Equity Needed by a New Farmer

[JDGreen]

Not trying to be critical or disresepectful, but I understand the area that zee speaks of. Tough area for sure. What I dont understand is why we fall in love with certain areas of the province. Example wanted my father and I to sell out in 2004 and move to the SE. Could have sold 20 1/4s and bought 60 of higher assesed ground for same money. Would have owned as many as 80 outright by this time. The particular farm had 17 wells on it at time it was for sale. I can only imagine how many are on it now. There is always lost opportunity and the old adage of hindsight being 20/20, but without taking a chance and going for it you will never know what could have been. There is no such thing as success without failure first. This will cycle again for sure and those left with the skill set to farm and manage will do well, Patience is key but its tough when you feel your best years are being wasted. Im not sure about other areas of the province. but in this area it seems that 75 is the new 40 and no one retires, sell or rents unless it is 10% above the top of the highest market at any point and time. Could probably still sell today and double land base in other areas, but am now to the age that it doesn't matter anymore. So instead keep driving the market higher picking at them 1 quarter at a time. I am in certain ways as much part of the problem as the old fellas refusing to give anyone a break. At the end of my day if my children aren't interested someone will get a break. I am done at 60 and will rent it out and cruise. I have yet to figure out why anyone 65-70-75-80-85 years old would want to do this. I envision renting it out to a good neighbor and helping during seeding and harvesting. Rest of the year hello Hawaii, Arizona and anywhere else my travels take me. Life is to short, live today like it may be your last.

[wd9]

Farming is like royalty, you are born into
it, or marry into it.

Hopperbin, curious q, why wouldn't you
throw in the cost of 1 bushel of canola
difference and just farm it at the higher
price?

[freewheat]

I'll buck the trend here.

Sure it can be done. I have been doing
it myself. You just need to close your
eyes when you are in the field next to
your punk neighbor kid, with his 84 foot
independent shank drill and tractor
unit, (bought by daddy), which is worth
more than your entire machinery lineup.

I mean, the young punks these days have
such a ridiculous expectation of
farming. That everything needs to be
shiny and new. That they must keep
getting more, more, more. More land,
more machinery. Guess what? I have a
combine worth 30 000 bucks. My seeder is
worth 25 000 bucks. My tractor 50 000. I
grow good crops. I have small machinery
debt payments. I have trouble watching
the way this farming is going, but I
will stick it out. I want to simply make
a living. I am not competing against
anyone. I am not freakishly infatuated
with more, more more. If a guy HAS to
have 5 000 acres to survive, I am gone.
I can survive on a third of that. Why?
Because it is not necessary to farm that
much to make a living, contrary to
popularly held belief, and the false
ideas promoted by most farmers, and
almost every farm magazine editor out
there. Yes, you need to be a certain
size to farm how they make you think you
must, with flashy machinery, and
lifestyles. Because these things need to
be paid for. Our grandparents would
think we are all nuts, living like we
do, with the expectations we now have.

So yes, a half million bucks could get
you a dam nice line of decent machinery.
Heck, half of it would. You just need
some land to rent to get your foot in
the door, and then buy land slowly over
time.

The trouble is, no one hardly wants
anything more than 5 years old anymore.
I grow as good of crops as my neighbors
with their drills worth ten times what
mine is. They wouldn't even be caught
dead in my main tractor doing sc****r
work, grain cart work, etc.

Guys, it is also about attitude. And I
think it can be done. I am living proof
it can be done, providing I grow a crop
this year. IE(no flooding problems
again)!!!

So yes, Charlie p, half a million could
do it, and do it well, unless you have
the attitude that you HAVE to farm 5 000
acres just to be viable, have a love
affair with new iron, or such a negative
attitude that anything over 5 years old
is a travesty to run.

I will leave it at this, but I will
leave you with a small example of how
ridiculous I think this racket has
become. We are getting so pampered, so
lazy these days. Guys are putting lifts
on their fricking air carts to load
canola. Because they don't have the dam
time to back up the truck and clamber up
a ladder. Because it will save them a
few minutes, and a bit of sweat. So that
they can farm that quarter across the
road, I suppose. We would do well to
give our collectives heads a shake here
and there.

I, for one, will continue to buck the
trend.

[farmaholic]

Freewheat: I admire your determination. With a strong will and determination anything is possible. Rome wasn't built in a day either.

[zeefarmer]

Don't worry, I will work together with my brother. My
dad is nearing 60 and is wanting to slow down in the
next few years. We are going to sit down in the near
future to figure out what we are planning to do with
the land we do have now.

No offence, but I don't want to be a manager for
anyone. Responsibility with little reward. I am way too
fiercely independent to want to manage for someone
else. I have my own ideas and don't know if I could
micro-manage and do the high-inputs game that
most want to do. I want to give back to the land, not
push it and abuse it trying to get max $$ out of it.

I am not in farming with the goal to compete or be
the biggest. There are enough cut throat screwballs
around. They can fight and compete amongst each
other. I do not want to farm 60,000 ac like the new
big guy here that has 30,000 now just because his
"friend" in Moose Jaw farms that much. I will farm
because I enjoy it. I will farm because it is a wonderful
lifestyle and I can't think of doing anything else.

