Where is farming headed?

[dnach]

This was the topic of a seminar in North Battleford yesterday, and all I can say is that we need a huge shift in our approach to grain farming as a whole. Some of the numbers shown by Dr.George Brinkman were sobering, to say the least. While he commended grain farmers for being good managers, and mostly efficient at what we do, we suck at marketing and debt management. Not so much at selling our grain but marketing our products to those who will pay a good return. A hard mantality for CWB supporters to comprehend. We can no longer compete in the general international grain commodity markets, and this is not soley due to subsidies. We are awash in too much debt, paying far to much in relation to net returns for land and have a grain handling system in place that is already outdated for our future needs.
Most of us already know this is hapening, but it was a good reality check to see some hard numbers. Although being diversified has helped out tremendously, it is not enough just to grow it and sell it as a bulk commodity. I found this a little disturbing considering Wheat stocks world wide are as tight as anytime in history.
Anyway, I know that that Saskatchewan farmers in peticular have achived far more than most by producing 90% of Canada's canary seed, and the majority of lentil, peas, mustard and probably have one of the most diverse crop base anywhere in the world, but it is time we look hard at what consumers want and serve those markets. Producer to consumer may be the only way to be profitble.

[ValueChainFX]

dnach, it is something we all seem to know. When we are in the coffee shop, or talking to a friend we can find the challenges in the system and even who we think made them. But it seems when someone is trying to go out and make some of these new markets happen, they are called dreamers, or told you can't change the system, or buried in red tape!

A real grass roots producer group would have so much kick butt capability you cann't even imagine! I had a government friend tell me that if the Canadian producers ever really got organized no one in the country (or government) would fight them!

Where is farming headed? There will always be a love for the land, what more can be said?

[cowman]

When they killed the Crow they killed the grain industry...some just haven't died yet! Why do you suppose we have this huge cow herd? Cow numbers jumped when the Crow died.
It just does not make sense to grow a crop that requires 50% of price to pay transportation to port. And the fact is often that is what the cost is for barley.
To export to the US is a risky business. They tend to be pretty protective of their domestic markets. In other words they stand up and protect their farmers? Sort of like the Europeans do? Then consider Canada. Do they stand up for their farmers? Do they put policies in place that protect us from the predatory practices of the US or EU?
We can't win in this game! Our federal government has made it very clear they will not support us. And why should they support the western grain farmer? We don't vote for them. We are so ununited it is ridiculous!
How come a bunch of left wing kooks like the Council of Canada can unite for a common cause and your western Canadian farmer can't? The grain guys complain about the livestock sector and the livestock guys fight with the grain producers! All trying to get a piece of an ever shrinking pie, while the government and general public sit back and enjoy the show!
I don't have a solution! But I do know that farming in western Canada is becoming a business of old men. Look around and see how many young people are entering farming as we know it? Pretty grim picture.

[ivbinconned]

Cowman; we did vote twice with the rest of canada, the Mulrony years. But it still didn't matter. We still got the shaft.
Ottawa HAS had in place, policy, to support SOME farms...if they have the right address!
In the early 80's when we had the two price wheat system Ontario farmers could haul straight to the mills and get $7.00 per bushel. Western farmers were getting $2.50...and were told to be happy.
And in Quebec of course there was the ASRA program, a Europeian style support program we explored in another thread some time ago.
Western Canada has been poorly represented by the feds and there agencies for far to long.

[cakadu]

How did this fellow at the conference deal with the fact that we own more of the land than we rent? Part of what I see is that we keep buying more and more of this expensive farm land, which creates huge amounts of debt for us.

I remember a while back someone mentioning that the land doesn't need to be owned and he almost got lynched at the meeting. How can one expect to pay for $1500 to $1800/acre land when the price of grain is where it's at?

We are cash poor, but asset rich. I've tried for a long time to get my head around trying to make money farming 4,000 acres when it can't be done with 2,000 acres.

We do things on economies of scale, when in reality we need to do them on economies of scope i.e. grow a nitrogen fixing crop with a crop that needs nitrogen.

I agree with the notion we won't get anywhere until we can learn to work together. How do we accomplish that? We 've gotten very good at working independently, now we need to become more interdependent.

[cowman]

Linda of course $1800 farm land can't pay for itself. At least not in grain or cattle. But I would also suggest rents of $60-$80 are a pretty risky business too! And that is pretty well the going rate around here and I'm sure in your area also.
Two years ago I went to a "Pursuing Profits" seminar where they had a banker giving a lecture. He stated "Machinery costs in relation to production are the biggest problem to farming profits." So what can you do? You buy/rent more land and therefore you need bigger machinery. But then you need more land to pay for the bigger machinery...and on and on! Meanwhile you're expanding like crazy to pay for all this stuff and soon you're working 24/7! For what? So you can keep the boys at the bank happy and John Deere profitable?
The fact of the matter is grain farming and cattle raising, at any level, are not profitable! Now the large farmer might have a decent living but it is not good business to make 100 grand on a $15 million investment! What other industry would put up with those kind of numbers?
If the day ever comes that the corporations own all the farms you will see a dramatic rise in food prices, because they will not run farms at a loss!

