Credit Sieze-up in Agriculture?

[freewheat]

vvalk, I don't take blatant criticism lightly. To criticise someone for being a small farmer is tiring. I live next door to too many guys who think they are somehow more important than me because they farm more and have fancy equipment. I am simply sick of it.I work more hours than they do very often, but many still seem to chuckle at guys like me. IE. Why is so and so not done seeding yet, he only farms 1500 acres? Answer: Well guy, perhaps he has a 28 foot drill, works alone, and harrows, sprays, and seeds ALL by himself. The guy smirking often has 2 or three men to run a couple of 60 foot drills, with a guy or two organizing for it all. I mean nothing personally towards you, but the attitude that small guys don't matter really bugs me, so of course I'll defend myself, and anyone else who decides small is fine.

[parsley]

Make sure you don't put words in my mouth, snappy. If a guy farms eighty quarters of canola or one quarter of garlic, it's his choice. How, why, and what they farm are all a matter of choice.

[vvalk]

Parsley. I do not understand where you are coming from. Wilagro attacked the vast majority of farmers who borrow money. He even went so far as to comment that all of us just work for the f###en man. Why do you need to defend such stupid comments? You want to have a beer with a guy who makes comment that you are not a farmer if you borrow money. Please explain yourself.

[vvalk]

freewheat. again who did the initial critizing, Wilgro on people borrowing. Thats OK by you then?

[freewheat]

I see what you are saying, vvalk, and I reiterate that i borrow money. No, wil is out to lunch here. I just got mad, as when i put up with the bullies, and the big shots looking down on me every day, it gets a little old. I can complain strongly here, whereas in the real world, i don't have that recourse, for I still need neighbors, no matter how ridiculous they can be...

[parsley]

Reasoning:
2 butting heads:

A "If you require an operating loan every year, then you shouldn't be farming", wilagro says. (Not true.)

The retort was:

B "You are not running your business properly if you are not borrowing", vvalk says. (Not true).


One is about as bad as the other.


But this:" What a simplistic comment you have made and shows to me the size and scope of your farm."


O really? And how did you come to surmise that? I know both large and small farms with no OP loan. And even if you happened to guess correctly, what is the matter with either a large OR a small farm?

Then you go on to say:

"Does not surprise me in the least that your a devout CWB supporter."

Not unless you're a psychic.

Pars

[vvalk]

Parsley
Any business education would teach you to leverage part of your business. Take cash from your farm and borrow 5 times the amount back for a small interest payment. I will borrow money at 5% all day and turn a 10 to 50% return on that money. So really your making up to 100% return on your original cash. If you are not borrowing a portion of your operating capital then you are losing opprtunity cost on all the cash being used. So yes I do think that you are not running your business properly if you do not have some borrowing in your business/portfolio. Wilagro makes broad comments like this all the time. These last comments now show the scope of his operation and the foundation for all his rants. I am just defending agianst these anti successful comments he spouts off all the time.

[parsley]

Well, I'm sure you have the business school notes memorized and I'm sure they will work well for you. However, some folks have piles of cash, and don't want to pump any more into their farm, as they have other interests. A lot of boomers are exiting and don't run op loans or want to expand. Some young guys just entering only want a small operation until they are ready to move onto the farm. One shoe does not fit, nor does your addage.

But lets real-speak:

Isn't the following what you really meant?

" What a simplistic comment you have made and shows to me the size and scope of your farm."
Plain Talk: Dumb ass has such a small farm he doesn’t need an operating loan.

"Does not surprise me in the least that your a devout CWB supporter."
Plain Talk: Wheat Board supporters are small farmers. Small farmers are schnooks.

Plain Talk: None of those statements are factual or true, because farmers farm for different reasons. CHOICE. Maybe not your choice, but someone else's choice.
Parsley

[Kodiak]

Wow! I was really not trying to rub off a bunch of thin skin you guys. Nor was I prying into your philosophies respecting farm size or your appetite for debt.

I was thinking Macro. The credit seizure that we are witnessing is having huge ripple effects in the global business community. Some are impacted more. Some less.

My question is simply aimed at trying to get a broader understanding of how a lot of you see it affecting the agriculture industry in Canada, not your specific farm.

Jim Rogers sees an inflation holocaust ahead as central banks print money to try and loosen up the commercial bankers. But others see the deflation we are experiencing now and expect it to continue for a long while. Both arguments seem to have merit.

Without credit, world ag production could drop dramatically. Will tighter S&D’s reflate grains? Once all the investors who have horded cash realize it is declining in value because truckloads of new stuff being printed daily, where will they go with it? Will cash owners begin to buy tangibles to preserve the value of their assets, sparking inflation? That’s what Jim Rogers’ argues and it seems pretty logical.
However, downward spirals feed on themselves as well. A typical deflationary spiral involves declining demand as buyers wait for even lower prices. Declines in production and payrolls then depresses demand even further, necessitating more price declines. And without credit, the argument goes, buying is further curtailed, depressing prices. That’s what the central bankers and finance ministers seem to be more concerned with for now. It’s hard to argue it isn’t already happening.
Is food, a necessity of life - compared to real estate or gold - going to be markedly different in how it responds to the crisis?
I haven’t decided which camp I’m in or even how many camps there are. Maybe someone can paint another possibility??

[parsley]

Thin-skinned? Nope. Hard-nosed? Yup. Kodiak,I know what I believe in and it's not negotiable.A little verbal UFC is good for the mind, as long as it is about issues and ideas and not about people.

Is this what could be coming? I don't know: Once the US election is over, things go to hell in a handbasket.

The US will be hoping China and India don't call in their loans.Money will be printed like mad.... And then no money will be found anywhere. Goods will be hard to get. Ordinary things like toilet paper. Sugar. Taxes will skyrocket and people will leave their farms. Crime will be terrible.

Is this a scenario that is probable or is it nonsense?

Parsley