Surviving 2001

[ianben]

Ditto here Cowman!!!
The guy who de-stones before we plant potatoes has a son,about 30 now,was real keen would make a great farmer.
Gone driving a truck,very bitter that farming could not pay his morgage and not willing to let his kids miss out.
He will not be back.
Who can blame him?

Regards Ian

[pandiana]

I was reading an article a few years back. The subject had something to do with the strategy of retaining ownership on calves I think, I can't remember the details. However, I do remember the take home lesson. Depending on the strategy, you could make a profit 8 of 10 years, 6 of 10 years of 4 of 10 years.
I can't help but wonder how many store clerks, truck drivers, business executive or lawyers would accept going without an income even two years out of ten?

[ValueChainFX]

NONE!!!! But then they do not have the generations of family behind them, the life style, and the many traits it takes to be in the agriculture business do they! That is why they are not farmers???

[nakodo]

As an economist I have a bit of a problem with saying farmers go "without income" for a period of time. As asset rich, cash poor some may be they still obtain income, at the negative impact on their asset base or against operating lines of credit or against unpaid bills whatever. I put it to you MANY independent business people go "without income" under similar circumstances and they do it with less assets using credit cards and mom and dads money at much higher interest rates and with considerably more guilt.

Lets not get too victimized here, 80 % of new business startups fail after the first few years. It is not purely a "farmers problem".

[cowman]

Nakodo: You are definitely right! And a whole lot of businesses are going to go down due to this drought. I was talking to a local machinery dealer and he says it is bad. Nobody buying because they don't have any money to buy. I suspect a lot of rural towns are going to feel the pain. I do remember him telling me once that when farmers get money(I believe it was when the feds gave out the big bucks in the 80's) they spend it. So it goes right back into the economy.
I don't know if there is a solution. I don't think governments have enough money to solve this problem. I suspect farms are going to be decimated like they were in the thirties, especially if we don't get some rain. And along with them are going to go a lot of small business people. It is a tradgedy in the making.

[pandiana]

"farmers problem".
I guess I didn't define income very well. If your major farm enterprise was raising calves for market and you didn't make a profit for 2 or more years, then you would have had no income from this enterprise. And yes, many farmers carry on by borrowing against their assets. How many times can we do this and still be asset rich? Many others generate off farm income to offset farm losses. I agree that their are many similarities to small business. However, the 80% you talk about is new business. Many farms experiencing losses have been in business many years, even generations. Marginal incomes and 'losses' have gradually eroded their assets to the point that recovery is all but impossible. An yes, there will be attrition in all types of business. However, when it happens on the scale we see today in a large sector of our economy doesn't it make you wonder?

[cowman]

Pandiana:You are very right when you say"marginal incomes and losses have eroded our net value". Now I can endure a year or two of hard times but when I see no one giving a rip why should I continue on? This isn't about the general apathy regarding food production! It's about a very ugly drought that is devastating our rural lifestyle! It is a disaster and I don't see anyone caring.
Personally I could leave this business and have never a worry again in my life! Unfortunately I have a son, who deserves his chance, so I carry on....despite our uselesss government!