Wondering about this?

[coppertop]

cswilson, there have been posts by farmers in other areas complaining or advising the rest of us of the hardships they are enduring in the industry.

I have never felt they were whining. Granted, there are some folks on this site that complain about everything but they aren't the majority, and hopefully you don't lump all Alberta ranchers and farmers into one group...

[blackjack]

...well cowman the heavier feeders went up 50 bucks last week...now if only those darn steers will go up another 450 bucks so i can buy me a new truck and the gas...

[farmers_son]

Cswilson raises some important points. “The more you have-the more you need-the more you need-the more you want.” I believe that is true of everyone, whatever their occupation or where in the world they live.

“If you don't think you can make it ranching there quit-land values are high-go do something else.” High land values in Alberta, at least partly fueled by an overheated energy sector, are causing quite a bit of concern for those who are looking to farm or ranch and need to expand. Yes they could move to Saskatchewan and buy some very reasonably priced land. Our ranching community could also move to the United States where cattle prices are much more profitable than in Canada; they could enjoy the fruits of protectionism and pretend BSE does not exist just like their southern neighbours. In today’s world goods and services move around the world but people are not as easily mobile. Especially for farm families their ties to their land are strong having been built over generations. There was a mass movement of people off the land in this area during the 1930s and many went to the Peace River country. Are things at the same point today…I do not know. One difference between today and the thirties is in the thirties the land ended up being farmed by the ones who stayed while today the land will end up being owned by someone out of the area who will farm it as an absentee landowner. I think that is an important distinction and it probably is happening in Saskatchewan too. What will be left?

Cowman made comparisons about the price of gas, pickups and calf prices. The price of a commodity like gas is impacted during times of war. During the 1973 war in the Middle East, crude prices tripled. The fall of the Shah of Iran in the late 70's again increased prices, as well as unprecedented volatility. The Irag-Iran was caused prices to rise. When Bush attacked Iraq the handwriting was on the wall for energy prices.

As for the price of a pickup…General Motors lost 1.3 billion in the first quarter of 2005, a further 1.2 billion in the second quarter of 2005 and yet a further 1.6 billion in the third quarter. If they keep loosing money at that rate they will soon be able to call themselves farmers. I should send them a pair of coveralls and a ball cap so at least they can look the part.

The economy cannot withstand high energy prices such as we see for any length of time before it grinds to a halt. And when we realize that many sectors of agriculture went into the high energy prices after a period of sustained economic strain the collapse would be expected to be seen there first.

Getting back to Cswilson's comment about the more you have the more you need. We may all be having and needing a little less within a couple of years.

[roly]

In Saskatchewan gas is $1.10 a Lt it has cost me $520 to put my car on the road and a 640 acre farm is $300.000

In the UK gas is £1.6 ($ 2.24 ) a Lt it cost me £915 ($1910 ) to put my car on the road and a 50 acre farm is £450.000 ($939.000)

Yes the grass is greener on the other side

[roly]

In Saskatchewan gas is $1.10 a Lt it has cost me $520 to put my car on the road and a 640 acre farm is $300.000

In the UK gas is £1.6 ($ 2.24 ) a Lt it cost me £915 ($1910 ) to put my car on the road and a 50 acre farm is £450.000 ($939.000)

Yes the grass is greener on the other side

[farmers_son]

I have been to the UK and the grass was real green over there, literally.
Beautiful country, nice people too.

[blackjack]

...and f_s that is what will happen...more absentee owners...while cswilson is stuck to his piece of property those other native saskatchewan dudes out working here in alberta will go back and push his land values up above what his cows will be able to afford...then he will be stuck wondering what happened when his low cost efficient cows can't compete with the businesses from other industries...one thing horse is right about...along there is a tax dodge for those that make money outside the business of farming ...there will always be people willing to run a cow to beat the tax man...

[coppertop]

I think in Alberta we need to do a realty check and recognize that we are a lot better off than we were before BSE, not in cash flow but in land values.

When I hear roly compare land and gasoline values it does make me realize that we are very fortunate here.

[kpb]

roly, I don't doubt that the prices are much higher in Britain but cattlemen there are not trying to make a living off of 50 acres without government support. Here we are attempting to maintain an industry that does not receive regular government subsidies. We would like to keep it that way if we can.

In regards to land, farmers_son, it has always been so that ranchers move from an area that is becoming popular and developed to areas that are cheaper and far from towns and cities. The reasons 100 years ago are the same as those today--cheap land is the only way to make a profit raising cattle. You don't have to move to Sask. to do this--there is lots of cheap land in northern Alberta. I think the secret to success in cattle country is to run an extensive, paid-for operation on lots of cheap land with efficient cattle that calve in the spring. Hire someone to custom cut your own hay on unfertilized hayland. Feed with a half-ton and a bale hauler(or like cswilson, with horses). Raise your own replacements.

Your costs would be next to nothing--no transportation costs to pasture, no land costs, no machine costs, custom hay cutting and baling will cost about $10 a bale so, say, $60 to feed a cow over the winter. I think your margins on this kind of operation could be $400 per calf.

If you bought a ranch in northern Albert for, say, $800,000, you could run 250 cows, feed them and, with current prices, net out, I think, more than a 10% return on capital.

I think that will work. I don't think running cattle on a section in central Alberta where the land prices are $2,000 an acre and rising and you've either got to buy winter feed or transport the cows to summer pasture and pay pasture rent of $30 a month, then ship them home, will work anymore. Sure if your land is all paid for you and you've got no kids you can scratch out a living. But you're really only deluding yourself because all that money you could get out of the land is not generating a good return. Or at least not the return you can get somewhere else or in a comparable investment.

kpb

[rkaiser]

The land of illusion Mr.Wilson, the land of illusion.

Drove into town this aft - and saw the illusionists in action. Multithousand dollar tractors pulling multithousand dollar machines,putting mutithousands of dollars worth of fetilizer (soon to be followed by multithousands of dollars of chemicals) on their land telling those who look on that they are actually making the money to buy all this stuff with the comodity that they are producing.

Not much better at the action market where the new pickups pulling aluminum trailers leave the same impression on the town folk. Across the street at the diner, the restaraunteur pulls the best magic trick of all, setting wonderful D1 cow beef in front of a customer with more wool over his eyes than the broke back cowboy himself.

Alberta, the land of illusion.

[grassfarmer]

Good posts kpb and rkaiser. As you say kpb, rented land or grazing arrangements looks to be the big opportunity here in the future. I know I have enough of a landbase that I won't be in a rush to buy more land - the opportunities to rent, graze, buy feed around here are commonplace if you are prepared to think outside the box.

I think the subsidy issue is actually a bit of a red herring - the money paid out is all bid into inputs, land prices, fuel , machinery etc leaving no great benefit to the producer. I know friends of mine with a large, high quality operation in Scotland running 450 beef cows, 1000 breeding sheep, growing all their feed and fattening all their progeny got the equiv. of $293,000 subsidy this year. That may look huge to readers in Canada but believe me I would rather be farming here than there - you really are no better off at the end of the day with these seemingly huge sums.

[pmckenna]

We sure have a lot of land under water in Alberta this year. Outcome unknown.

Secondly, why not to rent out land to larger operations? It's time has come. Business for lifestyle may not be always viable in all cases.

Keep the land (it'll only go up, we all know that) and let specialists do the work, at least for some.

Any comments about this?