AgStream

[SASKFARMER3]

Again a farmer would be a total idiot to enter into this type of arrangement.
One with today's crop prices name one lender that's not their for their clients. If they are in grain production. I am sorry if someone is having trouble obtaining credit this isn't the answer.
Yes some larger farmers rent a hell of a lot of land but again some. Also why for the life of me does a farmer liquidate his farm to one of these investment groups for no more than two to four of his neighbors would pay for the same dirt. Simply the answer is Cant let the neighbor get ahead so we will fix them and take our land off the market. Watch what happens when it freezes or drought and the renters don't pay the investment house.

[Jay-mo]

I saw this article yesterday and was thinking the same thing. What the $#*& is this??? If you are a producer that averages canola yields over 35 b/a why would a idea like this even look remotely attractive?

[lesm]

Does anybody know Gary Pike's history or background?

[Steve_Winkler]

I have a landlord trying to get me to do a similar rental agreement. My lease on the land expired this past crop year and this is very similar to what he's proposing. 50/50 split of everything, all costs, all revenue. The main thrust of this deal was for he and his wife to maintain farmer status ( tax & capital gains issues)and was discussed well before the big jump in prices. In my opinion it wasn't meant to be a money grab but it may turn out that way.

I'm not thrilled about the deal in light of the dramatic rise in commodity prices, but I need the land base as well.

Any thoughts, suggestions as to how I should proceed??


Thanks,

Steve

[IAMTHEMOLE]

grow barley on that piece

[Hopperbin]

Steve not sure, you worked hard up to now. You said discussed not agreed upon. Too bad contract not sealed yet. I would try to hold tuff if no contract yet.
Then again in my area I don't have a neighbour that would take land away from me. I have neighbours that crop share but don't keep grain separate just pay cash as estimate of crop share. Takes a lot of trust to do that. But that does not solve the problem of the renter wanting actual grain checks. Guess this is a whole another topic.
Back to getting 70 percent of 150dollars of inputs paid up front only to give half of 35 bushels per acre average crop back at 13 dollars per bushel equals 227.50 paid back costing basically 77.5 per acre for a 105 dollar cash advance. Lifer you are right negotiation on the part of the farmer would be in order. Perhaps AgStream drew it up based on lower canola prices.

[Hopperbin]

I remember a topic a while back about how an end user could guarantee supply. Doing as AgStream is proposing could be a good way of securing that grain. By spreading acres over a wide area reduces risk.

[SASKFARMER3]

This article just really pssed me o--. Some one is going to give you some money for half your crop, go get a spring interest free Cash advance and you keep the grain for your farm.
Makes me think of another example the Outstanding young Saskatchewan farmer award. The guy this year sold all his property and rents it back. HM that's a genius. He just became a worker for a wage, His kids will never farm and he will quit on the next turn down. But that's another topic.

[agstar77]

Some people scoffed at the idea that farmers could become serfs again. If these type of plans fly , serfdom is only a step away. If Agstream succeeds wouldn't it be logical for someone like Cargill to buy in? We have seen it in the hog industry, just takes a little longer in Grains.

[Jay-mo]

Good point agstar. The hog industry for farmers has largely become one where the Maple Leafs, Hytek, Big Sky, Puratone etc take on most of the risk and contract out the raising of their animals to individual farmers.
I have a custom hog feeder contract with Maple Leaf. Its been a good thing as part of our grain operation. When the hog prices are bad I dont have to worry . When prices go up, well it makes not alot of difference.
For my farm its been a good way to minimize risk. However, the flip-side is that there is no big up-side potential with this kind of arrangement.
I cant imagine not owning half the grain in my bins during this recent rally. At the same time during the past couple years when we have seen 5$ canola who wouldnt feel alot better having a big chunk of their inputs already paid for?