Canola crusher Renting thousands of acres north. Of valley in Saskatchewan!

[mbratrud]

I'm pretty sure they will get tired of that after a year or 2 OR will be a huge operation within 10yrs. Its a free market.
I agree with the poster that discussed value added but just in reverse. From their perspective i'm sure they are concerned about supply of product just like we are concerned about land supply. The more foreign or large corperate consolidation the larger the larger the threat.
Even though I don`t particularily like the competition, I wouldn`t change our way of doing business.
Don't be surprised to see more of this in the Future.


So SF3 are you saying if a group of Farmers got together, and made a good business case to build a crushing facilty in JRI and LDM backyard. That would add good value back to your farm you wouldn't do it because you wouldn't want to mow their grass so to speak?

[BTO_farmall]

God Bless You Saskabush,

Louis Dufus is Shootin Themselves in The Foot. Here's The Numbers, Why. Say Theys Crushin 2500 MT per day = 110,231 Bu per Day/30 Bu Yield to Thee Acre = 3674.37 Acres per DAY Theys Roughly Crushin. As Yous can see, Theys gunna needa Be Farmin Alotta Land just to Maintain Crush. This is a VERY Bad Business Plan on Their Part. F#ck em', Just Haul Right on By and Dump in Richardson's Pit!!!!!!!!!!!!!

[samhill]

I think they'll get a new appreciation of what canola is
worth.

[phoenix64]

Jeepers boys make sure ur expressing concerns
to ur local elected officials! Farmers put these
guys in govt....we can take em out!

[Hopperbin]

At first glance renting a few thousand acres is a drop in the bucket. Some day Sask3 may come the day you or your offsprings will want to rent the land out due to what ever reason accident etc. Can you say to yourself you would like to just rely on the local farmers be them young or old to take on the job? Two sides to this story. One thing for sure if LD has the best dockage and a better price I will sell to them. Nice to see basis at better levels. I don't think their income per acre is going to be any better than yours since they likely intend to get mostly custom work done. Does not make sense in my books. I think there is still profit to be made in making responsible machinery purchases and maintenance. Still makes sense somewhere to have a little competition out there.

[cottonpicken]

Should the question not be why?

Obviously money,but why,are they greedy rich
pigs making more or are their margins so low they
are sucking air or is it a risk play?

[Hopperbin]

The oilfield field industry is having a hard time finding competent workers, never worked in the oil field but cannot one teach someone to do their job in just a few days? Seems to me a job in the oil patch would be much more repetitive than farming.

[hobbyfrmr]

Considering BTO's opinion, there really is not that much money in it. There is not enough volume/acres to "save the day" and fill a shortage for any length of time.
Soooo, I suspect, nobody wants to take the chance and farm it for the price of what the rent is expected.
LD may very well just be a liason for the Vancouver investors, helping them get their properties farmed/rented. Maybe investors are goig to control and pay all inputs and custom work hoping for the returns they expected when purchased. LD might be supplying landlords with the credit to buy inputs. They have supplied the inputs and good custom operators for the best chance of success for Vancouver investors. Man, there are so many angles to this story.

[Hopperbin]

Makes sense when you think of it that way Hobby. And maybe they get 100 percent of the canola grown. Maybe even at a higher basis. Tacking on an extra 20 dollars per ton would be a profitable part.

One reason I bought my high clearance sprayer was the fact I spent 50,000 dollars in custom application one year.
Running my own sprayer was borderline economically for me as it also costs some to run the machine plus depreciation. The bigger factor of getting the job done right and more timely was of more concern. I think it is the same with any other custom work done.


Since land rent is already high in the area, what are these guys paying now? Sit back go visit that property in Hawaii.

[tubs]

sf 3 you do the same thing if you can like buying land you don't let young farmers in unless they are willing to pay the price now the shoe is on the other foot and you are whining about that. After a few years not getting a return the will sell. Greed is king

[farmaholic]

Lots of good points made here.

If LD can afford to pay rent(and I
wonder what it is) and have the crop
"custom" farmed so they can supply
themselves with product good for them.
To me it shows how profitable farming is
now, but when margins get razor thin
again, and they will, LD will get out as
fast as they got in. Would it be fair
to say that producing the crop will be
the riskiest part of this vertical
integration approach they are taking?
When it gets too risky they will pass it
on to someone else and guess who that
will be!!!

I wouldn't be as concerned about LD
farming the land as who owns it!

[wd9]

Isn't the whole point of vertical
integration absorbing the less profitable
steps with the profitable but ensuring a
consistent supply chain?

It would seem it does not matter if
production of canola isn't profitable and
technically they could put you out of
business (farmers) as the rest of the
chain makes up the profits.

[farmaholic]

wd9: to me it would be capturing all
the profitable steps and leaving the
high risk low margin to others. BTO
made a good point, how many acres would
LD have to farm to "secure" a supply of
canola for their crush. I don't know
how many they have now but am assuming
it would be equivalent to a piss in the
ocean compared to what they need.

Are they going to follow an sound
agronomic rotation?

I am not threatened by them farming a
few acres, as I said I am more
concerned about who owns the land.
Serfdom to some.

And I don't begrudge those who custom
farm, they are only providing a service.

[SASKFARMER3]

Farmholic its one of the reservations and also a group of east Indians (New Canadians) from Vancouver.
Their was a large land rental by the same group south of melville.
Wondering if they are moving that operation West to get to way better land.

[farmaholic]

Sask3: Can you estimate how many acres
they're farming. Maybe I shouldn't have
said I am not threatened by them since
they aren't on my doorstep. But I guess
it all depends what mode your in:
expanding, holding or downsizing!!