Where's It All Going!

[Northern Rancher]

I've been getting alot of company the last while and of course the main topic is the state of farming and ranching-these guys are all successful in agriculture but most of them are questioning the whole deal. Everybody is running outfits that arebigger than their father's ever imagined most are a single enterprise-all cows or all grain and everyone is unhappy about their exposure financially. This might be heresy but we might see the day where farms and ranches shrink in size-someone works off farm-most do now anyway up here and the whole bigger is better refrain falls by the wayside. I know myself that for us to expand to include the kids we'd have to eliminate some of the neighbors-maybe we're better off divvying up what we already have. Megan is about to graduate into a pretty secure well paying job-she wants to buy some ground-with her off farm income she can eliminate the banker more or less is she doesn't get too big. I'm not sure what the answer is but laying around here bored all the time gives a person lots of time to think.

 

[jeff in ca]

NR,
I have the same feelings at times. We are in a drought here. Back in February I applied for a government job. Thinking I would do this deal part time. The summer was looking pretty bleak with the lack of water and such. Well we had a great Spring. I have hay lined up for a the rest of the summer. Still I wonder. I get tired of saying and thinking if we make through this year things will better. I am a little operator, so I have to make the best decisions or I will sink. I have been fortunate enough to play the ranching game full time for the last 20 years. I just worry about the next 20 with a family and all now. I guess the Canuck government is like the US government they don't seem to care about agriculture. Till we get it figured out I am gonna keep plugging away. I am too lazy to work and too nervous to steal, so I guess I'll keep ranching.

 

[Faster horses]

NR, nothing has really changed. It's just that you have more time
to think. Don't go getting all anxious on us. Everything is the same as it was last week, last month, last year. You have a wonderful family and
a full life. How could it be any better?

Sure, we face a few different problems now and then, but basically
you are there doing what you want to do. Sometimes we just
think TOO MUCH.

FWIW

 

[Big Muddy rancher]

NR, nothing has really changed. It's just that you have more time
to think. Don't go getting all anxious on us. Everything is the same as it was last week, last month, last year. You have a wonderful family and
a full life. How could it be any better?

Sure, we face a few different problems now and then, but basically
you are there doing what you want to do. Sometimes we just
think TOO MUCH.

FWIW

Yea Cory don't you know thinking is dangerous.

Uncharted territory for most of us. :wink: :lol: :lol:

 

[burnt]

NR, nothing has really changed. It's just that you have more time
to think. Don't go getting all anxious on us. Everything is the same as it was last week, last month, last year. You have a wonderful family and
a full life. How could it be any better?

Sure, we face a few different problems now and then, but basically
you are there doing what you want to do. Sometimes we just
think TOO MUCH.

FWIW

Yea Cory don't you know thinking is dangerous.

Uncharted territory for most of us. :wink: :lol: :lol:

Huh? What's that?

 

[Northern Rancher]

I said I was thinking not Quiting lol. Far from anxious I was just relating some conversations-we've been on this place 92 years I'm sure there have been some changes in management philosophies over the years. Thinking is good your brain is like sopme other organs us men are fond of the more you use them the better they work.

 

[burnt]

Now I'm starting to understand . . . . :wink:

 

[Shortgrass]

My crystal ball is no better than anyone else's. Three things that I'll bet on:
1. People will not stop eating red meat.
2. Agriculture will not look the same in 100 years, any more than a cowboy from 100 years ago would not notice change in todays ranches.
3. We'll still need rain and sunshine, like Abraham did for his cattle!

I would not hesitate to encourage young people, who love this, to do whatever it takes to make it work for them. They'll do things I've never thought of.

 

[leanin' H]

Agriculture, like any other buisness, is always evolving. What shouldn't change (hopefully) is the love of the land, livestock, traditions, ect. My Grandpa raised his family with the ranch, 200 head of cattle and a few mining ventures. Around here nowadays it takes a lot more to reley only on the cows as an income. But smaller operations do have different options than large outfits do. To me, everyone has to start thinking outside the box if you will. We don't have to throw away tradition or what works. But we have to always be looking ahead and planning for the changes that are over the horizon. Having off ranch income may be good but it takes time away from the ranch. Theres always a trade off. At the end of the day we are in the buisness of making our customer happy. That may be the buyer of your weaned calves. Or a outfit who buys bulls from ya. Or a lady needing hamburger. Whoever they are, wherever they are, they and thier checkbook will help decide our future. :wink:

 

[Faster horses]

I had this thought today.

