BTO bankruptcy. Effect on remaining farmers.

[burnt]

Yeah the modest farm wasn’t good enough. “If you’re not expanding your sitting still”. Quite a quote.

Well there actually is an element of truth to that (bolded)statement. In fact, if you're not growing in some aspect, you may be - no, you WILL be - going backwards.

This is the voice of experience speaking. Quite a few years ago, I was in a very comfortable position, I thought. I could see how it was becoming a dog-eat-dog business and didn't want to be caught up in that mentality.

Took my foot off the pedal and thought I could coast on what I had built - small, mixed farming operation, little to no debt, a workable line of equipment, etc.

Wrong.

Inflation started to eat me up and before I knew it, I had to scramble to catch up. At some point, that becomes extremely difficult.

So standing still is not going to keep you in the racket for very long.

So what then - try to run with the big dogs?

Well, I think Jazz comes up with a great idea, bolded below:

You can grow your business without buying more land. Any profits could have just gone into the S&P500 which grows at 7-9%. Risk becomes more exponential in farming the larger you get...

I have often thought that there must be ways how one can grow their business without expanding the production base?

I know it can be done in our locality because of proximity to a bazillion types of end user products for what we grow,from livestock to grains.

I know of a few small scale operations that are doing some pretty simple, innovative things to add tremendous value to their products.

I acknowledge that there are areas that are quite far removed from the market for their production. I do not believe that such a circumstance always precludes them from finding and creating added value.

What I have observed is that growing one's scale of production is always easier than growing margins thru discovering extra value.

Someone has said that the main motivations in farming are greed and fear - not sure that this is always the case.

And sometimes it become painfully evident that some guys' egos are "writing cheques their body can't cash". They get all the sympathy they deserve.

I'm neither bragging or complaining.

They say confession is good for the soul. :-)

[LEP]

What I think happens is they strive to get bigger. So they get there and aren't making money or not much money. So they think if I just get bigger my fixed costs are spread out even more so I will start making money. And so on and so on. Pretty quickly if they ever had equity it gets eroded with losses. Land appreciation allows them to refinance their losses until the losses grow faster than the bank's appetite.

[FarmJunkie]

Will guarantee u the machinery payments ended them. Whether u lease or buy new it is money lit on fire. I tried to play that game when our dollar was at par with the US and it was just a never ending black hole for a farm our size. The price of that stuff has just out paced the possible returns per acre. We have grown some big crops with few real disasters the last 6 years and it just gets tiring trying to stay current. Had we had some real bad weather events it would have been a long row to hoe. Learned my lesson and will not return down that road again. No doubt their plan looked good on paper but Mother Nature don’t give a shit about that.

[Guest]

Well there actually is an element of truth to that (bolded)statement. In fact, if you're not growing in some aspect, you may be - no, you WILL be - going backwards.

This is the voice of experience speaking. Quite a few years ago, I was in a very comfortable position, I thought. I could see how it was becoming a dog-eat-dog business and didn't want to be caught up in that mentality.

Took my foot off the pedal and thought I could coast on what I had built - small, mixed farming operation, little to no debt, a workable line of equipment, etc.

Wrong.

Inflation started to eat me up and before I knew it, I had to scramble to catch up. At some point, that becomes extremely difficult.

So standing still is not going to keep you in the racket for very long.

So what then - try to run with the big dogs?

Well, I think Jazz comes up with a great idea, bolded below:



I have often thought that there must be ways how one can grow their business without expanding the production base?

I know it can be done in our locality because of proximity to a bazillion types of end user products for what we grow,from livestock to grains.

I know of a few small scale operations that are doing some pretty simple, innovative things to add tremendous value to their products.

I acknowledge that there are areas that are quite far removed from the market for their production. I do not believe that such a circumstance always precludes them from finding and creating added value.

What I have observed is that growing one's scale of production is always easier than growing margins thru discovering extra value.

Someone has said that the main motivations in farming are greed and fear - not sure that this is always the case.

And sometimes it become painfully evident that some guys' egos are "writing cheques their body can't cash". They get all the sympathy they deserve.

I'm neither bragging or complaining.

They say confession is good for the soul. :-)

like the girl in the song , lol
"Watching her leave I heard the bartender say,She ain't pretty she just looks that way"
i think there is a lot of this out there right now

[jazz]

Will guarantee u the machinery payments ended them.

I am not sure what technology those folks thought they needed to grow a profitable crop. There are couple guys with 25 yr old drills around here keep right up with the paralinks at 1/10th the cost.

Tractors is just HP, what tech do you need to lug iron around the field?

And combine? The crop is already a lock by the time you get to harvest it. What ground breaking must have tech does a current combine have that one from 5 yrs ago cant do?

I dont get these business plans at all. I know guys who flip leases, but they do one major machine every couple yrs, not every piece of equipment every yr. Thats just nuts.

I am surprised their accountant didnt ring the alarm.

[Guest]

where did big wheel go ?

[blackpowder]

What I think happens is they strive to get bigger. So they get there and aren't making money or not much money. So they think if I just get bigger my fixed costs are spread out even more so I will start making money. And so on and so on. Pretty quickly if they ever had equity it gets eroded with losses. Land appreciation allows them to refinance their losses until the losses grow faster than the bank's appetite.

From the book of Gary Pike.

[AlbertaFarmer5]

On the other hand, considering the new equipment turn over of this type of operation, that is likely a big benefit to all other producers. If they are eating the biggest chunk of depreciation ( regardless if it is a lease or purchase, the equipment loses value), it does help the rest of us.

[GDR]

On the other hand, considering the new equipment turn over of this type of operation, that is likely a big benefit to all other producers. If they are eating the biggest chunk of depreciation ( regardless if it is a lease or purchase, the equipment loses value), it does help the rest of us.

You might be surprised. Some of those multiple unit deals are pretty amazing. The dealers need to get the new ones out the door to get the used ones back also. They have lots of programs for new. Have heard in the past that the 3rd owner of a combine takes the biggest depreciation hit. I'm kinda a keeper not a trader.

[Sheepwheat]

Well there actually is an element of truth to that (bolded)statement. In fact, if you're not growing in some aspect, you may be - no, you WILL be - going backwards.

This is the voice of experience speaking. Quite a few years ago, I was in a very comfortable position, I thought. I could see how it was becoming a dog-eat-dog business and didn't want to be caught up in that mentality.

Took my foot off the pedal and thought I could coast on what I had built - small, mixed farming operation, little to no debt, a workable line of equipment, etc.

Wrong.

Inflation started to eat me up and before I knew it, I had to scramble to catch up. At some point, that becomes extremely difficult.

So standing still is not going to keep you in the racket for very long.

So what then - try to run with the big dogs?

Well, I think Jazz comes up with a great idea, bolded below:



I have often thought that there must be ways how one can grow their business without expanding the production base?

I know it can be done in our locality because of proximity to a bazillion types of end user products for what we grow,from livestock to grains.

I know of a few small scale operations that are doing some pretty simple, innovative things to add tremendous value to their products.

I acknowledge that there are areas that are quite far removed from the market for their production. I do not believe that such a circumstance always precludes them from finding and creating added value.

What I have observed is that growing one's scale of production is always easier than growing margins thru discovering extra value.

Someone has said that the main motivations in farming are greed and fear - not sure that this is always the case.

And sometimes it become painfully evident that some guys' egos are "writing cheques their body can't cash". They get all the sympathy they deserve.

I'm neither bragging or complaining.

They say confession is good for the soul. :-)

I agree. This guy was talking about acres expansion.