FCC changing their tune.

[hobbyfrmr]

Ahh , Sprott .
Could not bet against him ... lol lol . He was going to show us the way and could not fail . Well where is he now ..
Anyway , point is don’t count out the generational farm , and don’t ignore it FCC, most of us are still here for a reason and will be for a long time .

I dont know how One Earth project failed. They had Sprott’s unlimited amount of investors cash to use the best machines, technology and agronomy money can buy. Throw in some income tax advantages and success was theirs.

I lost track of Pike, is FCC still paying him to wind down huge corporate farm loss project he managed? He managed to convince FCC to lend them 42 (?) million! Thats pretty awesome achievement, spend it all up and then have the lenders pay you to help recover the money is uber smart. I bet Pike is living well on some warm winter destination.

[farmaholic]

I dont know how One Earth project failed. They had Sprott’s unlimited amount of investors cash to use the best machines, technology and agronomy money can buy. Throw in some income tax advantages and success was theirs.

....more subliminal sarcasm?

[bucket]

Read this on my email from farms.com this morning.....


Regina, Saskatchewan, March 5, 2018 – Canadian farmers need to continue to focus on efficiencies and increased production of commodities in order to remain competitive within a rising tide of production around the world, according to J.P. Gervais, chief agricultural economist for Farm Credit Canada (FCC).

*

“Our long-held reputation as a safe and reliable producer of high-quality food opens the door to existing and new export markets, but competitive pressures are mounting,” Gervais said, in releasing the latest outlooks for the agriculture and agri-food sector. “The game is quickly changing and it’s becoming more and more evident that it’s mostly about volume and value added.”

*

Recent years of record-high production have boosted global stocks of many agriculture commodities. But even as the planted acreage of major crops in the United States is expected to be lower than its high in 2012-14, when it averaged almost 257 million acres, improvements in yields allow for continued growth in overall production. That’s why it’s important for Canadian agriculture to invest in innovation that will enable continued growth in productivity.

*

Gervais said increasing productivity doesn’t necessarily mean Canadian farmers need to expand their operations.

*

“Canadian producers need to find ways of reducing costs while increasing productivity from their existing operations, whether that means increasing the yield per acre or getting more butterfat from a litre of milk,” he said. “Investments in innovation and technology will go a long way in ensuring Canadian agriculture remains productive, competitive and sustainable.”

*

Gervais said changing food preferences are also driving investment decisions. For example, milk production in Canada is trending upward, requiring further investment in processing capacity. Canadian consumers also seek healthy and convenient food products, which is expected to trigger more investments in pre-packaged and easy-to-prepare foods.*

*

The food manufacturing sector’s Gross Domestic Product (GDP) is 5.4 per cent higher than at the same time in 2016.*

*

“The climate for investment in Canadian food processing is positive, given a Canadian dollar under US$0.80, continued low interest rates and growing demand in the U.S.,” said Gervais, who projects exports of food manufactured products to the U.S. could increase again in 2018, despite the uncertainty surrounding current negotiations of the North American Free Trade Agreement (NAFTA).

*

He believes this type of investment in Canada’s agriculture and agri-food sector will help keep the industry competitive and, in many cases, a world leader in agriculture innovation and technology.

*

“Increasing productivity and adding value to agricultural products is the avenue that will grow Canadian farm revenues,” Gervais said.

End quote.

That's great ....increase productivity without rain....gotcha....

Had a talk the other day with a lender and asked how these land prices make sense at today's crop prices.....answer was they don't. ...

Let me break down a few key phrases....

"the climate for investing in canadian food processing is great".....yup sure is with the supercluster**** funding for those involved....raw product prices won't demand a premium.

"..its about volume and value adding"....yup its about buying volumes of garbage durum and blending it with this years 1CWAD and making money....guess who made the money?

"invest in innovation".....could someone else tackle that...since the majority of my grain competes with farmers with no technology or innovation just good ole government support because of the wealth it creates for any other nation...


"Reducing costs"....Laughable considering fuel and fertilizer costs are up due to carbon taxes.....what has ever went down?

[bgmb]

What a dumb article. Get more efficent make more money wow what a revelation. Dont need a defree in exonomics or an mba to figure out that concept. There are lots of producers who can easily make money with todays prices and average yields. Yes 14 dollar canola and 8 dollar wheat is nice but that is why we now have these huge lamd prices which everyone likes to bitch about

[bucket]

Would anyone like to know my idea of being efficient....

Hauling grain off the combine to the elevator with as few bins as necessary .....that way the grain is in position to move to export....

That's been taken away....so how does a farmer gain back that efficiency?

Buy bins and augers?

[farming101]

Would anyone like to know my idea of being efficient....

