RB auctions

[Horse]

GGot the new rb catalogue and as always I have to wonder who gets the money, bank or seller. Yea right away some will call me jealous but I just can't see the size of these operations with the risk levels of farming. I am of the belief that a lot of them went in fully planting on failing, but putting enough to leave wealthy and let the lenders pick up the losses.
HHonestly now how many BBTOs could finance there own operation without credit,. One advantage of being moderate is most of us own what we posses. Just curious not blaming or jealous.

[sofa.king]

The world would be a better place if you needed more than a heartbeat to borrow money. Think some higher interest rates would cure the problem.

[vvalk]

GGot the new rb catalogue and as always I have to wonder who gets the money, bank or seller. Yea right away some will call me jealous but I just can't see the size of these operations with the risk levels of farming. I am of the belief that a lot of them went in fully planting on failing, but putting enough to leave wealthy and let the lenders pick up the losses.
HHonestly now how many BBTOs could finance there own operation without credit,. One advantage of being moderate is most of us own what we posses. Just curious not blaming or jealous.

Why would you ever self finance the whole thing? Even if you had the money you would use that somewhere else and still borrow. If you plan to continue in any business without financing I wish you good luck. You want to compete with 100% dollars against 20 to 25% dollars? With interest rates between 2 -and 2.75%?

[sofa.king]

If the shit hits the fan there will be a lot of pain out there for some. To each their own I just prefer a to know I don't need to grow a crop to live another day makes it easier to sleep at night. But there is a time to borrow and I paid for land at double digit interest rates not fun.

[Partners]

Yes interesting sales..
Most farms have way better..newer equipment than we have.
But the time will come for all to have a auction.

[hobbyfrmr]

I think SF3 talked about timing. New entrants a few years back had record yeilds and record profit prices. Now Canola-winter-canola crops and kick ass lentil crops are working out. Some farms are exceptionally profitable.
Some newer farmers have only ever had to manage profit!! Nothing wrong with that, it brings up the price of land and cash rent.
$110+ /acre cash rent makes retirement auction sales happen. This may just be a proverbial changing of the guard.

[hobbyfrmr]

I think SF3 talked about timing. New entrants a few years back had record yeilds and record profit prices. Now Canola-winter-canola crops and kick ass lentil crops are working out. Some farms are exceptionally profitable.
Some newer farmers have only ever had to manage profit!! Nothing wrong with that, it brings up the price of land and cash rent.
$110+ /acre cash rent makes retirement auction sales happen. This may just be a proverbial changing of the guard.

I noticed one neighbor has 500 acres sandy land displaying the modern lentil-winter-lentil rotation .

[Horse]

Why would you ever self finance the whole thing? Even if you had the money you would use that somewhere else and still borrow. If you plan to continue in any business without financing I wish you good luck. You want to compete with 100% dollars against 20 to 25% dollars? With interest rates between 2 -and 2.75%?

I guess that's right but when is enough, if I have all I need to run the size operation I want what is the point of getting bigger ? I have neibours that will do anything to get out of tax, mostly by buying bigger and newer equipt b

And some are finding that its not as easy as they thought and find themselves in over their management skills. Just pay the tax and be happy, go fishing instead of farming that extra 1/4,or section.
To each his own I guess

[GDR]

I too wonder how much is enough for some guys. Big question to me is why??? I figure by the time you pay extra labour and iron costs the net profit on a small farm that is maxed out labour and equipment wise can't be much different. Or am I wrong?

No question things have changed in our business. I really notice it driving through SK. In the 90s you saw lots of small farms with older equipment parked in the yard and a handful of bins. Now everywhere you look are shops that look like aircraft hangers and bin setups that look like inland terminals. Not as noticeable change in AB.

[hobbyfrmr]

I too wonder how much is enough for some guys. Big question to me is why??? I figure by the time you pay extra labour and iron costs the net profit on a small farm that is maxed out labour and equipment wise can't be much different. Or am I wrong?

No question things have changed in our business. I really notice it driving through SK. In the 90s you saw lots of small farms with older equipment parked in the yard and a handful of bins. Now everywhere you look are shops that look like aircraft hangers and bin setups that look like inland terminals. Not as noticeable change in AB.

Efficiency. Remember pulling a 21 foot cultivator? A 32 foot made a big difference. Then 48 foot, 66 foot etc. Economies of scale, $20/acre profit on 1000 acres doesn't cover the cost of living, might as well just have a job in the city. $20/acre profit on 5000 acres is $100,000 . Mom gets the Escalade and Dad gets the Super Duty... now we're farming.
Exponential growth. We are only going to farm "X" number of years. So, one crop per year, might as well Farm hard to build wealth. Buying land and rent a whole bunch. The rented land helps pay fixed costs, the purchased land. At the end of the run, drop the rented land, and keep or sell what you own. Around here, the "big" farmers will end up owning 30 or 40 or 50 quarter sections. We see the appreciation in farmland, they are building wealth 10 times faster than the Mickey Mouse guys buying 3 or 4 quarters over a couple of decades. Even if "big" farming goes bad, you can liquidate everything and just keep what you own which can be quite substantial, all the while keeping Mom and the kids happy and comfortable. Agribusiness...not agriculture.

[SASKFARMER]

I believe the UofS did a study not to long ago the most profitable farm size is a 10000 acre farm.

Just saying big is nice but it has a whole bunch of other problems.

Find your size that works and F$&k the rest.

[sk_wheatking]

I believe the UofS did a study not to long ago the most profitable farm size is a 10000 acre farm.

Just saying big is nice but it has a whole bunch of other problems.

Find your size that works and F$&k the rest.

I would tend to think that's true. The biggest issue with farming is manpower though. Seasonal help with experience and guys that care are hard to find.

[HappyFarmer]

I believe the UofS did a study not to long ago the most profitable farm size is a 10000 acre farm.

Just saying big is nice but it has a whole bunch of other problems.

Find your size that works and F$&k the rest.

Well I would love to see that study. I think size has nothing to do with it. It's all how its managed. I would would bet any money that there are 2000 to 2500 acre farms that are just as efficient as 10000 acre ones. It's all how is operated. I see it around me all the time.

[farmaholic]

Lots looks good from the roads. Remember capacity for machinery is usually matched to the amount of acres each can accomplish. Also, some BIG farms are supporting 2 or 3 families, they get the efficiency of working together and helping each other out....synergy as long as there's harmony.

There's different mentalities when it comes to the end goal. Own a few acres and rent a pile and bow out if a nice nest egg is established. Buy most of the land you farm and tie up capital that way.... then silver platter it to the next gen. Only ever rent and leave when you're ready. The drawback to renting a pile of the land you farm is you are at the mercy of landlords or losing it to other farmers or buyers, why do you think our forefathers came to a place where land ownership "was" possible to carve out their farm in a vast land of opportunity.

To each their own, the right way is the way you want it for yourself, not looking over the fence and worrying about what everyone else is, or isn't, doing.

[fjlip]

MNP accountants see all sizes, they opinion is 2000-4000 most profitable, after that need multiples of machinery and many more bodies. Might as well go way bigger. Watching the approx 20,000 acre neighbors is truly mind boggling. Millions in iron, shop, bins, and 30 bodies.