Tough times ahead for Ag

[cuban_assassin]

But this time the parasites may suffer more than the farmers! Layoffs beginning to happen and many farms have put a hold on new fixed asset purchases. The last 15 years have dramatically improved most farms financial status if they were managed properly. The majority are now positioned quite well to weather the cyclical downturn we are now experiencing. Farms will continue to cut costs and cease all unnecessary spending and as a result many parasites will starve. Too many middle men riding around in expensive pickups making $80,000 plus a year with unrealistic expense accounts advising farmers on one thing or another. Unfortunately these middlemen have not had to live within their means yet and know no other way to exist besides the status quo. As a result are ill equipped to survive the downturn. Let’s hope it’s only a downturn and not a collapse!

[Guest]

and they are driving around in $80k trucks , incurring no expenses

[Hopalong]

Think it is overly alarmist, agree that most farms are in good financial position.
May be that land prices and costs are still under valued.
Expect farms that have been profitable will continue to buy equipment.
Note that grain and livestock prices have not changed much past year.
Looking at back pages of Western Producer.

[GDR]

Think it is overly alarmist, agree that most farms are in good financial position.
May be that land prices and costs are still under valued.
Expect farms that have been profitable will continue to buy equipment.
Note that grain and livestock prices have not changed much past year.
Looking at back pages of Western Producer.

I'm not sure either, if it werent for the crappy harvest or lack of harvest, things would be pretty good here. Prices aren't terrible, fert is down for 2020, spring is coming time to chin up and get excited about seeding.

[bucket]

What part of agriculture are we talking about. ....

Farmers. ...they don't count in the whole scheme of things....

Everyone else is getting government money while they are taking their pound of flesh from farmers....

[Oliver88]

What part of agriculture are we talking about. ....

Farmers. ...they don't count in the whole scheme of things....

Everyone else is getting government money while they are taking their pound of flesh from farmers....

Bucket....don’t check out the announcement for taxpayer $ going to Corteva, Bunge and friends.

[cuban_assassin]

The issues are much larger than just the poor harvest weather. We produce commodities and their values is directly related to the overall global economic situation. It’s not good and I believe we are long past due for an economic reset. Every generation has one. Look closer at some of the indicators that Errol posts or macdon talks about. Global economy is on life support and is very fragile. Thanks to the last 10-15 years most farms have very good equity, even at lower land values, strong working capital and manageable debt levels. Therefore are positioned to survive an extended period of slumping ag. Lots of the middlemen whom have came into the picture in the last 10 years have never experienced what a slumping ag economy looks like or will do to their business. They are extremely vulnerable. I am not taking about the large parasites that have been around for generations just the newer ones that have pulled up a chair in the last decade to skim the cream. Prime example is any precision ag company.

[cuban_assassin]

Good example to help illustrate
August of this year I was working on a 1995 $15,000 cultivator converting it from an 8 inch spacing to 12 inch to use as an nh3 cultivator. One of our only hot days this august haha. Ag consulting firm, who will remain nameless, roles into the yard in a 3/4 ton dodge Laramie diesel. Two young ag more than ever “consultants” jump out, shades on with shorts and sandals. Apparently out and about cold calling on farmers who might be interested in their services. Me with cutting torch in hand chopping away trying to remove trip assemblies covered in dirt and sweat. They introduced themselves and we begin to discuss the rare hot day we were having. Nice kids who seemed very knowledgeable but were baffled by why I was going to all that grunt work to changeover this old cultivator. I said well just trying to reduce cost and make use of existing piece of equipment. They said too bad I couldn’t just pass on the cost of a new nh3 cultivator to the end user of our farm products. So me being a bit of an instigator and a little cranky from working in the heat said oh just like your company does with that expensive truck. They said well we need that truck to do our work and get around out in rural areas. I said you need a $70,000 3/4 ton diesel truck with air conditioned leather seats to drive around on grid roads? They said well probably not but if the company’s paying for it why not! We then began discussing their services and associated costs. I said I was not interested and thanked them for stopping by. I also told them to tell their companies owner to buy cheaper transportation and to pass those savings onto their clients. Like I said good kids but unfortunately they will most likely not have a job in the near future.

[jazz]

Cuban, you obviously have never had Farmers Edge come around your area. They come with 4 of those trucks and 4 guys in each truck.

[sk_wheatking]

I've said it before, everyone ******* about land prices but that's not the problem. It's the equipment, parts and input prices along with the market's that are in collusion with each other. The price of land has gone up for sure, but it's an asset that's going to be there forever. Who's 9600 or 2188 is still worth what they paid? Part's are absolutely out of control, and inputs should be in line with commodity prices. But, farmers have no choice but to pay the price. You just said it, 70,000 dollar Laramie, that will be in a car crusher in 5 years, and guys think land is overpriced?

[Taiga]

All true, add in the Trudeau dollar devaluation and it is a huge hit.

[bigzee]

Talked to a lot of farmers at the crop show and some of the numbers I heard for rent, and most of all land sales blew my mind. In one area there were basically five guys laying their cheque book on the table, guy who can write the most zeros gets the land.
Question I have is “everyone” talks and complains what is happening to our industry, but would you sell given the opportunity?
Some have kids coming up others have the next generation already on the farm.
Do these kids really have an opportunity to make a good living?
I personally think the roller coaster has run out of power and it’s still heading down a real long hill, something is going to have to give it a jolt to get to the next peak.

[furrowtickler]

Agree Cuban , I said the same for a while .
Too many hands in the cookie jar .
There is simply not enough return to supply everyone in Ag a big high paying job and benefits anymore, actually there never was. The Ag industry as a whole and extremely poor Ag politics and vision have left the cupboards bare.
Areas that have struggled the past few years with poor harvests are one thing, add in drastic drop in grades and yields in others due to early frosts and lack of rains and you get even a more dismal picture of reality that some are facing .
One thing to struggle to get a 60-70 bus crop off , but an entirely different situation when yields are 1/2 that and grade discounts take all profits away but still keep just above crop insurance levels .
A lot of “extras” have been cut from this area a while ago.
Basically the risk factor has gone up way too high for a lot of areas to indulge in all the extras.
The past three summers we have had only 4-5 in rain in the growing season followed by early frosts . Don’t make sense to spend an extra dollar than need be to get an average crop cause that’s all you will get with limited untimely rains.

[ajl]

I've said it before, everyone ******* about land prices but that's not the problem. It's the equipment, parts and input prices along with the market's that are in collusion with each other. The price of land has gone up for sure, but it's an asset that's going to be there forever. Who's 9600 or 2188 is still worth what they paid? Part's are absolutely out of control, and inputs should be in line with commodity prices. But, farmers have no choice but to pay the price. You just said it, 70,000 dollar Laramie, that will be in a car crusher in 5 years, and guys think land is overpriced?

Send any and all $70000 Laramies destined for the crusher to my yard. My truck is an 06 Ram diesel with 212000 on the clock. It will be running around for a least another decade and yes land prices are also silly right now and only a function of the governments dedication to manufacturing inflation. Once they can't do that, that price gets reset as well.

[Partners]

For some farmers times are tuff regardless of times.
In the 80's when wht was 8 bucks.
We had many neighbors screw the system and declared bankruptcy.
Inputs were tiny compared to now.
High priced land makes us all worth more at retirement. Or if you need collateral for a loan.
Who wants to be worthless?
Some farmers would he broke even if wht was 10 or more bucks..
Spend within your means..