Area One Farms

[Crestliner]

No... I resurrected this thread I started last year for context. One of their progressive farmers that they "partner with", is liquidating WELL AHEAD of their intended 10 year horizon.

Couple of average year crops, max inputs, and gargantuan capital outlays are sinking a splashy operation.

What auction sale is that?

I personally don’t think there is enough net income in grain farming to grow the farm with earnings and take care of investor returns as well.

Why are farms so chronically undercapitalized?

Because the farm doesn’t make enough to carry the demands of capital required.

Yes we have a few good years, high prices or high yields....but when it happens, the cost side is quick to respond...higher rents, higher inputs and don’t mention the Royal screwing equipment is giving us....but most of the time farming is SLOOOOOOWWWWW MONEY!

We have had a big bump in asset land values in the last 10 years...some guys have turned that equity into borrowed money and I think I sometimes people think that’s their money....big surprise coming for those.

The best capitalized farms are inter generational farms that have been well managed, grown from retained earnings and the families have gotten along and no big divorces or sibling blow ups...like I said SLOOOOOOOOWWWWW MONEY!

The Broad, Input, schemes and Private investor farms will come, occupy some space in the industry, but the family farm will endure, it’s the best structure and my gawd needs some support and programs from all levels of governments that encourage its survival and thrive.

[rumrocks]

The tortoise and the hare come to mind.

[15444]

What auction sale is that?

I personally don’t think there is enough net income in grain farming to grow the farm with earnings and take care of investor returns as well.

Why are farms so chronically undercapitalized?

Because the farm doesn’t make enough to carry the demands of capital required.

Yes we have a few good years, high prices or high yields....but when it happens, the cost side is quick to respond...higher rents, higher inputs and don’t mention the Royal screwing equipment is giving us....but most of the time farming is SLOOOOOOWWWWW MONEY!

We have had a big bump in asset land values in the last 10 years...some guys have turned that equity into borrowed money and I think I sometimes people think that’s their money....big surprise coming for those.

The best capitalized farms are inter generational farms that have been well managed, grown from retained earnings and the families have gotten along and no big divorces or sibling blow ups...like I said SLOOOOOOOOWWWWW MONEY!

The Broad, Input, schemes and Private investor farms will come, occupy some space in the industry, but the family farm will endure, it’s the best structure and my gawd needs some support and programs from all levels of governments that encourage its survival and thrive.

Need to print that and send to every MP, MPP and scum-sucking checkoff group. But the hot air will blow it right through their heads.

[poorboy]

Helmsdale,

Is that the operation on Highway 570 just south of Blood Indian? Sure looks out of place there.

[blackpowder]

So, I watched their video.
Ya, it hinges on two things.
Buying undervalued land. And leveraging your own under secured land.
Never see these guys in this area at $5000/ac. Although I know of one accountant pushing over leveraged guys to sell some dirt to an investor group and lease it back.
Whatever the model in the future, there's only so many dollars left at the end of the year. And there will always be years everyone is staring at a negative.
Any model might work. But the players will have to accept the negative years.

[iceman]

A link or it didn’t really happen!

Iceman

[malleefarmer]

Remember on here a couple years back “one earth farms” what became of them or still going strong

[the big wheel]

Remember on here a couple years back “one earth farms” what became of them or still going strong

They re now in a different location
I think they renamed to Another Bankrupt Farm?

[blackpowder]

Didn't Gary Pike and Larry Ruud (one earth) go to university together?
I remember when they all started with Alberta Ag. Giving talks on how to survive in Ag. There was a third man but he was killed in an accident.
Then AB govt downsized, they went on their own with the same message. They all told me my days were numbered 25 years ago.

[SASKFARMER]

One earth is toast.

Plus Pike and crew Are gone.

Big splash and fizzled out to nothing.

[the big wheel]

They all left with their pockets full. Even though
They were complete failures at running a farm.

[helmsdale]

Latest development is that I am about to have a new hutterite colony as a neighbor...

Sounds like a split from a colony 1.5hrs NW of here is taking on everyting south of Hwy 9, short of two or three sections.

10,000 seeded acres, plus the main yard with feedlot, significant grain storage, cold storage sheds, shop, etc. all going as one package deal.

Those that were renting bins on the real estate have been told they have till March 1, and it all has to be gone as that's the possession date.

There are really only two types of buyers for these massive operations when they decide to cash it in. Hutterites, and other investment organizations. There is no way that STO's can possibly make a play on any of it, as the seller tends to want to do a "package deal".

BACKGROUND:

The g****vine has been running thick with rumor, but I tend to believe those individuals who are on conversational basis with the owner of said corporate operation.

There was a minimum of 3 outside investors orgaized through Area One Farms, tied up in this operation, and the operation ended up in court with one of those investors, the Ontario Teachers Federation, for breach of contract. Once you've been found in breach of contract with one investor, I would imagine your other investor relations have the option to walk.

From what I've heard, the ownership believed this entire "partnership" was a license to print money. The investors bought the majority of the land and then had YOU custom farm it for them. Custom rates for seeding, sprayin, harvesting, storage, transportation, etc. They honestly felt that there was no way that they could ever lose money on such an arrangement, and I would certainly be inclined to believe them.

Is there anywhere in western canada, where you can afford to get your ENTIRE operation custom farmed, and there still be anything left over for the owner?

I would imagine that the OTF had quite the legal team, and poured through every accounting entry to find evidence of breach of contract, so that they could get out of their 10 year obligation, liquidate the holding, and realizing the capital gain..


With margins decreasing, is this sort of shit finally going to come to an end? The unbridled enthusiasm that investors had towards farmland, especially in some of the more marginal areas of western canada has done the industry a great dis-service IMHO. It has been great for those looking for the exit door, but good god, it makes it entirely impossible for STO upstarts like myself to even begin to think of competing!

[LEP]

Unfortunately the increase of hutterite colonies is unstoppable. I think that is the exit strategy for the local bto that owns in excess of 90,000 acres.

The bto surrounds my operation. It isn't as big a deal for me as I am nearing the end of my career but my son has little hope.

[blackpowder]

Awful for your son. I hear you.
What's better, Hutts or Chinese?
In your situation, Hutts worse I guess.

[the big wheel]

Awful for your son. I hear you.
What's better, Hutts or Chinese?
In your situation, Hutts I guess.

Neither are good and you can thank Mr Wall and his band of flunkies that the inside track on foreign ownership laws being changed bought up land for next to nothing in today’s terms and flipped it after the laws were changed. Destroying many young farmers hopes of ever starting or continuing. Biggest insider trading scam ever but not many in the media understood the big picture of what was happenning a few scums benefitting themselves at the cost of an entire industry.