A
Anonymous
Guest
I see whose expanding and why and I see whose blaming and why.
I don't need a financial statement to see the obvious.
~SH~
I don't need a financial statement to see the obvious.
~SH~
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Can the family farm survive?
- Thread starter Jason
- Start date
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Sandhusker
Well-known member
~SH~ said:I see whose expanding and why and I see whose blaming and why.
I don't need a financial statement to see the obvious.
~SH~
OH, ok.........................
rkaiser
Well-known member
And then there are those who think they know it all, ranch to perfection, support integration and work with groups like the USBP, and finally decide that trapping gophers is a better way to make money. While all along telling everyone and anyone else in the industry how to do it right. :lol:
Jason
Well-known member
One thing everyone seems to agree on is that costs are climbing in the ag sector.
Machinery is pricey to say the least. Land has become a seperate investment very little of it will pencil for ag.
Oldtimer brought up a very important fact. Producers keep paying more for pasture rent as the land is bought up. Who forces this? Competition of other producers. The land investor wants a return, if someone offers $30 per aum why would he only take $20? Calf prices climb and another producer wants to expand they offer $35
SH again mentions how many hobby ranches work at breakeven levels. It has been posted before something like 50% of the cattle are from herds of around 25 head?(something like that, a significant number anyway)
Should the gov't legislate how many cows you have to own so professional ranchers don't have to compete against these little hobby outfits?
Machinery is pricey to say the least. Land has become a seperate investment very little of it will pencil for ag.
Oldtimer brought up a very important fact. Producers keep paying more for pasture rent as the land is bought up. Who forces this? Competition of other producers. The land investor wants a return, if someone offers $30 per aum why would he only take $20? Calf prices climb and another producer wants to expand they offer $35
SH again mentions how many hobby ranches work at breakeven levels. It has been posted before something like 50% of the cattle are from herds of around 25 head?(something like that, a significant number anyway)
Should the gov't legislate how many cows you have to own so professional ranchers don't have to compete against these little hobby outfits?
Cowpuncher
Well-known member
Hall & Hall is one of the large real estate agents and loan brokers dealing with ranch properties in the Rocky Mountain west.
A couple of years ago, they said in their newsletter that you can forget about ranch land ever paying for itself. There are a lot of very well to do people who have liquid assets enough to buy large ranches. They do it for a number of reasons - recreation, diversification, bragging righrts, etc.
That means that if you want to buy a ranch, you have to have the resources to compete with the Ted Turners of the country. Not many do.
We were able to buy our ranch out of repossession. Since were were already retired with adequate retirement income and not much desire to see the world. We since have expanded the ranch, rebuilt the fences, added water systems, etc. until it now an 800 cow operation.
We felt that the return on the ranch would not be current, but that it would appreciate faster than inflation. So far, we have been right.
The only way the average guy can buy a ranch is to have some capital and take advantage of someone else's bad luck. Inheritance works, too.
All the smaller guy has to do to get out of the ranching and farming life is to buy a bunch of high dollar equipment and have one bad year, or a divorce.
Droughts, blizzards, spendthrifts and stupidity are always waiting in the wings to run the small guy off the land.
A couple of years ago, they said in their newsletter that you can forget about ranch land ever paying for itself. There are a lot of very well to do people who have liquid assets enough to buy large ranches. They do it for a number of reasons - recreation, diversification, bragging righrts, etc.
That means that if you want to buy a ranch, you have to have the resources to compete with the Ted Turners of the country. Not many do.
We were able to buy our ranch out of repossession. Since were were already retired with adequate retirement income and not much desire to see the world. We since have expanded the ranch, rebuilt the fences, added water systems, etc. until it now an 800 cow operation.
We felt that the return on the ranch would not be current, but that it would appreciate faster than inflation. So far, we have been right.
The only way the average guy can buy a ranch is to have some capital and take advantage of someone else's bad luck. Inheritance works, too.
All the smaller guy has to do to get out of the ranching and farming life is to buy a bunch of high dollar equipment and have one bad year, or a divorce.