We are our own best customer. So much of what we do or
raise is purchased by other ranchers/farmers.

 

[Cal]

most are a single enterprise-all cows or all grain and everyone is unhappy about their exposure financially.

It's alot more work year 'round.....but if you can diversify with both, and have some other unrelated income (not working for someone else, but income producing assets) it's a little less of "having your eggs in one basket" and utilizing some of ones machinery a little better, IMO.

 

[Anonymous]

Being the biggest bestest - and making their million(s) before they are 40 years old seems to be the dream/goal of every capitalist of this modern business world- no matter who you screw...Bigger, better and faster than everybody else....
But thankfully some still believe in the old dreams of our fathers and grandfathers- of owning their own land, and raising their family on it to the best of their ability, producing the best product/cattle they could, and that it was more important they knew that the people that knew them, trusted them-and packed them that final trip when the time came- talked about their honesty and caring and living of/for life-rather than the millions they took to their grave with them- and wondering how they could screw them into the ground.... :???:

 

[Denny]

I remember cutting hay 30 years ago with a #5 john deere mower 7' bar and a H farmall now I use a Rowse double 9. 1 man now days should be able to run 3 times the cattle as 30 years ago with the modern equipment.

Biggest problem is alot of people want to go play every weekend and that has never been in the cards on any farm or ranch.

If I did'nt make hay and silage for my cow's I'd get a job in town good fences and boughten feed what real work is there on a daily basis.

Agriculture has been an industry of small returns since long before my grandfather was farming and it has'nt changed much.

 

[RSL]

This is a good question. We figure based on commodity production that we would need to control 1500 cows (no hired hand). That means we would have to move shop from our current locale and still incur a huge debt (risk) load.
We are not averse to risk, but NR raises a good point. Why do we ranch?
We are profitable with our smaller herd, but it is not enough to support two families. All of our other income comes directly from agriculture and that knowledge greatly improves our profitability on the ranch. The question really is what are we selling (not just beef) and what are we trying to accomplish. If we are accomplishing our life/family/business goals then that is the right size to be.
I had a good chat with a young guy today who felt that his off farm work kept him balanced and let him focus on the money making work on his farm, rather than being trapped in day to day labour. I think he has a good point.
I can see smaller farms coming back into the picture, but around here they will be very small as land and rental prices are currently outside the bounds of productivity (but not creativity).

 

[Northern Rancher]

Guys used to put up hay with horses and never miss a rodeo-visit their neighbors every once in awhile and still paid their bills. I don't begrudge the hard days but I sure don't feel guilty about the easy ones either.

 

[Grassfarmer]

I've been having some good discussion on past/present/future trends and profitability recently as my parents have been visiting from the old country. One observation that my Dad and I agree on is that the 1945 to early 1980s was a golden time for agriculture (in Europe anyway) farms were prosperous way ahead of what they had achieved in the previous 200 years. Farmers/ranchers sons all wanted to enter the industry rather than the least academic son taking over the farm while the rest were running colonial empires in far flung corners of the world.

That said it is a sorry excuse for a business when off farm income is needed to support the families of the most important workers in the world (food producers) Certainly the numbers game doesn't work - running huge numbers of cows for a $50/year margin is a mugs game and you can't buy enough acres to run the thousands you need. We need to get more margin from less cattle to build a sustainable future. We can do this to an extent on our place by direct retailing beef but that is not an option for everyone. Increasing land productivity is our other top priority - we could produce so much more per acre than we do now if all the land/grass was as good as the best. As long as this extra is not produced using bought in inputs or machinery. Sun, grass and water are all free (although sometimes not readily available :roll

I really think ag producers around the world need to smarten up and unite - we often hear it said that we suffer because there is a "cheap food policy." I totally disagree with that - consumers pay enough at the store to allow us a decent income but corporate concentration at retail/processor level prevents the money getting back to producers. What we have now is not a cheap food policy it is a "cheap raw material" policy. Processors/retailers have the luxury of buying their raw materials from producers at below the cost of production because producers either get subsidized by their Governments or they subsidize themselves by taking off farm jobs. We have got to change this situation and consumers could be our allies in this battle.

