Canadian lenders get taken in large ND farm bankruptcy

Commodity Marketing

Tools

Canadian lenders get taken in large ND farm bankruptcy

ajl
Dec 29, 2017 | 09:50 1 Some of you may be aware of the large bankruptcy of McM farms in North Dakota as it has been mentioned on here before. Two of the top creditors are Canadian. BMO bank and Agrium. McM was not that big only 50000 acres but did have potatoes in the crop mix. He was able to borrow over $50M US, all operating money, while only owning 160 acres. That is an impressive feat right there. Well that at least partially explains why there is higher inputs prices for '18 in the face of lower output prices here in Canuckistan. Canola it taking a beating lately. Farmers in the south can now pray it stays dry so they can chemfallow instead of having to rotate all that pulse land to canola. Reply With Quote
Dec 29, 2017 | 09:55 2
Quote Originally Posted by ajl View Post
Some of you may be aware of the large bankruptcy of McM farms in North Dakota as it has been mentioned on here before. Two of the top creditors are Canadian. BMO bank and Agrium. McM was not that big only 50000 acres but did have potatoes in the crop mix. He was able to borrow over $50M US, all operating money, while only owning 160 acres. That is an impressive feat right there. Well that at least partially explains why there is higher inputs prices for '18 in the face of lower output prices here in Canuckistan. Canola it taking a beating lately. Farmers in the south can now pray it stays dry so they can chemfallow instead of having to rotate all that pulse land to canola.
50 million US. Thats pretty good. If they squirreled away 5 million over the years they will be alright if they’re careful with spending. Reply With Quote
SASKFARMER3's Avatar Dec 29, 2017 | 11:26 3 Like our BTO hopefully every trip he went to Mexico he took his 9999.00. Reply With Quote
farmaholic's Avatar Dec 29, 2017 | 11:32 4
Quote Originally Posted by SASKFARMER3 View Post
Like our BTO hopefully every trip he went to Mexico he took his 9999.00.
He's not feathering another nest in a foreign country is he? Reply With Quote
farmaholic's Avatar Dec 29, 2017 | 15:39 5 There will be no foreclosures or bankruptcies in Utopian Canadian farming. Land prices can never be too high, inputs are never too expensive, and commodity prices are never low enough!

Everyone wants to farm in Canada, best place in the world to farm. Guaranteed success. Don't land prices and rent reflect that? Reply With Quote
Dec 29, 2017 | 15:58 6 Continuing drought may get more attention as the days go by...Could put a crimp in things Reply With Quote
Dec 29, 2017 | 15:58 7 For all the tests and regulations it baffles me how these things still happen. Lol. Makes it harder for us simpletons with equity and a conscience to borrow. Been times when a guys been broke as hell but you intend to cover it and do whatever to make good. The Pikes of the world make you lose hope in humanity. Worst is these snakes end up on a magazine cover and tell everyone how to do things. Some years ago I was in a magazine article about one thing or another and I’m no pro operator by any means but shared what worked for our farm. Back of my mind “now don’t go fucking broke” Reply With Quote
farmaholic's Avatar Dec 29, 2017 | 16:58 8 "Average" isn't worth acknowledging or celebrating. Where's the glory in being like everyone else...go big or go home, or just stay at home.

Bigger is better! Economies of scale! Die a Billionaire! Have the biggest headstone in the cemetery! Reply With Quote
Dec 29, 2017 | 17:21 9 How can the idiots lend money out of the country with no equity? Reply With Quote
Dec 29, 2017 | 18:17 10
Quote Originally Posted by sumdumguy View Post
How can the idiots lend money out of the country with no equity?
They are just diversifying their portfolio. Reply With Quote
Dec 29, 2017 | 18:28 11
Quote Originally Posted by wiseguy View Post
Good for him for borrowing 50 mill !

Bet big if you got nothing to loose !

Never worry about losing the banks money ! Thats the banks problem !

Ag is a bs industry !
I agree, if he only lost the banks money, what's the big deal. I'm sure he was smart enough to bury a few million that wont be found. Reply With Quote
Dec 29, 2017 | 18:43 12
Quote Originally Posted by hobbyfrmr View Post
They are just diversifying their portfolio.
Unless you were a major shareholder in these corps lending the money whatever. But I’d be choked if FCC or any other crown invests outside of the country and loses their ass. Sask crowns had a few brainers like that.

Kudos to the fellow who could borrow that much on that little equity. Was this guy financing like a venture capitalist? When you get up to a certain size of concern it’s gotta be like a mining venture. Massive outlay before you see returns, longer timeframes. Reply With Quote
Dec 30, 2017 | 08:46 13 It’s an interesting read, it looks like the classic swicheroo.

BMO bank is claiming they are owed 42Mil. But the land that was owned magically now is in McM’s dads name. McM junior the mastermind declared personal bankruptcy as well, while dad holds the land. Reply With Quote
Dec 30, 2017 | 08:54 14
Quote Originally Posted by WiltonRanch View Post
Unless you were a major shareholder in these corps lending the money whatever. But I’d be choked if FCC or any other crown invests outside of the country and loses their ass. Sask crowns had a few brainers like that.

Kudos to the fellow who could borrow that much on that little equity. Was this guy financing like a venture capitalist? When you get up to a certain size of concern it’s gotta be like a mining venture. Massive outlay before you see returns, longer timeframes.
Streaming cash to junior mining exploration companies is fairly commom these days.
Streaming cash to canola farmers has a more immediate return on investment, plus the investors capture the farmland which is a pretty sweet security in a short timeline Reply With Quote