Droughts, blizzards, spendthrifts and stupidity are always waiting in the wings to run the small guy off the land.
cowzilla
Well-known member
Jason? Did I hear you right? You want the government to control the size of a hobby farm, what constitutes whats a hobby farm ? Cowpuncher just said he's retired and has 800 hd ( must just be a hobby right :!: ) If this and a set price for unit of production is what interests you go no further than the next Dairy Barn. In our area these Dairy guys are kicking butt when it comes to farm income. They are the most stable farm operations in the country.
Jason
Well-known member
I just asked the question would any of you support the gov't limiting hobby ranches?
When I ask a question it isn't always that I don't know the answer, sometimes it is for an opinion.
The common idea from nearly everyone in this thread is that land is over priced based on ag value.
The next logical question is then what about ag? Does it deserve to survive if it can't do so on it's own merit?
I know we all need to eat and food doesn't come from the store originally. I see the point about relying on foriegn countries for too much of our needs like food.
How many think making food worth say 30% of an average income is the way to support ag? In Alberta the average wage is $44,000 per year that would make the food bill $1222/month.
When I ask a question it isn't always that I don't know the answer, sometimes it is for an opinion.
The common idea from nearly everyone in this thread is that land is over priced based on ag value.
The next logical question is then what about ag? Does it deserve to survive if it can't do so on it's own merit?
I know we all need to eat and food doesn't come from the store originally. I see the point about relying on foriegn countries for too much of our needs like food.
How many think making food worth say 30% of an average income is the way to support ag? In Alberta the average wage is $44,000 per year that would make the food bill $1222/month.
Bro
Well-known member
How many think making food worth say 30% of an average income is the way to support ag?
Oh my! I believe there would be a revolution.
Oh my! I believe there would be a revolution.
cowzilla
Well-known member
You wouldn't need that much Jason. A 5% levy on current food costs going directly to primary producer would create good revenue and I don't think it would cause negative responce from consumers, or would it :roll: I agree land is overpriced for most Ag but that will not change and when land prices do drop ( on occasion ) its because of some farm disaster and then most farmers still are not in a position to buy it anyway :!: But is farm land really exspensive? How many new $500000 houses will be built in your province this year and all you can do is live in them :wink: Out here for the price of a new diesel 4\4you can buy 160 acres of good land.In 3 years the truck is worth less than half. Guess what the land is worth?
Jason
Well-known member
Bro I think you might be right about a revolution if food went up like that.
Cowzilla, the land value rising is a good point. But here a 1/4 brings 3 times what a new truck costs. It was this high in the early 80's but only a couple pieces are still ownded by guys that bought at that price last time. This time around it is being bought up by Hutterite colonies.
Would a 5% levy help producers? How would it be determined who gets it?
Say beef retails at $3/lb just for a round number. 5% is $0.15/lb. How would each producers share be determined? One producer sells weaned calves at 500 pounds one at 600 some background until 750 or even 900. Each pound of that animal doesn't end up the grocer's shelf.
Let's use the 600 pound wean wt and 200 cows. Lose 10 calves for whatever reason, keep 20 replacements sell 170. Use a 60% dressed weight average that means each calf sold gets a $54 subsidy. $9180 total.
Where would that $9180 go? Oldtimer said another ranch willpay more for pasture, could this drive that cost higher because the rancher down the road wants to run more cows? He figures $54 per calf, 4 months of pasture he can pay $10 a month more to get new leases and it comes from the levy.
How would feedlots react and packers? Could they try to use the $54 figure as leverage? Could they make a case for a levy as well? Could the levy reduce beef consumption?
Every action causes equal and opposite reactions.
It is interesting how no one has been able to blame pasture competition or high land prices on the packers. Can anyone tell me how if the packers were handcuffed and allowed to only make $10 a head how land prices would drop, or grass leases would be easier to get at lower rates?
Cowzilla, the land value rising is a good point. But here a 1/4 brings 3 times what a new truck costs. It was this high in the early 80's but only a couple pieces are still ownded by guys that bought at that price last time. This time around it is being bought up by Hutterite colonies.
