BTO bankruptcy. Effect on remaining farmers.

[SASKFARMER]

James, it's not that Saskatchewan farmers cheer when a BTO goes down but most farms are profitable at 5000 acres and down. Studies prove this.

A lot of farms find a happy medium that they can handle and don't look over the fence at what others are doing. They realize what makes money and what doesn't.


The reality is our area has two BTO farms that were famous, one had big money backing from TO and other was a dream of a few guys to hit it big. Both crashed and burned. Only to be a memory for the area.

Yes, they drove up land values and we were told they are so much better a farmer than the rest we cant rent to you. Yea after the crash guess who comes with tail between their legs looking for renters. Now they want stronger deals with locals because of what happened.

Most farmers know what's going on and sit back and watch the show.

[jazz]

Here is a profile on these guys.

https://www.grainews.ca/news/diversifying-an-alberta-farm/

This statement was very informative; The farm’s leased equipment lineup is traded and replaced every year, ensuring not only new and reliable machinery, but also the latest technology.

This has all the hall marks of someone who expanded too fast, got caught up in woke jargon and was not hands on in the operation and probably distracted by all the other junk he was too focused on.

The losses seem to stem from another side of the operation, his investments whatever those were;

Kalco Farms Ltd. ("Farms"), a Gibbons, Alberta-based farm which produces and markets cereal grains such as wheat, barley, and rye, along with Kalco Investments Ltd. ("Investments"), were placed in receivership on January 14 on application by BMO, owed approximately $5.0 million from Farms and $11.2 million from Investments.

[ajl]

One of the major problem with these type of operations is the investment in grain storage and handling systems. Now the bank has the equivalent of a grain elevator that is poorly located. How are they going to recoup that? There is another farm for sale like this near Wetaskiwin on Farm Real estate centre where they were renting land on the reserve and had storage infrastructure for that. Hard to find a buyer for that. On Kalco's website they have a newsletter posted that detailed their experiences from the 2016 and 17 growing season. They had a betting pool that anyone that got stuck in the spring contributed 12 beer to a fund. In spring of 17 they stopped counting vs 2016 at only 48 beer. Seed in mud and your crop's a dud. No comment on 18, 19 or 20 but on this farm I can relate to their experience in those years and the subsequent three years were worse. Farms need to be small enough that off farm income can pull you through is what we have learned as the secret to success from the past few years.

[bucket]

One of the major problem with these type of operations is the investment in grain storage and handling systems. Now the bank has the equivalent of a grain elevator that is poorly located. How are they going to recoup that? There is another farm for sale like this near Wetaskiwin on Farm Real estate centre where they were renting land on the reserve and had storage infrastructure for that. Hard to find a buyer for that. On Kalco's website they have a newsletter posted that detailed their experiences from the 2016 and 17 growing season. They had a betting pool that anyone that got stuck in the spring contributed 12 beer to a fund. In spring of 17 they stopped counting vs 2016 at only 48 beer. Seed in mud and your crop's a dud. No comment on 18, 19 or 20 but on this farm I can relate to their experience in those years and the subsequent three years were worse. Farms need to be small enough that off farm income can pull you through is what we have learned as the secret to success from the past few years.

Grain storage is a money maker....so I have been told many times on this forum
..

Grain elevators want 8 turns a year and farmers settle for 1.

[Sheepwheat]

One of the major problem with these type of operations is the investment in grain storage and handling systems. Now the bank has the equivalent of a grain elevator that is poorly located. How are they going to recoup that? There is another farm for sale like this near Wetaskiwin on Farm Real estate centre where they were renting land on the reserve and had storage infrastructure for that. Hard to find a buyer for that. On Kalco's website they have a newsletter posted that detailed their experiences from the 2016 and 17 growing season. They had a betting pool that anyone that got stuck in the spring contributed 12 beer to a fund. In spring of 17 they stopped counting vs 2016 at only 48 beer. Seed in mud and your crop's a dud. No comment on 18, 19 or 20 but on this farm I can relate to their experience in those years and the subsequent three years were worse. Farms need to be small enough that off farm income can pull you through is what we have learned as the secret to success from the past few years.

In a bad year or string of years, I have no one to pay but myself. No iron payments. I can simply stop spending on stuff and live frugally until times get better again. Not fun, but I’ve done it innumerable times. No high priced rent payments. I am a minuscule farm, it embarrasses me how small I am.

Now these types have to pay their high rent, iron leases, multiple employees. They harp about supposed efficiencies. Tell me, where are those efficiencies when it gets down to it? I guarantee my costs are less per acre. Yet this is the model so many experts push at us?

I simply don’t understand. A profitable five hundred to thousand acre farm using old machinery and getting by for decades is not sexy enough I guess.

[sumdumguy]

Hired help is not created equal, so when they ramp up in spring and harvest with twenty or thirty newbies, how many Triple A employees do you think they get? How can you baby-sit them especially Monday morning ?

[bigzee]

I recall last harvest a huge operation won the country cook out. When asked how many they would be feeding ... the response was 39. Would need a little more than a half beef to feed that crew.

I went through the renting process (like most have), found out the landlords make more than the tenant.
Get a tough yr, still have to pay your employees, at the end there isn’t much left for the guy with all the stress. Sorry it’s not worth it ..... least for me.

Someone asked me what I’m growing this yr. Told him I have a rotation like no other.
Durum, peas, lake, golfing, and enjoying my tri-toon.

[ajl]

In a bad year or string of years, I have no one to pay but myself. No iron payments. I can simply stop spending on stuff and live frugally until times get better again. Not fun, but I’ve done it innumerable times. No high priced rent payments. I am a minuscule farm, it embarrasses me how small I am.

Now these types have to pay their high rent, iron leases, multiple employees. They harp about supposed efficiencies. Tell me, where are those efficiencies when it gets down to it? I guarantee my costs are less per acre. Yet this is the model so many experts push at us?

I simply don’t understand. A profitable five hundred to thousand acre farm using old machinery and getting by for decades is not sexy enough I guess.

Was at an MNP presentation at a canola growers meeting a couple years ago. They ranked there producers by return on market value of assets. Top 10% was around 3.6% ROA for the years of study. I have a couple of GIC's at 3.6%. There was surprisingly very little difference between top and bottom producers and there performance differences were mainly explained by factors like local weather conditions and what you put as market value of owned land. That was not the conclusion they were trying to push but data often tells a different story than the narrative as we have learned in other instances. Higher % of owned land = higher probability of success.

[jazz]

Grain storage is a money maker....so I have been told many times on this forum
..

Farm scale storage can be a money maker, not building your own terminal.

I have guys near me farming at this size and none of them have yards like these guys built.

[Guest]

$230k on a credit card at 10-20% ?
Cmon, there was no intention of repaying anybody