Could this happen here? Has it?

[Kodiak]

This is a very interesting opinion piece on the state of large acreage farming in [URL="http://www.kyivpost.com/opinion/op-ed/richard-rozwadowski-rise-and-fall-of-agricultural-holdings-in-ukraine-russia-361181.html"]Ukraine[/URL]. Perhaps it has some validity with respect to farming anywhere....

[farmaholic]

Part of what I take from this is they said "family farms or "PEASANT" farmers" will work for less. It just tells me modern farms could never survive the financial demands placed on them if they were run like businesses with layers of staff and management, each properly paid for their contribution. Like we didn't already know this...LOL.

[furrowtickler]

Lol - even Sprotts money could not keep one earth alive out on the dirt - the same will happen with other investment backed farms along with smaller time local land sharks - there time will come.
My money is still on the well managed family farm - big or small

[sumdumguy]

Management is key. They pull out to seed and don't know how to take the seeder out of transport. Wheres's the manual? LOL

[hobbyfrmr]

I agree with furrow, a billionaire owned, investor financed agriculture farm in Canada, through the highest commodity price run in 25 years should have been very successful.
Broad acre seems to be hanging in there.

[Hopperbin]

Kodiak that is funny report. There is a chinese company that could take over but they need to look at the numbers. Those numbers are all wrong. 4000 times 2000 hectares farm for example should be able to take 8, 000, 000 loan. Plus ad in well an agronomist. Recipe for disaster.

[Hopperbin]

Kodiak that is funny report. There is a chinese company that could take over but they need to look at the numbers. Those numbers are all wrong. 4000 times 2000 hectares farm for example should be able to take 8, 000, 000 loan. Plus ad in well an agronomist. Recipe for disaster.

[Hopperbin]

Oh their debt level was 4000 per hectar. Mother mother.

[charliep]

For what it is worth, you can't take what you know here and apply it there. Credit non existent or when aquired, 24 % per year for a big farm and 48 % per year for a small farm. You buy inputs with cash. Mostly subsistance farms (less than 30 acres). Some farms around 200 acres. Big farms modelled after the state farms of the communist era. Some bigger corporate farms. On the east side of the Ukraine, you are almost in war zone with all the challenges that brings to both security and getting needed inputs. Ukraine government bankrupt. No government programs such as crop insurance.

Perhaps the big thing, no land ownership/equity. All land state owned and parcels provided to everyone to farm. If you are a corporate farm, you have to put together a sizeable amount of rented land with many landlords who control the land (don't own). Zero ability to build wealth via increased land values or use land as equity.

[charliep]

Hopperbin - you pay for inputs with cash. No cash - no inputs. I was careful not to ask where the money came from in the bigger farms/corporate holdings I visited. Likely something I would prefer not to know.

[ajl]

Large corporate farms have appeared and disappeared in Canadian history. Classic example is Charles Noble who farmed 30000 acres in S AB in the 1920's. There is nothing left of it today. There were many large cattle ranches in S AB years ago. As inflation gives way to deflation over the next decade we will witness many large operators and colonies become history. Japan has printed a bazillion yen and yet they still have deflation. Bottom line is government might as well stop manipulating the economy and let the market run its course but instead it will make things worse by messing with it more.

[SASKFARMER3]

This is a great topic.
In our area I had to compete against Broad Ass and One Earth. WTF it was sad to watch.
Yes they had high prices but they also were blessed with the same shit weather.
Our area has seen its fair share of rodeo participants.
We had a lot but funny thing is they all thought pay management huge dollars and then the trickle down effect.
Family farms will like small business sacrifice a lot to keep the farm or business going. Even if that means living with way less than a guy on welfare some times.
As farmers we have to deal with so many challenges. Every thing effects us.
A plant explodes in Oil and Boom price almost doubles.
Farming a plant blows up and its only a bagging area for meal and price drops as a buyer is lost.
Farming is a unique business than any other and that's what the text book doesn't show these super managers.

[charliep]

Just to make sure everyone read the article. 1 hectare equals 2.47 acres. Economies of scale they highlight are for farms 12,500 to 20,000 acres. They talk about a machinery investment of USD $400 per acre. No owned land/all rented. The question in the article is how the banks built up that size of debt.

Quote from the article.

"In agriculture, the economies of scale for large machinery are about 5,000-8,000 hectares. Beyond that size, you need to buy another 500-horsepower tractor and additional machinery. A top manager and agronomist can probably oversee 10,000-20,000 hectares, depending on how spread out the fields are. However, for more 10,000 hectares or so, other costs of supervising staff and overhead increase. More staff equals more theft and more backhanders paid for large orders by salesmen from input distributors.

This is precisely why all over the world the sustainable farm model that has developed over many years has been private family farming or peasant farming. Farms are getting bigger in the U.S. but the average size is 95 hectares and over 66 percent of farms are below 2,000 hectares. The farms in Europe are even smaller."

End quote.

[Horse]

charlep Thats exactly what I said about big oil more theft,payoffs management(consultants). Too many desks and no one realy minding the store, take all you can get while you can.
Sask3 You have to compete with investors that may or may not pay off thier bills but they contribute to the surpluses and cost of production. I was In the cattle buis and I had to compete with all the welfare cowboys that the gov seen fit to pay them to graze thier cows on crown land , well I finaly said ****em because when I took my calves to the sale those with welfare cows were at least $200 ahead of me pluss mabey a whole lot more if they have oil revennue (60%) have it.Anyway I can survive as my land is paid but it sure pisses one off to try and compete.
Does anyone know if the foothills of alta waldron grazing ass is on deeded or crown land that the nature conservitory of canada just paid 37mil or app $1200/acre but still have all the rights of ownership go figure. Sell it but use it in perpetuity.

[charliep]

Perhaps my point was you can't compare what is going on in the Ukraine to here. Labor is cheap/available/used in mid to large farms. Having an agronomist on staff is normal. As with Canada 50 years ago, the Ukraine is going through a process of increasing farm sizes. The start is less 20 to 30 acre subsistance farms. Just like here, there are going through a process of determining what size a viable farm business is including its financing.

The business commented the article is about is 150,000 hectares or 375,000 acres.