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.
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.
Comment