Would a 5% levy help producers? How would it be determined who gets it?
Say beef retails at $3/lb just for a round number. 5% is $0.15/lb. How would each producers share be determined? One producer sells weaned calves at 500 pounds one at 600 some background until 750 or even 900. Each pound of that animal doesn't end up the grocer's shelf.
Let's use the 600 pound wean wt and 200 cows. Lose 10 calves for whatever reason, keep 20 replacements sell 170. Use a 60% dressed weight average that means each calf sold gets a $54 subsidy. $9180 total.
Where would that $9180 go? Oldtimer said another ranch willpay more for pasture, could this drive that cost higher because the rancher down the road wants to run more cows? He figures $54 per calf, 4 months of pasture he can pay $10 a month more to get new leases and it comes from the levy.
How would feedlots react and packers? Could they try to use the $54 figure as leverage? Could they make a case for a levy as well? Could the levy reduce beef consumption?
Every action causes equal and opposite reactions.
It is interesting how no one has been able to blame pasture competition or high land prices on the packers. Can anyone tell me how if the packers were handcuffed and allowed to only make $10 a head how land prices would drop, or grass leases would be easier to get at lower rates?
YoungFarmer
Active member
I think comparing the depreciation of a 4x4 truck to a quarter section of land as an investment point of view doesent make much sense. I invest to make money. If you are assuming your quarter section of land will go up in value then this I would consider real-estate speculating not farming. How a person wants to spend their equity or available cash is up to them. But if the return on the farm land is only 1 or 2% then it is impossible for any young farmer to leverage himself substantialy into financing without significant equity to back him up. And most likely this equity will only come from inheritance, but how long can this cycling of equity last in the farming community?[/quote]
frenchie
Well-known member
youngfarmer..I think you are right..why would anyone purchase land with that kind of return.
I would rather see a young feller put most of his money into cows and lease some land till he gets decent cashflow.
I would rather see a young feller put most of his money into cows and lease some land till he gets decent cashflow.
Charlie1948
Active member
Jason read my letter and see if you don't agree.We have been cheated all our lives and it is time to stand up and fighrt for our survivial.We can be independent but still sell our goods for a proffit every year.And be independent and git the government out of our business.Every one wants totalk talk talk ( Hell ! ) lets do something about once and for all.
I sent this letter to our state Farm Bureau Illinois and The President is behind it 200 % and we have gotten several e-mails and phone calls letters all good responces.Let me know what you think
Thanks Charlie
[email protected]
Go to search Bull session Oct 18, 11:01 p.m. By charlie1948
I sent this letter to our state Farm Bureau Illinois and The President is behind it 200 % and we have gotten several e-mails and phone calls letters all good responces.Let me know what you think
Thanks Charlie
[email protected]
Go to search Bull session Oct 18, 11:01 p.m. By charlie1948
A
Anonymous
Guest
Charlie 1948-- Expecting Farm Bureau to back family type farm operations over corporate interests anymore is quite remote....Over 80% of their membership has no connection to the farm anymore-many only belong to take advantage of the insurance...They make much more off their insurance and corporate investments then they do their farm involved grass roots members-- so why would they speak out against corporate or Big business practices that might affect the industry?.....
Jason
Well-known member
No one can seem to pinpoint how big business is at fault for high land prices or high pasture rents.
The costs of inputs are going up for all industries. How do you pick winners or losers? The markets allow for efficiencies to select the winners that can compete.
It seems to me that farms will either be corporate (many families incorporate) or hobby. Get big or have support from elsewhere.
The costs of inputs are going up for all industries. How do you pick winners or losers? The markets allow for efficiencies to select the winners that can compete.
It seems to me that farms will either be corporate (many families incorporate) or hobby. Get big or have support from elsewhere.
A
Anonymous
Guest
In many situations it is the investment of profits from Big business that is buying up this land- as tax shelters and long term investments...Jason said:No one can seem to pinpoint how big business is at fault for high land prices or high pasture rents.
