Land prices

[hobbyfrmr]

Don't start talking all crazy about growing crops without inputs. You need to maximize inputs in order to maximize the chance of high yeilds. volume will get you through times of lower prices and/or lower quality.
The big efficient high input high yeilding farms in this area seem to be quite successful, and pay high purchase prices and rents. They grow a lot of grain. You can't pay the market high prices for land and grow mediocre crops, then sell them for lacklustre prices for very long.

[SASKFARMER3]

Their was no broker the owner is a multi millionaire. He owns a billion dollar company. No broker, why would you need one?

[farmaholic]

You're right, a fellow should likely stick to the high input low value produce model. In the past some of the local organic farms never seeded a crop, or did it just look that way, its can be hard to tell. Then when they finally put up the white flag no one wants the land and it is cheap for the conventionals to buy.

Just kidding, I'm trying to give you more ammunition to try and convince everyone that the organic model doesn't work and how successful your BIG neighbors are. You wouldn't want to over produce(no pun intended) a niche market with a bunch of new organic farmers and ruin it for those already doing it.

[hobbyfrmr]

Farmaholic, the unfortunate part is, the contrast is so severe that it becomes an "all or nothing" decision. It has been scientifically proven that fertilizer and herbicides improve yeilds. It seems like it's a game of protecting margins by purchasing inputs up to 9 months ahead of time. i am serious, though, the big neighbors sprayers seldom stop through the growing season, but man they have grain bags and elevators full of production come November. Massive amounts of grain. They are buying and renting land all the time. as time goes by, they are gaining the assets and will have quite a lot of land at the end of their careers. Farming without the inputs would seriously slow down that agenda.

[grassfarmer]

"The trouble with Hutterite land is that it never comes on the market again"

bgmb, I've heard that comment before and I always find it a strange one. Is there some quaint law in Canada when you buy land that you agree to sell it again at a later date? In Europe we farmed some of the same land for at least 300 years, many farmers have farmed the land for longer. In a successful multi-generational model the land needn't be sold -ever - so why is the Hutterites doing that a problem?

[hobbyfrmr]

Actually, the Hutterites near me bought up about 10 quarters of the very best grain land, then they sold their beef herd, the outlying calving facilities/ranch and all the pasture which was about 40 quarters.
As described above, they dont always keep everything. As I think of it, my farm, my good friends farm, my brother in laws farm and few of my neighbors farms have been in the same family name for over 100 years.

[farmaholic]

Boy, intergenerational transfer opens another can of worms. A little off topic, yet not- how many times does the same family have to buy the same land and at what price. Some are lucky enough to inherit "Silver Platter Farms" and others not so much. With the current value of farmland an outright purchase of a modest size farm from the previous generation(aunt/uncle/parents) for it's fair market value is almost insurmountable. Another interesting twist...

I was lucky but I also built upon that base.

[bgmb]

I see your point grass farmer, Like I said above I dont think it would be fair to put ownership restrictions on Huts. But we should close the tax loop holes that give them an advantage over conventional business structures.

[SASKFARMER3]

Why do we farmers think we have to sell out to our next of kin to retire. Why not save a little and have a retirement when were done and give your replacement a leg up starting out. Let them have some control then if they show they are capable let them have the reins and move on. If you raised them right it should be easy if you gave them every toy or car or thing you might have a problem if you show work for what you have you maybe figured it out.
It works better than having couple million in the bank the day you are put in the hole because your to old to enjoy travel or cant get medical coverage to go or just to crippled up to get out of here. Because when they cover you up your no different than the guy who had nothing. Ok maybe the stone on top of you is nicer to keep you down.

[phoenix64]

the following excerpt I found doing some reading and helps to somewhat explain what has happened with agriculture in the last few years, though for many was already known long ago:

"Family farms, hutterite colonies included can be large, which is the norm in rich countries, where they are getting bigger; or small, which is the norm in poorer countries, where they are getting smaller. Why the opposite trajectories? It all comes down to the number of people who want to farm.

In places where it’s hard to make money and few jobs available, people tend to stay on the farm and work smaller pieces of land more intensively. It’s almost always possible to coax more food from a piece of land if you have enough labor, though each increase in production takes a lot more work. When there are many people, and few other opportunities, you get farms that are labor-intensive and land-saving. Every generation, farms split up between children and get smaller.

In places where there are good jobs off the farm, fewer people end up working bigger pieces of land with labor-saving devices like machinery and chemicals. If farmers can earn more money working a job in the city, it only makes sense for them to leave the land. The farmers who stay are the ones who can figure out how to work enough land so that their incomes rise."

It is easy to see if the trend in North America continues with increasing amounts of wealth generated off the farm that farms will no doubt get larger and hutterite colonies with birth rates dropping will also continue to expand unless the voting public intervenes to slow this process.

[cottonpicken]

One good thing if you have debt is technically your short the canadian dollar and it's been going down,won't argue if that has been a real realized gain.

[grassfarmer]

Farmaholic and SF3, I agree with your comments. I think the idea of "silver platter farms" is wrong headed thinking, it's what sustains multi-generational farm families. Nothing wrong with inheriting the family farm, modernizing and expanding it and passing it on to the next generation. It's only "silver platter" or a "get rich quick scheme" if you cash out or squander the resource given to you.
If you can pass it on from generation to generation and finance retirements through retained profits that's a successful model of land ownership in my book. It's one of the reasons the Hutterites are successful - they don't sell the farm to their kids at full market full each generation.

[SASKFARMER3]

Bingo we have a winner!

[charliep]

grassfarmer,

You once made a comment comparing dairy quota values to land prices. Your were in a discussion about supply managed industries and people were ragging on you about the value of quota. You made the comment that 1) quota had value, 2) quotas value was based on profitability and 3) dairy farmers had to be a good manager to buy and subsequently pay for quota. You then made the comment that grain farmers shouldn't criticize dairy farmers for quota - land values were a grain farmers quota.

I hope I am not misquoting you or got things wrong but I found this very interesting. We seem to assume every farmer is the same - not the case. Land will have a different value for everyone here based on their situation and this will be different than market value.

[bgmb]

In order for farm land to be like quota the government would have to one day decide that all grain farmers in Canada were having to grow to large and take too much risk in order to make a profit. To correct this they would have to decide to put export subsidy of 20% on all grain products exported from Canada. Margins would increase for grain farmers and the price of land would go up. (assuming middlemen didnt take all the margin).

Supply management in Canada is essentially a tax on certain select food products (dairy, eggs, chicken, turkey) redistributed to producers of those products. Its sad that we are choosing to tax healthy food products to benefit so few.