[raymondb]

Cowman-Does it make good sense for the smaller operator to continue losing money? At least the larger operator is showing some profits. Why do you pay 60 to 80 dollars an acre rent? This seems what the market will bear in your area so the people paying this must be making some money or they will not pay this amount for too long.

[bshaw2]

The larger operator should be making a profit. They beg borrow and cry for volume discounts that the smaller farmer can't get out of suppliers. BUT are they really making a profit, or does that shiney row of iron in their yard make you think that?

[cowman]

raymondb:The area I live in is not the real world! It is an area of rich boys playing farmer/cowboy. The "money" being made is mostly from tax writeoffs. Now I'm not saying people aren't making a small profit on this rented land, but it is a small profit indeed!
Big farms on cheap land probably make sense but they don't on this high priced land. The only thing that might make sense is high intensity farming like huge pigbarns or a big feedlot etc.and those type of operations are a no go here, due to the "country gentlemen" type of residents!

[raymondb]

Kinda makes some of us envious. Land in our area sells for $400 to $800 per acre and even at these prices we have to get much larger in order to make a dollar. Our cow herds must be 250 cows and larger and sell our calve at around $700/calf to realize any profit. This also assumes a mortgage at 5.5%. We have a large grain operator that farms around 50,000 acres and he is doing O.K.as he seems to get the best deals for anything he wants-volume buying and volume selling. He even says that it is better for him to get in custom combiners rather than owning his own but he needs to own his own machines because the weather tells him when to combine and his combining window is very small. The future does call for larger and larger operators-in the rel farming community where we do not have the people looking for hobbys and tax write-offs.

[cowman]

If you want to raise cattle or grain don't be envious! Those two industries are still the majority here but they aren't really viable! Thus we see an old farm population living out their last few years. Basically the only young farmers we see are Europeans with lots of money.
That's just how it is, but it's sort of sad to see the old pioneer families go. I guess the reality is if you want to raise grain or cattle you need to be way out in the sticks or have the money to support your hobby.
But I agree that with cattle or grain, big is where it is at. You need to keep the costs/unit down and lots of cheap land will certainly help. Why there are places in Sask/Man. where the land sells almost as cheap as the rent here!

[raymondb]

Right on cowman--kinda sad to see farming and ranching as we know change the way it is. People are selling out in our area too. They are selling to the rich farmers and ranchers from the southern part of Alberta who have sold their properties for the big bucks.Lots of farm family history and knowledge are just moving to the cities. Their faces smile but their eyes are sad.

[Horse]

Well I guess I must be to simple to see the problem of poor returns for farming. I have been trying to get farmers together for 40 yr now. As I see it there is no money unless you go big but if there is no amall producers to supply calves or to farm the poorer land that is uncompatable to large equiptment there would be a major shortage of almost everything. So if we are not getting paid then what do we have to loose if we do not plant or dont turn bulls out where are the large feedlots going to get calves it wont be from their own cows because they need us small producers to supply. I guess what I am trying to say is we are the masters of our own demise. It could be so good if we would just get together instead of fighting amongst our selves.

[cakadu]

Many industries get where they need to go when they finally put aside their seemingly insurmountable differences and work together. One of the commonalities producers have is getting a fair price for their product - no matter what it is they are selling.

One of the problems that I see is that it is somewhat of an adversarial system - whether by design or whether it has just turned out that way. Case in point is the hay shortage last year. I can't say that I see anything wrong with the economics of supply and demand which dictates price. Some of the hay prices that we saw last year defied logic when you consider the fact that the fellow with livestock right across the road needed it to stay in business, yet a reasonable price was often not negotiated.

When livestock prices are good, as a rule grain is down and vice versa. There is little that appears to work together.

How do we start working together in a more reasonable fashion so that everyone can win? Does it have to necessarily be that if you loose, then by default I win?

(Welcome to the discussion Horse. Always good to get new people joining in.)

[cowman]

Linda: I know what you mean about the various groups not working together. A classic example was the drought last year and the feed situation.
When the grain farmers saw a chance to make a buck they went for it. Which I don't entirely blame them for. In retrospect it was a very short sighted thing to do. When the cattle business realized they couldn't survive with the prices being asked for feed they went looking for another solution. Thus we had American corn come in and straw/hay from eastern Sask. and Manitoba. With these imports came a mean little grain disease, fusarium.
One cattleman I talked to told me the local grain guys wanted $60/bale for straw in the field. He imported straw from Yorkton for $35 in the yard. He said I hope the greedy suckers get fusarium. It will mean more silage for our cattle! And a lot of straw sat all winter in the field and was burned in the spring! And the barley sat in the bin!
I think all livestock and grain farmers need a wakeup call! The fact is we need each other! No way can the grain farmer export all the grain and no way can the livestock industry import all its feed!
There needs to be a balance so everyone makes some money.
I had no problems with feed or pasture last year. Why? Because my neighbors helped me out. And why was that? Because I help them out when they need it. You get treated how you treat others in this world. Or at least that has been my experience!