With that said, if I think there is too much risk for the
reward (which I believe is the case RIGHT NOW for ME
and MY CURRENT SITUATION), I have no hesitation in
doing something else. It has taken me a while to get
to this point. These 60 and 70 year old farmers that
are buying and renting are thinking only of
themselves and aren't giving me a chance to get a
started can sell their land that they bought for a
pretty penny to the investor or Hutterite colony
because there won't be any young guys left. They are
the ones killing the "family farm".

I believe there will be an opportunity down the road,
it is only a matter of if I am patient enough to weather
this crap if I will be able to capitalize on it.

I am not intentionally bashing anyone. I am not that
kind of guy. I commend anyone who has a working
business plan. I get irritated when the guy that farms
100 quarters says that if he can't make it farming that
much, he will farm 150. Heck, I make a decent
amount off of renting 2 quarters. I should say I get
irritated at greed.

[ALLFARMER]

I have no problem being greedy, I go as hard as
I at all possibly can. 1.3 million dollar farm and I
drove log truck night shift all winter. The old man
taught me well the only thing he could...work
ethic.

Money & wealth are....insurance.....don't see
anyone bad mouthing insurance now do you.

I started 15 years ago with near zip, I never at
that time dared dream of having the outfit I do
today.

[riders2010]

Good posts, but the big if is how much you can rent and at what rate. 500,000, if you spent 100,000 to 150,000 not sure you'd get bins in that but anyway leaves you maybe 400,000. At todays land prices 2 maybe 3 quarters. You need to to be renting a fair bit to pay for that equipment let alone the land payments and then the rent etc. If you luck out with bumper crops each year yeah man go for it but there is also financing of inputs etc.

Zeefarmer is right the risks are way out of line for what there really is. Funny how when the 500,000 is used there is no mention of the inputs when that is really the killer or maker. Your hard assets are still there, when you throw fertilizer and chemical on the ground it's gone, if there is no return you can't walk into the bank and say yeah my land is this much and oh yeah I just blew 300,000 in spray and chemical last year so how much does that help my equity.

If you have 500,000 in your pocket unless daddy has an enheritance going your way when he croaks put it somewhere else.

[hobbyfrmr]

There seems to be a common theme here.
Managers will be scarce but it won't matter, the
new farms will have access to large volumes of
cash.
In the meantime, as suggested, work with Dad
and bro as a unit, find out what direction everyone
wants to take. If its opposite directions then
consider placing your money elsewhere. If you
can buy a quarter of land, you can buy a house in
the nearest city. You can rent out this house and
make some revenue that way.
As described also, you may consider to re locate
your farm and strike out on your own. Personally I
would step into a city property for diversification.
When farmland becomes more available, you can
always sell that house and buy the land.

[furrowtickler]

Good posts, zeeman stick er out. There will be alot of opertunities within 5 years. The overhead on some of these farms will crush them eventualy.

[rook]

Charlie I'm not going to give you a dollar amount number because there are too many variables. Instead lets compare with other industries:
- you say your new enterprise doesn't want off-farm income. If we compare this with the city, usually both parents work. So why shouldn't we allow off farm income in this scenario?
- farming would be classified small business. In general, most small businesses are 'overnight successes' that were 30 years in the making. Farming is no different.
- there are many family business experts out there who say that the third generation of family businesses is often when the wheels come off. I've seen this with my off-farm cousins and friends in the city. There are also lots of third generation farms out there where the wheels may be about to come off too. It takes a different skill set to start a family farm and pass it on to your son(s) than it does to manage a huge affair with cousins, spouses, urban partners, divorces, and millions of dollars up for grabs...

bottom line, most economists or consultants would lump all grain farms together because they're in the same industry but in reality there are as many different business models as there are farms. And I think there's room in the marketplace for all of them, including brand new start-ups.

[uneducatedbum]

If it was easy, everyone would farm.
It's a great life. Can't imagine
anything better...now.

Now, I'm not sure anyone here remembers
the 90s but high interest rates and low
commodity prices aren't fun. I would
have loved the opportunity to go work
off farm then...but there weren't any
jobs. We weren't thinking about paying
off the farm with our next crop, we were
just trying to pay our next bill. We
battled through it caught a couple
breaks and now we have something but it
took time and it wasn't easy.

My advise, get in now, get as much fixed
interest rate debt you can, klench your
buttcheeks and hope for good weather.

[zeefarmer]

hobby,

Already have a rental property. Nice little 2 story townhouse that my wife and I used to live in before we moved to our current location. Have tried to sell it, but people backed out the first time, and the second time the couple separated during the process, and now the single mom is renting. She would like to buy but can't get a mortgage on her own.

That being said, I don't like renting it out. We have had excellent renters (people we know well) but it is a hassle at times. We are renting it for about 60% of what we could be renting it for. It is paid for and the bills are covered by the rent. I could and want to use the equity in there to put towards land or machinery, but the lady is going through a messy divorce and I want to help her out as much as possible.

I guess that is why I find current situation frustrating. I want to get ahead and go hard towards the goals and dreams I have, but there are alot of people that are alot worse off than I am. I want to be able to help others out, not to be strictly focused on or handcuffed by debt or the obligations that come with it.