Hauling grain off the combine to the elevator with as few bins as necessary .....that way the grain is in position to move to export....

That's been taken away....so how does a farmer gain back that efficiency?

Buy bins and augers?

What are your thoughts on the economics of that setup?
When would you actually sell the grain? How much would you be willing to pay for storage if you wanted to keep ownership?

[Oliver88]

What a dumb article. Get more efficent make more money wow what a revelation. Dont need a defree in exonomics or an mba to figure out that concept. There are lots of producers who can easily make money with todays prices and average yields. Yes 14 dollar canola and 8 dollar wheat is nice but that is why we now have these huge lamd prices which everyone likes to bitch about

Solid points.

[hobbyfrmr]

....more subliminal sarcasm?

Well, kind of I guess. I have always thought that farming is always cash poor. There is never quite enough money to do things “right”. Thats why, as furrow acurately describes we become the welder, gas mechanic, heavy equipment mechanic, accountant, machine operator of every single machine on the yard, so on and so forth. Those farming ventures were well capitalized, they should have, kicked the hell out of any competing grain farm for miles. Especially in the time of high prices.
Instead the smartest guy in the room (Pike) shorted FCC tens of millions, and shareholders. It is incredible that they continued to pay the guy a salary to wind down the project.
Not so much sarcasm, more like the wonder in the irony of it all.

[ajl]

A simplified system with fewer segregation would be one way to increase efficiency but the seed industry doesn't want that. Perfectly fine older varieties get moved into some new class as a result. There is a farm for sale near Grand Prairie with 5500 cultivated acres and 800000 bu of grain storage right now. (figure that one out) Look on farmrealestate.com This way a guy can segregate into 40 different classes of wheat and store 3 years worth of production. Highly efficient that.

[bucket]

What are your thoughts on the economics of that setup?
When would you actually sell the grain? How much would you be willing to pay for storage if you wanted to keep ownership?

No one let's you store grain...besides three years running so called dumping grain at harvest has been a fairly effective strategy when you figure out those on farm bins and 2 on farm elevations with the auger.....

[hobbyfrmr]

Solid points.

Agreed . US farming website farmland buy/rent prices conversations turn to the fact that too ultimately over pay for the priveledge to farm. Its a farmer thing. If they make profits they immediately put it into farmland purchase or rent prices. This makes me think think of the Buffet thread where he knows when a stock is undervalued and time to buy. It looks like farmers work the opposite way. Not laying blame, furrow noted an observation which I strongly agree that the “rules of business” are backwards in ag.

[Crestliner]

Well, kind of I guess. I have always thought that farming is always cash poor. There is never quite enough money to do things “right”. Thats why, as furrow acurately describes we become the welder, gas mechanic, heavy equipment mechanic, accountant, machine operator of every single machine on the yard, so on and so forth. Those farming ventures were well capitalized, they should have, kicked the hell out of any competing grain farm for miles. Especially in the time of high prices.
Instead the smartest guy in the room (Pike) shorted FCC tens of millions, and shareholders. It is incredible that they continued to pay the guy a salary to wind down the project.
Not so much sarcasm, more like the wonder in the irony of it all.

FCC never lost a dollar on Pike...they were the secured creditors. Different story with the unsecured....which is the case all the time. FCC knows how to cover themselves very well and rarely lose.

That’s why they lend max 65% on their land value appraisal....which really is 50% of actual land value....so boys better have half the cash on the dash or lots of equity to play the game at the big land prices today.

Go ahead take that hard earned cash sitting in the Bank, make the deposit into the neighbors land you always wanted and your kids or grandkids will be the lucky ones to make the withdrawal....lol (if they don’t screw it up!)

[Klause]

FCC never lost a dollar on Pike...they were the secured creditors. Different story with the unsecured....which is the case all the time. FCC knows how to cover themselves very well and rarely lose.

That’s why they lend max 65% on their land value appraisal....which really is 50% of actual land value....so boys better have half the cash on the dash or lots of equity to play the game at the big land prices today.

Go ahead take that hard earned cash sitting in the Bank, make the deposit into the neighbors land you always wanted and your kids or grandkids will be the lucky ones to make the withdrawal....lol (if they don’t screw it up!)

Huh?


That's what a credit union does
FCC will lend 85% of the average area value.

[Crestliner]

Huh?


That's what a credit union does
FCC will lend 85% of the average area value.

You have a nice FCC guy or you are Gold Plated client or both. Last time I checked FCC land values used for financing in my area was 18 months behind current value. But hey whatever works.

A Lawyer friend of mine whose firm does work for FCC told me they were happy and well covered. I don’t think Broadacres bought land just rented...so maybe it was just inputs....it’s all history now.

[parsley]

Does FCC finance Poplar Trees 🌳? Lol

I heard that 😄