I have been on the road this week and funny all the new super farms seem to have a few things in Common.
Out side money has to be involved, Because most were nothing less than five years ago.
Yesterday i drove by a new farm that wasn't around 5 years ago that has Basically its own railway siding, New Bins that looks like the silver silo at Regina plus Shop like South country and other fertilizer and equipment sheds. 20 mill would be a good guess.
So how does one get investors and keep the party going.
Every investor expects a profit.
But again i have no jealousy towards any of these farms like some on here might feel. Hell if you want to run Walmart and i am happy with the Dollar store, its whatever rocks your world. Yes their is a place for Walmart but don't some Dollar stores make out almost as good.
I have no desire to farm 200 or 750 quarters of land. Most farmers don't either. But are we the next dinosaur that will be replaced. The smaller farms that are still mom and pop or Brothers or Uncles.
I wrote a week ago about financing a pyramid farm and talk to any one in Banking and they will agree it happens in a rising market. Knowing When to get out and let another take over is the big challenge because with every scheme their is a correction.
But on out side investment i have no clue how to set it up how it would work and how a farm in Saskatchewan can pay for millions of dollars of infrastructure and equipment and still give all investors a return plus the principle owners a return with todays prices.
The USA i always say is two years ahead of us. What happens their eventually happens north of the border. So are these Super farms the next challenge. Last winter in ND and Minnesota a very large farm went down. I remember this farm from travels to Fargo Big Iron. Impressive lots of Equipment buildings etc. Your dream farm. But when all the ashes were settled their wasn't a penny left. Also last winter a super super farm went down further east after that was all settled they were 100 mill short or more. Mind boggling.
But some will say this is Canada where nothing like that can happen.
I say GMC was always considered to big to fail. HA HA HAH like that didn't happen but the USA and Canada did resurrect and they continue today. A Farm won't be resurrected.
So if your using some one else Capital to build your dream farm how is it done.
Some one explain to me, please.
Ag is a changing business and we have to adapt and change or we will be replaced. Is it to late to join the party, I felt land peaked in our area two summer ago with Redland sale and yes nothing has sold lately higher than that. So stable prices since that time. Nothing is really moving in our area. If something comes up its snapped up now by locals usually. New Canadians who are farming or young guys getting started. So yes Its a stable environment in our area. We lost the three big Super farms that had big money or investors. Two went out of Business and the third picked the top to leave and did very well. One out of Three isn't bad.
But going to 20000 or 40000 acres has more costs more risk and some reward if you call it correct. One could risk the entire farm and probably find a lending institution that would borrow say $40,000,000.00 to create a super farm. Using the scheme i described last week. But Why risk ones own assets. The investor farm interests me.
Find investors for 40 mil and put your expertise and land owned as part of the rental area. You still own. I have know idea.
So again if any one has some idea on this share please.
Because maybe what will be left is few small family farms and large land renter land owner Corporate giants.
Any ideas would be greatly appreciated.
Yes i said i don't want to go over our size but maybe this is a way to grow to the next level a few years down the road. Looking for all ideas. My Grandfather had 4 that my dad took to 12 we took to 40 for my son to take 40 to 120 i feel is not possible under the current way of farming.
I understand that moving to a farm manager position is different than owner, or shareholder. Good years the board meetings are easy to do but tough times are hard to keep the parade going. Your giving up control.
Again any help would be greatly appreciated.
Confused on how to continue to the next step or should one just sit back and coast and see what comes next.
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