Lack of money

[cowman]

It seems that no branch of agriculture is making any money. Cattle, hogs, grain. Everyone plowing along but not making anything! Grain prices are not all that great and the costs seem to be rising all the time. How come everything seems to be going up, including food, but the producer is left with less and less?
What happens when it actually costs more to grow a crop than what you get for it? Which is happening right now in the cow/calf business and not far off it with hogs? How long can the Canadian farmer operate subsidizing the food of Canadians? Has farming become an unviable business? When you put in so much work and capital shouldn't you expect to recieve more than a kid working at MacDonalds?

[jensend]

as the grain, fertilizer, chemical co's got bigger and reduced competition they effectively took control of the investment grain farmers made to establish their farms. now its like the company store. they sell you the inputs and buy the production. they want to finance the inputs because that increases their hold on the farmer. the problem is that as parasites they dont know when to quit bleeding the host. the gov. has allowed all this to happen so now canada is a high cost producer and the farmers are completely vulnerable to the reduced prices from increased production in the subsidized countries.

[cowman]

I know an organic farmer who seems to think he is doing okay. He's not a big farmer and a good chunk of his income comes from a market garden. He raises some grain and hay. His grain crops are so-so but you should see his vegetables! I can honestly say I've never seen better.
He does a lot of plowing down hay(alphafa/sweet clover) and over his 320 acres I doubt he produces a lot of grain. The trick is he gets a very good price for everything he produces.
The fertilizer, chemical and grain companies don't own him! He sells everything off the farm and has buyers waiting...I realize that isn't practical for everyone but it seems to be working for this guy.

[wd9]

Are you bled dry because you farm like most of the rest of the farmers? The only way to stay competitive is to be a little different than the big crowd. Organic farming may provide that advantage if it is done right. Guys with 10,000 acres can be worse off than guys with 1000. Your uniqueness of product, process, spending pattern, willing to maximize your investments is the key. Input suppliers will continue to raise the prices to the absolute limit of what the market will bear. Money is made in farming by being just a little better/inventive than the rest. No amount of aid or raising grain prices will help because the cost inputs will just follow them. Simple and basic economic rules ensure this. You must understand this basic fact to make money. It is not what you make - but what you save.

Brutal truth here, if you're not making money, you're not doing it right. Seek good and profitable financial advice, spend less than you make, and farming does make money.

If everyone farmed the same, no-one would make money as inputs would be exactly what everyone made, so be creative, make some money or find an occupation that will make money. There is so much oppportunity in this world, just go for it.

[cowman]

And if the truth were known there is a whole lot more opportunity in a lot of things other than agriculture! But if you are bound and determined to make a living scratching in the dirt then I have to agree! Live cheap, die rich! Which is okay but it doesn't really cut it if you are young and trying to raise a family, thus our lack of young farmers!
Personally I believe organic is the way to go. You are totally correct about the input thing rising to take any profits. Time to retire all the old chemicals, hormones and GM products. They just put cheap and probably unhealthy products on the consumers plate. We need to get the consumer to pay more,not less, of their disposable income. We need to produce less food and organic production will do that. Of course we also need a government that will keep out the cheap garbage if we ever go that way as a nation.

[tersta]

I’m not a farmer, yet. We’re looking for land in Ontario SW and I’m finding a trend. Here, on prime agricultural land, we’re building housing developments and relying mostly on imported produce. Good cropland is rare and what’s left is priced high. The farmers on the land know their market and they know it’s not young farmers, but developers who want it. There’s a nice vineyard in the Niagara region that’s going for under $40,000. The taxes are stated as $14,000! It sure looks like somebody wants that farmer gone, doesn’t it?

In the past, wars were fought with military force, then nuclear force was threatened. Now, battles are won with MARKET FORCE. It seems to me that farm receipts are unbelievably low because you’re being pushed out of agriculture. That’s why I’m writing. Don’t give up.

I think you are all on the right track. Get yourselves out of the grips of the big chemical companies. I think the success of organic farmers isn’t so much that they’ve eliminated chemicals, but they have eliminated part of the chain that dictates what their produce is worth. Their marketing strategy is more direct to the consumer and their benefit claim is healthier food, not lower prices. Note that the claim isn’t scientifically challenged. Consumers want a healthier environment overall. They choose organic food because it is the small niche environment that they have control over.

The small farmer does have a real advantage, because he can quickly and easily diversify production. He can enhance his crops by having a few livestock, which produce soil nutrients, meat, milk and cheese. He can keep bees to pollinated his crops and yield a bit of honey too. He can keep sheep and have spring lamb for the market and a bit of wool for stuffing pillows and holding spinning and weaving workshops on the farm. Customers who come for the workshop might return in the fall for a hayride or to pick their own apples or pumpkins. While they’re there, they might be interested in joining the produce coop. Everything goes full circle with the farmer interacting directly with his customers. He keeps his soil clean and his animals healthy and the consumers see that the environment is well kept. That’s what they are buying – a little piece of healthy living.

A lot of city dwellers, like me, want to get out to the countryside. I’m not interested in a large lot and high taxes, which is what most would be in for. I’m also not looking to lose my shirt trying to squeeze $20 a bushel out of the land and against the odds with Mother Nature dealing the cards! When I Buy the Farm, so to speak, I will die trying to make it a paradise for others to enjoy the natural lifestyle that can only be achieved in a well-balance rural environment.

You guys are one up on me. I hope this letter helps you realize your advantage. Take hold of your opportunities. Take stock of your assets and don’t let the market always dictate the worth of what you produce. Above all, stick together. When something is working for you, share the idea with your neighbour.

