Non Equity Farmer

[helmsdale]

That's rough. I'd be uncomfortable with rent only operation - I've always seen land ownership as the ultimate goal, providing stability and collateral, and a retirement plan. On retirement, what's your long-term plan?

Land ownership certainly is the long term goal... I'm about 5 years too young. There were *a few* opportunities while I was in university. School chums that bought then, have made 4-5 times return on their equity. Guys that were 4 or 5 years older than I managed to get a start at a reasonable price out of college/uni.

Only other guys my age around here that are giving it a go, got significant financial help, or at least had family willing to lay paid for equity up as collateral. I'm in neither of those positions.

Long term, I hope my landlord relationships will provide me an opportunity to purchase some land outside my parents, but who knows. Being a landlord is all the rage these days when land values have vaulted by 25-50%/yr over the last decade.

Who knows where things go from here...

[Sheepwheat]

Land ownership certainly is the long term goal... I'm about 5 years too young. There were *a few* opportunities while I was in university. School chums that bought then, have made 4-5 times return on their equity. Guys that were 4 or 5 years older than I managed to get a start at a reasonable price out of college/uni.

Only other guys my age around here that are giving it a go, got significant financial help, or at least had family willing to lay paid for equity up as collateral. I'm in neither of those positions.

Long term, I hope my landlord relationships will provide me an opportunity to purchase some land outside my parents, but who knows. Being a landlord is all the rage these days when land values have vaulted by 25-50%/yr over the last decade.

Who knows where things go from here...

Yeah I hear you. While land prices here are not nearly so stupid as elsewhere, it almost never comes up for sale. Only land I came close to having a chance to buy was a wide open tender so the world could see. Usually the only ones who have a clue there is land for sale is the landlord and the tenant, or the greedy ones who run around the country offering to buy it every few weeks. Grateful I was able to buy it, or else I wouldn’t be able to be a farmer. Hard to compete with old money. I used to be bitter and a bit resentful, but that doesn’t help. I got past that stage finally, and just have to be different which is fine cuz I was born at least a generation too late. Lol

Good luck I feel your pain and frustrations.

[brs]

Land ownership certainly is the long term goal... I'm about 5 years too young. There were *a few* opportunities while I was in university. School chums that bought then, have made 4-5 times return on their equity. Guys that were 4 or 5 years older than I managed to get a start at a reasonable price out of college/uni.

Only other guys my age around here that are giving it a go, got significant financial help, or at least had family willing to lay paid for equity up as collateral. I'm in neither of those positions.

Long term, I hope my landlord relationships will provide me an opportunity to purchase some land outside my parents, but who knows. Being a landlord is all the rage these days when land values have vaulted by 25-50%/yr over the last decade.

Who knows where things go from here...

Only part is yes equity is 4 to 5 times more now then it was 4 to 5 years ago but equity still doesnt pay the bills. On paper yeah I would have allot more borrowing power then I did 5 years ago but feel i need to take it slow. Not much fun not being able to sleep at night or always am told dont want to loose what u already have.

[makar]

When i started farming had no credit rating, bank would not loan me five cents because i paid cash, even if i had the money, some yelling later gave me the loan witch i paid the next day, they made five bucks, closed my account and havent been back since, mind you since i started farming havent seen cash since but built a mini empire. That rbc never saw a penny of. 1979 wasnt fun either.

[furrowtickler]

Only part is yes equity is 4 to 5 times more now then it was 4 to 5 years ago but equity still doesnt pay the bills. On paper yeah I would have allot more borrowing power then I did 5 years ago but feel i need to take it slow. Not much fun not being able to sleep at night or always am told dont want to loose what u already have.

Yup , still need cash flow to pay bills . That not so easy these days as net returns are diminishing with rising input and operating costs, land tax’s and now carbon tax’s .
I read something the other day that was interesting........
“if your in a room of 10 farmers you better figure out how to be a lower cost producer than at least 8 of them or you won’t make the next 8-10 years”
Not sure if that will play out but makes one think of high input farming and the very high risk ...
crop prices / net returns no where near keeping up with costs in a lot of areas.
A lot of that has been pointed out in discussions here .
Farming all rented land carries a huge risk with today’s rents , a sharp pencils quickly get erased by Mother Nature.

[woodland]

I'm going to say something unpopular, and it could just as easily apply to my own operation, and many others. On a previous thread I gave this producer credit for starting from scratch, not faulting his management, but maybe the timing and location are the problem.

