Farm Bankruptcies Soar In The Midwest

[bucket]

What is also different is the cost if machinery....it doesn't matter if you are buying new or fixing old ....the costs either way can ****ing near break a farm....either the new cost or the lost time in field....

With manufacturers that refuse to accept responsibility for their poor design and manufacturing...

When I hear deere has an issue on nearly every combine's sieve frames and expects farmers to pay the cost....

Or a rear rotor update...r and r a rotor is 5000


Or a poorly designed rear beater bearing that burns combines up....


It doesn't matter how well managed the farm is.....shit happens....


And it's costly. ...

[farmaholic]

It can't happen in Canada. Because they're not making anymore land and it doesn't fall in PRICE...ever.

The only ones in the Ag Industry who needs to restructure are Primary Producers, bigger is better, and leasing equipment until you have no equity left in the one you traded on the lease is an ok way of using/acquiring equipment. Rent as much high priced land as possible...even if you have to out bid your neighbor by a dollar to get your hooks into it....you might be able to exercise your first right of refusal if the landlord wants to sell at top dollar plus 5%...its worth it. And don't cut back on inputs, put as much fert on as you can afford...more is always better, spray for disease even if it isn't necessary....pour the coal to it because every thing you can do to it pays back according to Company field trials...YOU CAN'T LOSE!
Then "CASH"(flow) is King...push as much grain onto the market during harvest as possible....even if they don't want it and the pricing signals indicate that....but Cash is King.

Rinse and repeat....until you're washed out!

[ajl]

2019's outlook is worse than the 80's by far although it has a lot in common with it: growing stocks of surplus commodities with rising input costs. In the 80's, all you had to do was have low debt and then things were not bad at all. Mind you everybody was up to their eyeballs in debt at the time. Now what is a guy to do? Selling real estate in Canuckistan and using the proceeds to spend more time down south in Florida would be wise if that was an option for you. But for the rest of us there is no choice but to continue farming and try an make the best of it even for us on more marginal ground. Input suppliers know this. Good jobs are non existent today unless you have connections in government. Farm or long haul trucking is the choice and I know how the answer to that one. For some it will be long haul and try to farm.

[Marusko]

2019's outlook is worse than the 80's by far

Genuine question, what makes you say that?

[macdon02]

You guys are making me bullish....

[ajl]

Genuine question, what makes you say that?

Winning strategy in 80's low debt load. Today, government suppression of interest rates means no difference between high and low debt. Other inputs you pay the same inflated cost. Canola was over $12 in 1988. Some made a fortune then Inputs and assets cheap then and opportunity available. Today there is absolutely no opportunity whatsoever. Does look like there is a new shift in the works back to more central bank money printing so anybody needing opportunity is sol for the foreseeable.

[GDR]

Can definately see how farmers as a group have through greed and fear have reduced potential margins going forward. I never had any skin in the game in the 80s but think todays farm economics still a lot better than the 90s were when i started. Most guys still making money, always gonna have some strugglers even in good times(not always their fault, some things out of your control) For sure commodities are cyclical and we are likely heading towards the bottom. One thing I think will be different this time is most guys have got pretty specialized and if all your eggs are in one basket it gets risky. Seems mostly to be large grain farms, large livestock operations and even large guys that only do custom work. In the 80s most had some cows and most cow guys had some grain to spread out the bumps.

Also I dont think there is near the on farm carry over that there was in years past of both grain and feed. That also gave guys options.

[grassfarmer]

Agree on the machinery costs Bucket. We are a minimalist operation for machinery - get field work done custom but run a good old JD fwa loader tractor to feed cows and anything else I need done. 1989 tractor so it's "pre-electronics" which is the way I prefer it. Had some concerns about a fuse/circuit board overheating when you have all the lights so enquired price of a dashboard wiring harness for it - $5800!! I had them check the price twice - just couldn't believe that. The whole tractors were only about $40,000 new and they want $5800 for a handful of electrical wire and plugs 30 years later.

[sawfly1]

12$ canola did not help here in 1988. No rain, worse by
Rosetown area 50 foot wheat swath could be held in 2 hands.
Glad some did all right. Those years.
Not sure we are that bad yet.
10,000land payment on a qtr, that produced 6,500 gross.

Being diversified did not really help.
Cows were a break-even proposition at best.
Having them , really just wasted a lot of labor.
At least for farms with cropable land.
Only the diehard s left around here , with cows by 2000.
They had some good years , but over the long haul
Not sure how great it is.

It could get messy,
Not like you just run to oil patch and get a job.

our cost structure is out to lunch compared
To south America or Russia.
O
You cannot quit producing.
Pin your hope on poor crops somewhere else. And 7 billion
Having enough money to eat.

[Guest]

It can't happen in Canada. Because they're not making anymore land and it doesn't fall in PRICE...ever.

The only ones in the Ag Industry who needs to restructure are Primary Producers, bigger is better, and leasing equipment until you have no equity left in the one you traded on the lease is an ok way of using/acquiring equipment. Rent as much high priced land as possible...even if you have to out bid your neighbor by a dollar to get your hooks into it....you might be able to exercise your first right of refusal if the landlord wants to sell at top dollar plus 5%...its worth it. And don't cut back on inputs, put as much fert on as you can afford...more is always better, spray for disease even if it isn't necessary....pour the coal to it because every thing you can do to it pays back according to Company field trials...YOU CAN'T LOSE!
Then "CASH"(flow) is King...push as much grain onto the market during harvest as possible....even if they don't want it and the pricing signals indicate that....but Cash is King.

Rinse and repeat....until you're washed out!

Oh come on pharma you whine on this thread about the status quo and defend it on another thread, which one is it? Oh I get it you're sitting on the fence like many others. Jump out before the water gets too hot.