[cowman]

tersta: The only real problem with your concept of farming is it doesn't work. Well I guess it could if you didn't owe any money and you wanted to live like a pauper!
I know, I know...a simple life right? But hey we all love the big boy toys! The new pickup, the latest high tech gadget. Farmers are no different than anyone else! We love the two weeks in the Caribbean as much as your Toronto stockbroker!
So we try our best to max out our production and profits like anyone else.
I understand what you are trying to say but it really isn't possible to make an acceptable income that way anymore.
The only ones who could possibly do it are old men like me who have another income. And quite frankly I'm not to keen on any extra work! I'd rather spend my spare time on coffee row or doing my hobbies.

[tersta]

OK cowman, you're breaking my heart! What if you kept the big farm running and had a few acres reserved for utopia? So, you can't be in the fields AND run the store front - hire some kids to sell a few bags of flax seed for $2/lb like it goes for in Toronto. What about the concept of offering farming apprentiships or agri-tourism? Free labour, while you pass on the trade. How about farming 'functional food', that's packed with more minerals and vitamins than the imports? Same stuff you're growing. Different market and onsite packaging and sales.

Does none of this sound like a way out of the rut for farming? I tell you, living like a pauper might be better than being a slave on a ship of fools.

[cakadu]

Whilst we are waxing nostalgic does anyone remember when there were more crop rotations and multi-species cropping so that you could grow nitrogen fixers with those plants that required nitrogen. Economies of scope were more the order of the day than economies of scale.

Now the crop rotations seem to be barley - snow - barley or barley - snow - canola with all the chemicals you can apply.

I was at a conference this week where one of the fellows was talking about the research that was going on in the 50's - sustainable agriculture without the use of chemicals; they weren't there, but they were getting there. Enter the chemicals and the research dollars were poured into chemicals and the dollars for the other kind of research just kind of fell by the wayside.

Now they are going back to that research and having another look. Putting chemicals on the land is taking care of symptoms, according to this fellow. It got me to thinking that maybe it is. What are your thoughts?

The more chemicals we use - and I'm talking pesticides, herbicides, fungicides, whatever you "cides" you want to use on your crops and the more heavily reliant we become on them, the more we have to rely on better versions coming out because we have to deal with those pests that make it through the sprays and become "super bugs, weeds" etc.

It is very true about the economies of scale and there are all kinds of models that exist that show that the bigger you become the less efficiently you use your inputs. If you can't make money on 2,000 acres, you won't make it on 4,000. The circle just keeps getting more and more vicious.

[cowman]

Tersta: Maybe it would work in southern Ontario. I live on the prairies and we are fairly limited in what we can grow. Our climate does limit us to a certain extent.
Maybe if I was younger I would try some different things but not now. But I am fascinated by how some of these young people grow market gardens and fruit trees. And without a doubt organic food is the way to go.
And hey, if it will work for you, go for it! I'll be cheering you on.
My farm is going to become housing sooner or later. Just a fact of being close to a rapidly growing city. Used to bother me but nothing will change that fact. I just hope I don't live long enough to see it. I guess my kids will have a good time blowing the money.

[tersta]

Cowman, you're sounding tired and defeated. It's not a foregone conclusion that urban sprawl has to consume outlaying land. It's bad government that lets it happen. For two-hundred years, this country focussed on establishing the infrastructure that would extend civilization into the wilderness. In the latter half of this century, centralization has been on the agenda, with the mass of development focussed at the border. This is making the nation very vulnerable, given that the more agricultural land we cover with concrete, the more we have to rely on other nations for our food.

Talk of 'sustainable' economics is pointless, without urban sprawl management. Here's a prime example: Toronto Island Airport. Would it really inconvenience a traveler to spend another half hour being shuttled from an airport in Vaughan or King? Here's another: The Village of Port McNicoll on Georgian Bay has one of the largest grain elevators in the world. It's retired, the rail system has been ripped out and the lakers don't even pass by Port McNicoll anymore. If Kellogs or General Mills or Canada Breads had have located there, the story would have a very different ending. So, why wasn't the infrastucture built to support something like this? According to a municipal councillor, 'working' toward economic development in the township, if such an opportunity did arise, he would support location in the neighbouring municipality, where urban growth was already in existence.

The more centralized we become, the denser the pollution and the higher the disease rate and the more we need high-density nutrients in the food we eat. I don't think the organic and functional food trends are fads anymore than botted water or dietary suppliments are. Let's hope that alternative economics arise fast enough to keep up with the health problems that develop from conventional ones!

[cowman]

tersta: In an ideal world we would save the good land and build houses on the garbage land, however that is not reality...you know it and so do I!
In my municipality there is a lot of talk about a task force on land use. While they dither and wax poetic about the rural way of life the housing projects continue to consume the best land in the county. They turn around and build a dump on three of the best quarter sections around. A creek runs right through this dump and empties into the river just up from the water treatment plant for the city! Go figure.
In spite of my desire to not see my farmland turned into an urban playground, when they come knocking with their checkbook in hand, I'll be selling! Why? Because if I don't the next guy who owns it will!
Is that the wrong way to think? My great grandfather bought this land from the CPR. It's mine now but I have an obligation to get the most out of it for the generations down the road. It is my duty to get the maximum value out of it and quite frankly agriculture is just not going to do that! I believe we must all manage our assets in the way we see as best. That is our right as a landowner.

[tersta]

If the farm wasn't paying off, I would do the same.