Believe me --When a corporation that has nothing to do with agriculture, moves into one county and buys up 3-4 large (2000+ cow/calf, feedlots, yearling allotment, etc) plus several small ranches and spends $25 million cash it does effect land prices and pasture rents...Then when you throw in the fact that several other corporate interests are doing the same with single large or multiple small ranches (many hunting consortiums are doing the same) It makes an effect....Especially if they have no committment to agriculture and/or no real need to make immediate income from the property--you operate on their terms, pay their rent or they just rent or sign an easement with some conservation group to raise wildlife or make a private hunting preserve......The more land you take out of grazing and Ag use runs the price of whats left higher....
Bro
Well-known member
It seems to me that farms will either be corporate (many families incorporate) or hobby. Get big or have support from elsewhere
I agree with most of this statement, but where I am at there is some 10000 + acre grain farms that are getting into trouble. Getting big is just a short term fix (if you can afford it) - who can make money on $2.00 feed wheat? Some of the big players have money coming from europe to keep them afloat. THis ag industry cannot sustain itself at the rate we are going without massive gov't intervention, or untill the real estate bubble bursts. The only way a farm can expand is to rent/purchase more land (buying is more stable). The way things are going, cattle cannot pay for the land aquisition, (grain farming use to, not any more either) while the price of land continues to go up. Remember certain inputs are going up even faster than the rate of inflation is. Now a guy has to raise 500 cows to manage even a reasonable amount of debt and live on, 15 years from now it will be 600 cows. To realise this increase, you have to procure more overpriced land, as even with intensive grazing, your land base will have to increas after a while. If you are given land these numbers may be lower). You will always be behind the eight ball. The other option is to have a $40 000 dollar a year job and raise your 150 cows on the side. THat is where I see the cattle industry heading, and looking around me, most people operate this way - very few profesionals.
I agree with most of this statement, but where I am at there is some 10000 + acre grain farms that are getting into trouble. Getting big is just a short term fix (if you can afford it) - who can make money on $2.00 feed wheat? Some of the big players have money coming from europe to keep them afloat. THis ag industry cannot sustain itself at the rate we are going without massive gov't intervention, or untill the real estate bubble bursts. The only way a farm can expand is to rent/purchase more land (buying is more stable). The way things are going, cattle cannot pay for the land aquisition, (grain farming use to, not any more either) while the price of land continues to go up. Remember certain inputs are going up even faster than the rate of inflation is. Now a guy has to raise 500 cows to manage even a reasonable amount of debt and live on, 15 years from now it will be 600 cows. To realise this increase, you have to procure more overpriced land, as even with intensive grazing, your land base will have to increas after a while. If you are given land these numbers may be lower). You will always be behind the eight ball. The other option is to have a $40 000 dollar a year job and raise your 150 cows on the side. THat is where I see the cattle industry heading, and looking around me, most people operate this way - very few profesionals.
cowzilla
Well-known member
Maybe some of us older guys are too hungup on land ownership. I don't think big corporations want to spend a lot of time looking after there own land. But a younger farmer with good education will likley be able to secure long term leases. Only dedicated hard working people are going to stay in cowcalf opperations and without that baby calf there is no cattle industry :!: [Some of you are concerned about the use of Old Money to keep farms afloat . In most towns a lot of other businesses have been built and kept up that way. Idon't think that is unusual.
A
Anonymous
Guest
cowzilla said:Maybe some of us older guys are too hungup on land ownership. I don't think big corporations want to spend a lot of time looking after there own land. But a younger farmer with good education will likley be able to secure long term leases. Only dedicated hard working people are going to stay in cowcalf opperations and without that baby calf there is no cattle industry :!: [Some of you are concerned about the use of Old Money to keep farms afloat . In most towns a lot of other businesses have been built and kept up that way. Idon't think that is unusual.
cowzilla-- You are so right about the ownership... I think some of it comes from the history of us of the older generation being sons and daughters or grandsons and granddaughters of immigrants that came from countries where they weren't allowed to own property-- worked as sharecroppers, or communal workers for the rich or government...It was a very important ability to be able to own and work YOUR OWN land-- and to be able to build and improve upon your own designated areas of even government land......
