattle are in effect a harvester for the grass and forages I produce. Just a living machine that adds value to the lands production no different than a baler or cutter. So I have machinery and I have cattle, they are both necessary to harvest my production. Looking at things this way my production would not be cattle, it is grass. Is it any different if I grow grass, harvest it with a baler and sell the bale to someone else or grow grass, harvest it with a cow and sell the calf. And by the way, both cows and machinery depreciate. The cows depreciate faster and do not have the option of running more hours or over more acres to be more profitable.

[cswilson]

Actually there is kind of a business relationship between the haygrowers and ranchers here-it should be symbiotic where the guy who likes cows buys hay from the guys who like machinery but it tends to get parasitic by the ranchers in plentiful hay years and damn predatory by the hay growers in the droughts. It's impossible to make a long term deal so we just take turns taking advantage of each others feast and famine-I suppose it all averages out over time. I can see our country changing more to a feed and pasture supplier-cash grain getting tougher here all the time.

[cowman]

I can certainly understand the desire to not pound the hell out of equipment for little return. When those custom hay boys pull into a field of well fertilized annual rye they must have a big smile on their face! Never seen anything yield like that stuff...if you can get it dry!
Around here the darned moles are so ferocious you are lucky to get four years out of an alfalpha field! Too bad they can't come up with some sort of genetic disease to wipe the little buggers out!
I know what you mean cswilson! I've been on both ends!

[farmers_son]

Cswilson: Good points. For me, I have long ago had to quit doing what I liked and do what worked instead. I am just as comfortable around machinery as around cows and grain farming can be a nice way to make a living. After the loss of the Crow Rate we have been forced to focus more on cows and grain farming has become only marginally profitable. On a winter like this however you simply cannot beat being in the cow calf business assuming the weather is this great in the spring. I do think growing forages has become less profitable as a result of the loss of the Crow Rate plus the impact of the U.S. Farm Bill on Canadian barley and for that matter wheat prices. That is making it increasingly more difficult for Canadian farmers to compete with U.S. farmers for machinery among other things. We Canadians seem to have blinders on. While the U.S. farmer has been enjoying absolutely fantastic returns we are discussing how we can do with less machinery. The U.S. farmer is more concerned about his income tax situation and should he have one new pickup or a new a new stock trailer too. No discussion about having to do with less down there.

And buying in hay probably does average out over time. There is a story about the accountant that drowned in water that was only 3 feet deep. It is not the water at the edge that will kill you it is the fast and deep flows in the middle that do you in. Stability is the farmers friend as free cash flow to float the farm through a price crisis is just not available. CAIS does encourage producers to be single enterprise operators where previously there was a tendency to be diversified to help guarantee cash flow. The concern would be however that CAIS is not going to be around much longer and the program was basically guaranteed to self destruct anyway because of diminishing margins which were bound to happen as agriculture in Canada is simply not competitive with the United States whether we are growing grain, forage or cattle.

Cowman is right to point out why pound the hell out of machinery for little return. I pointed out above that cattle are really little different than machinery, just another way to harvest grass. If we stepped back and took a look we would see that we have been pounding the hell out of our cows too and the herd is looking a little rough with culls and late calvers and so on. If feed and pasture were not so cheap the cows would be a little thin too. The reality is that there is the cattle are generating only marginal returns either, at least in Canada. We are still $200 a weaned calf under the U.S. and that cannot be ignored.

[cowman]

farmers son: I think that post was pretty well thought out and states the problem as it is.
I personally don't like operating machinery much and definitely don't like repairing it, but it is an evil necessity in most cases. And yet my old Dad was never happier when going round and round! Different strokes for different folks!

[redcountry]

How things differ from one end of this country to another
We are in a potatoe growing province.

Land prices depend on "spud" prices good dry land usually runs $3.000 an acre
Provincial regulates the rotation and most are on a three year cycle. grain,grass,and spuds

Most potatoe farmers sell the first cut of grass and mulch the rest of the season.
We buy standing hay and cut and bale it ourself. avg. cut 6 bales 4x4 silage on a good year sometimes as high as 10, This past season cost $40.per acre standing plus cut ,bale,haul and wrap

At the price of land we cant pasture on good farm land so half of our cows go to community pastures one or more is available in each county

[cswilson]

I'm doing what I like and it works so it's a win-win-it might surprise you that our price is below the U.S. but our cost of production might beat them alot of times too. You can have just as much cash flow problems owning equipment as you can buying feed-believe it i've done both. You keep on a hayin'and i'll keep on a buyin'. Just out of curiosity where is your operation located.

[redcountry]

Get a map of P.E.I. and find St Nicholas in prince county we are on Egmont Bay 15klms west of Summerside

The red soil of Prince Edward Island therefore = redcountry

regards