 

[burnt]

I've been having some good discussion on past/present/future trends and profitability recently as my parents have been visiting from the old country. One observation that my Dad and I agree on is that the 1945 to early 1980s was a golden time for agriculture (in Europe anyway) farms were prosperous way ahead of what they had achieved in the previous 200 years. Farmers/ranchers sons all wanted to enter the industry rather than the least academic son taking over the farm while the rest were running colonial empires in far flung corners of the world.

That said it is a sorry excuse for a business when off farm income is needed to support the families of the most important workers in the world (food producers) Certainly the numbers game doesn't work - running huge numbers of cows for a $50/year margin is a mugs game and you can't buy enough acres to run the thousands you need. We need to get more margin from less cattle to build a sustainable future. We can do this to an extent on our place by direct retailing beef but that is not an option for everyone. Increasing land productivity is our other top priority - we could produce so much more per acre than we do now if all the land/grass was as good as the best. As long as this extra is not produced using bought in inputs or machinery. Sun, grass and water are all free (although sometimes not readily available :roll

I really think ag producers around the world need to smarten up and unite - we often hear it said that we suffer because there is a "cheap food policy." I totally disagree with that - consumers pay enough at the store to allow us a decent income but corporate concentration at retail/processor level prevents the money getting back to producers. What we have now is not a cheap food policy it is a "cheap raw material" policy. Processors/retailers have the luxury of buying their raw materials from producers at below the cost of production because producers either get subsidized by their Governments or they subsidize themselves by taking off farm jobs. We have got to change this situation and consumers could be our allies in this battle.

This, in my opinion, is one of the most insightful statements ever. The only part of it which which I cannot fully agree is that of the retail price being sufficient. I think it is too low - why else should the consumer be spending only 9 or 10 percent of their disposable income on food? Farmers and ranchers should be able to make a living from the land alone.

As far as food producers uniting - don't hold your breath. Thanks to human greed, there will always be those who will try to beat the system for their own benefit.

A while back I started a thread about numbers and off farm income and decided at that point, based on the responses, that things will never change. Because we never buckle down and improve our lot as food producers by working to increase prices. Rather, we have fallen hook, line and sinker for strategies like "improving efficiency", "bigger is better", taking that job in town or the nearest employment opportunity, etc.

IMHO, the die is cast and what you see is what you get. So either work with it or get out because it ain't gonna change. Too many of the parameters in this business are set by the rich, the stupid and the unscrupulous. I guess I'm one of the stupid ones because I don't seem to know how to quit! :lol2:

 

[Big Muddy rancher]

Off farm income has been helping out for a long time. Guys used to trap muskrats and could pay for a quarter of land with a winters proceeds. Not any more. Speculators have pushed land prices way beyond productivity.

 

[Horseless]

This is one big topic to get a grasp on. In some aspects the more things change, the more they stay the same.

When you live on marginal land and havn't married for money, creating and recognizing opportunities has kept many of still going.

We tend to be pessimistic when trying to look into the future. I am not quite as worried about the survival of our farm and ranch, some how we will make it work. But the direction that our country is going scares the
H--- out of me.

 

[Grassfarmer]

The only part of it which which I cannot fully agree is that of the retail price being sufficient. I think it is too low - why else should the consumer be spending only 9 or 10 percent of their disposable income on food?

Inflation adjusted prices of beef taken from a Canadian NFU report last fall provide proof. In Canada today consumers pay roughly the same as they have done for beef (maybe slightly less) over the last 33 years. Producers are getting paid half as much for their live cattle.
In the US the situation will not be quite so extreme - you have less corporate concentration and less captive supply in packing sector.