Some one smarter than me explain the BTO!

[AlbertaFarmer5]

This existing on the edge of insolvency, while living far beyond ones means phenomenon isn't limited to farmers or BTO's.

I've attended a number of bankruptcy auctions in the oilfeild manufacturing business during this downturn. They were starting to fail even before the crash, leveraged to the max, all the latest shiniest equipment, biggest shops, yard, cranes, offices, luxury vehicles. Sure did look impressive from the outside though. Lots of bargains to be had on nearly unused equipment. In at least one case it was a successful family business, that the younger generation leveraged into exponential growth and lost it all.

The timing of a big expansion either makes one look brilliant or bankrupt, not much in between.

I really believe that many business models are simply set up to extract as much as possible for the shareholder/owner, live the good life while it lasts. The owners of these companies I refer to above were still driving around in their luxury automobiles while their auctions were happening.

[farmaholic]

And what example has government set regarding debt and paying it back? Besides it was their policies that made it possible for Joe Borrower to get in as deep as he has, albeit the choice was ultimately his!

Why not live high on the hog and beyond your means if there are hardly any repercussions for not paying back what you borrowed. For some there seems to be no shame in bankruptcy.

As I said in the beginning of this thread.....just because they will give it to you doesn't mean you have to take it.

[farmaholic]

What if.....some "operations" are using the current economic policies, opportunities and the "Great Sask Land Rush" to further increase their own wealth by creating Operating Corporations that they may be preferred shareholders and employees of and hold luctrative board seats. Skimming cream! Creating their own opportunities and capitalizing on them. Is it illegal, is it immoral or just capitalizing. If the Op Corp hits an iceberg do these special individuals really go down with the ship or have they their own specially designed and built life raft they're sitting in at the first sign of the main vessel taking on water?!?

I think there are two camps....one where someone is lulled into the BTO style of farming by Industry and their own naive ego. Then those who do it by design....like the above description.

[bucket]

Did Gary Pike suffer any financial hit with his attempt. ....


And what about those New Holland farmers that have office workers....

[biglentil]

As long as the outside investment keeps flowing in the crop really does not matter. Just ask Bernard Madoff. All that matters is the optics from a far. Fancy drone videos, heavy marketing, expensive branding, lots of shiny paint perfectly aligned and the cherry on top inventive accounting. After a while you might even believe that your the worlds greatest farmer even though your crops are the laughing stock of area. Big bin yards are fantastic for marketing. The investors think they are full. Its not about neighbours helping neighbours its squish the the competition.

[MBgrower]

Did Gary Pike suffer any financial hit with his attempt. ....


And what about those New Holland farmers that have office workers....

any farm that has non family office workers, and an office located off the farm will be the first to go.

[farmaholic]

We should note that even some farms that look like they might resemble SF3's description, they are actually very well heeled and financial powerhouses. Not leveraged to the max or using other people's money to drive "their" farm growth! That make calculated well managed risks.

So when that special land comes up for sale they are able to pounce on it without putting their operations at risk, in fact they can probably afford to be on the wrong side of the trend(buying high when things have plateaued or are coming down)... because they look at it as a long term investment for the family operation and have every intention on staying active farmers for the foreseeable future.... because the kids want to be involved and part of it.

Then there are those "small" operations who likely have stronger balance sheets and just as profitable(if not more) than those who, as SF3 described, are just spinning their wheels....

I know where I want to be! The days of wanting to move mountains are well behind me.

[Oliver88]

After reading this thread there are a lot of good points and eye opening points for a small-medium sized farmer with older iron.

Maybe Iceman is right and INP would be a good investment after all??

[iceman]

Maybe Iceman is right and INP would be a good investment after all??

She's all Case Ih paint right now in good old INP share land. Been down hill since Wall announced he was stepping down. Drum roll......................

Iceman Out

[SASKFARMER3]

Good points I remember in the 80s one farm out of all that bought survived and 25 years later they started to buy a little again. Only one rest were gone, downsized and finally out. One out of lots, so yes some today if a piece came up can afford to buy and will survive.

It's lessons that history teaches.

I really believe their is a template it's not ment to destroy farms it's actually smart in a rising market and great prices.

But farming isn't like any other business so much from weather to governments to God can effect a crop and your profit.