Perhaps 5 years of weather disasters in a row, may indicate that the previous decent years were the exception, and these 5 years are back to normal.

I'm a couple of hours south of Evansburg, but about as close to the western edge of farmland as they are. So we probably have very similar challenges, low heat units, short growing season, excess water more often than not, grey wooded soil, varied topography, bush, wildlife, if anyone closer to the area knows otherwise, please correct me. I have driven through the area often, and looks like it would be a very challenging area, and I don't think it has been traditionally broadacre crops, likely for good reason. A quick look at google maps looks like when it is wet, it is really wet, lots of bush remaining, or freshly cleared, water runs, low areas and obstacles.

We had a number of years with extended growing seasons, which made a lot of us on the fringes think that was normal, and we get offended at the suggestion that global warming didn't permanently make us the new banana belt.

I don't know how much realistic research the banks use to judge climate/weather risks when lending money to farmers. But just maybe they look at 5 years of disasters, and the historical land use, and the actual climate trends ( not the ones Chuck imagines are occurring), and have established that this is too big of a risk, and with no land for collateral, he would be the first to feel the pinch. If anyone else who owns land wants to risk, or burn their own equity to continue to fight mother nature, the bank will gladly agree.

And that is part of the process of low prices curing low prices. One way or another, the least profitable or most risky acres will come out of production. Every acre looked profitable at the highs. And in a disasterous year like 2012, prices still made up for production problems.

I’m about 45 minutes SE of Steele (the fellow in the article) and my buddy is next door to him. The last 5 years have been not too kind for growing grain or dry hay here. Last year my buddy had a quarter (150 acres) of canola that drowned out and only filled the lead trailer of his super b. This area of muskeg and hills is best suited to cows or mixed farming at best from uncooperative weather and a very short season. There is under half of the cows compared to 15 years ago since a lot of guys got out and others would rather grain farm and take the winters off. I don’t see this trend changing anytime soon as most guys would rather quit than go back to cows.

Profitability while not great is still positive. Equipment is still getting fixed (not upgraded), land payments and rent are current, and the family can still get away once in a while. My buddy is still waiting on crop insurance to measure his bins and they told him that 75% of producers in our area are in a claim position (low yield or snowed under crop) which is higher than I expected.

Crop insurance has saved a lot of folks out here over the last few years (us included) and helped with the conversion of grass to cereals and canola due to better coverage. I just got this years pasture insurance renewal and coverage/premiums went up by 50% which I think is great. It closer resembles the value of lost grass during a dry year which is probably overdue for us.

Looking forward to spring here ............. Bring it on🍀

[AlbertaFarmer5]

But how long will crop insurance save anyone. As I understand, it is based on a 5 year average, so 5 disasters in a row has to be driving the base line yield down into unprofitable areas eventually doesn't it?

And is that the intention of crop insurance?

[woodland]

But how long will crop insurance save anyone. As I understand, it is based on a 5 year average, so 5 disasters in a row has to be driving the base line yield down into unprofitable areas eventually doesn't it?

And is that the intention of crop insurance?

I believe it’s 15 years of records that they use but I’m far from certain on that. I guess eventually if you constantly claim then your coverage would drop which it should. I know that we had claims from quality downgrades (green canola) but they use your gross bushels for calculating your average which is a nice bonus. Last year we were way above our average on barley which was our only crop and that was nice. If we were trying to “work” crop insurance everything would be canola since the coverage is way better. However we just wanted barley since it’s cheaper to put in and earlier to come off. We wouldn’t have finished otherwise (priceless in my mind) and are doing the same this year.

I believe if there was no crop insurance there wouldn’t be the rush to rip up grass around here. Simple economics of 50bu of $10 canola X 80% = $400 coverage vs $45/ac coverage for pasture. Nobody ever called at midnight in the pouring rain to say my barley was running away either. The joys of livestock.

Fertilizer guy stopped by today and mentioned there’s a few more auctions than normal coming up around here. Maybe Ma Nature is kicking more guys to the curb yet. I love my cows and old rusty shrapnel.

[ajl]

1200 acres of land for rent just came up in this area for $40 per acre if anyone wants to join this guy fighting the swamp. On Kijiji in the farm equipment section. If we don't get some warm weather this year, this land will revert back to muskeg.