My New Years Resolution

[cakadu]

Horse, you also make some valid points. The tax rules catch up with some because you do have to be seen to be trying to make a profit and as emrald as said, there are restrictions when it comes to off farm income and how much of a loss you can claim. I do know that there are those who know how to get around these things, but eventually some of them do have to pay the piper.

How do you see there being a differentiation between a bona fide farmer and one who is using it as a sink farm as you call it? At what point is there a cut-off i.e. based on number of head, land owned, crops harvested, number of hours spent doing farm work? That is something that I think would be quite a challenge to determine.

[JD4ME]

My thoughts on Canola marketing, well for unpriced canola it depends on cash flow needs,and what your traditiional strategy is. I would be monitoring basis levels and talking to crushers and elevator companies, they know theres lots out there and won't be working the basis any tighter than possible. I see the dollar started the trading year weaker and that may help. a little but canola has certainly been under pressure the last couple sessions. I think it depends on what your needs are though if you are an empty bin farmer then likely dollar cost average and replace a percentage on paper. If you have the bin room you can contract way out and lock in prices 16.5 % higher May 06 than now thats good interest on the money if you can cash flow from board grains or livestock.
We priced out Bins as we need more storage as it is the carry would half pay for the bin in the first year. Thats a 50% return on investment there.
Different farms have different needs and can react to situations differently. PS this thread wasn't a canola thread if you want to discuss that start another thread. Thats another thing about that forum threads wander off topic way to easy-charlie haha

[BFW]

Wd40 what are you complaining about? You should be happy that feedlots try to operate on a margin of $25.00/hd/turn. The easiest way to increase my margin would be to pay less for feeder cattle. As luck would have it, feedlots (as you point out) are extremely competitive when buying feeder cattle thus feedlot margins seldom have an opportunity to get very big at least for any length of time as we hate to miss out on any potential loss opportunities!

[wmoebis]

I agree with you JD4ME
I just got my first taste of marketing outside CWB. Never again. Got burned by a local corp. hog barn. They aren't licensed by CGC, I put my faith in their word for payment and got ripped off for almost 1/2 this years production. Seller bewhare don't trust anyone who isn't lisenced or bonded. If they aren't they aren't the kind of buissness I want to deal with nor should you.

[grassfarmer]

Cakadu, I would suspect that packer owned cattle amount to more than 10% of their kills. It is said it takes 14-17% to control the market so I would be surprised if they don't have that much control already. And it has been the growth industry this summer by all accounts - sowing up deals with struggling feedlots to get them to custom feed for them under cover. This is a huge problem which has not been addressed. We took the 10% figure to Doug Horner and I don't think he was very interested in pushing for that limitation.

[Horse]

cacadu I dont know a definate way to decide who is or is not a farmer but for sure someone with 20 cows is not realy in the game or as some say 300 is the number.
I do know there are a lot of land holders that do figure on retirement in the country when thier work carier is over and a lot of that is from tax dodges. The thing that riles me is that to work under the system they have to produce a comodety with no real expectation of profit and all that does is lower the price to me. A case in point is the crown grazing leases , to keep a lease you have to run cows on it although lots dont but there is upwards of 100 mill$ to the lease holders now if the govmt is so damed sure they need this welfare then give it to them without having to produce a calf to drive down the market for the rest of us that dont have a big welfare cheque.

[cakadu]

BFW, how much of a challenge would it be to get the feedlot margins higher? From what I understand and have gleaned from the many posts to this site, the margins are razor thin and keeps most feedlot owners on their toes. Is this really true or are there ways feedlot owners could increase their margins? I'm trying to get a better picture of how the feedlots arrive at their margins. Thanks.

[Incognito]

Talk to the farmers that were duped out of 1 million from Naber's who was bonded or the half million from CANCOM who was also bonded and ask them how they feel about the system.

[cowman]

I am old enough to remember the days when there basically were no huge feedlots. Every farmer basically raised his cattle right out to finished steers. The cattle business evolved into the system we have today for one reason...it made more economic sense...for everyone!
We had packers, back then, who delighted in screwing the farmer! They were not some sort of saints compared to Cargill/IBP?
I get a little nervous when governments start to talk about limiting the amount of cattle anyone can own? Do we live in a country where we have free enterprize or not? If it wasn't for Cargill/IBP putting some money in the feeder market the last couple of years, what kind of fall runs would we have had?
Cargill/IBP/XL have had a good run the last little while. They have done nothing illegal and have done exactly what every other business would have done...make the maximum dollars possible for their shareholders? This is bad? Does anyone honestly believe Canada Packers or Burns would have done anything different if they had still been around? Do you think the big feedlots would have been bidding more for your calves if they didn't have Cargill/IBP bidding against them?
So many cattlemen think they are getting a raw deal on their calves and right now I agree, but in the big picture over a period of time this "system" has evolved to be the most efficient one we could hope for? When this silly border BSE garbage is finally solved we will move back into that "system"? Why? Because it works.

[JD4ME]

Yes absolutely another good idea for a thread, the CGC has gotten off easy on that and I wonder if any changes have been done to the audting procedures there have you asked?