Here's hoping for an economic reset soon in ag

[bucket]

I heard it the other day from a farm group rep " ...do you want government involvement?...."

Most farms wouldn't be here without it.....the guys with dad's and grampa's money more than likely saved the government money thru the years. ...

I wish people would understand the pulse producer is getting shit on...even the saskpulse board doesn't understand reality...

[macdon02]

How much money do people think Dads and Grandpa's had?
Sweet tweet compared to the dollars it costs to run any size of farm today..

Depends how big the life insurance was ..... no one talks about that but they'll be the first to say how good of farmer they are. Took me a while to figure it out and I'm not implying anything to you personally by quoting. There's some massive policies out there and all sorts of games going on loading gramps up with new line of land and iron

[Ache4Acres]

The only reset coming is going To be a broad based reset. Every industry is overdone just like Ag and once interest rates rise - pop goes the bubbles.

But when everything drops , nobody is protected, it won’t matter where you squirrel away your money. Down she goes.

That being said, Holding cash the last few years has been a painful experience. Anyone that thinks overall inflation is less than 7% is delusional IMHO. Money has always become nearly worthless within two generations and that is accelerating. $100,000 50y ago was a nice savings, today it’s a nice half ton.

I would agree, be careful what you wish for

[Taiga]

It was posted above that the real money was being made by the Equipment dealers. I don’t think that is true. RME’s latest posted results show 2% profit. That is not great by any business standard. That is grocery store level. Many dealers hover on the verge of bankruptcy. I think the Equipment prices we are seeing are:
1) costs have been subjected to massive inflation inflicted upon us by the Trudeau impact, CAD dollar is shits and buys nothing
2) increased manufacturing costs due to increased technology. $20,000 just to have guidance ready machine and GPS system, etc.

I am semi retired and farm on the side and enjoy it, fantastic lifestyle, but I sure don’t make any real money. But at least I am honest with myself.

[ajl]

RME inflated there cost structure through building a lot of brand new expensive store sites. Now they have to digest that in an ag recession. The shares have not done well lately but that is there own fault.

[Taiga]

RME inflated there cost structure through building a lot of brand new expensive store sites. Now they have to digest that in an ag recession. The shares have not done well lately but that is there own fault.

Agreed, I just used them because they are public and it is the only results you can actually see. All public companies run the accounting scams though. RME’s used inventory is huge but they get away with it by classifying them as assets and investors don’t understand what the asset is.

[grassfarmer]

But at least I am honest with myself.

Not if you are claiming that high machinery prices began with Justin Trudeau's reign. Was it all cheap and easily affordable under the Harper administration?

[cuban_assassin]

The reset would not have to be anything earth shattering. All it would take is a 2% interest rate hike and a 25% reduction in land values and things would straighten out in a hurry. The fact that these two occurrences alone would be enough to make a lot of farms insolvent illustrates how financially unsustainable farming has become.

[Klause]

Agreed, I just used them because they are public and it is the only results you can actually see. All public companies run the accounting scams though. RME’s used inventory is huge but they get away with it by classifying them as assets and investors don’t understand what the asset is.

I wonder how that works considering even used equipment is on floorplan financing at all the dealerships these days?

[blackpowder]

Some dealers valuing trades at lowest RB price for a while.

[GDR]

RME is making a bit more than 2%. Another parts story but I needed a new bat pipe for a nh header, they wanted $2900 plus freight. It's a HC reel, combine world is a dealer, same piece $325.

Dealers have done the exact same things farmers have, overspent on fancy shops and expensive land thinking the good times will last forever.

[Rareearth]

Ajl Sounds like shorting Rme is a sound strategy?

[Taiga]

Not if you are claiming that high machinery prices began with Justin Trudeau's reign. Was it all cheap and easily affordable under the Harper administration?

Haha Liberals are so predictable, just too easy.

[Taiga]

The reset would not have to be anything earth shattering. All it would take is a 2% interest rate hike and a 25% reduction in land values and things would straighten out in a hurry. The fact that these two occurrences alone would be enough to make a lot of farms insolvent illustrates how financially unsustainable farming has become.

If that happens the Hutterites will own everything. You can’t argue that their diversification and cult repression and slavery is not conducive to successful scale agriculture. It is what it is. Though I will never sell to them.

[fjlip]

Lots of thoughtful comments! You can’t argue that their diversification, so diversity IS strength, finally understand it. Only business with more RISK is trying to sell to poor farmers, shit for used iron that was never even used in 2018! Rusting evaporating values.
Agree last gen passed on way less value than some could pass today. All relative, the $ don't go far. Folks basically gave it all away, still comfortable, taxable in dad's 90's, has seen it all.
The next gen will need to be risk takers also, but wow are they savvy worldly connected and informed.
We knew SFA in the 60's and 70's, sat on the machinery in noise dust hot and cold. Was even more primitive for dad with horses. Enough will survive, just hope someone wants yours when you call it quits or pass on. Lots of estate auctions, don't leave her to spend it all herself. Those I know that QUIT at 55 were absolutely the smartest. Ya SKF3 agree, have another life other than moving to the level 3 care home, or the cemetery. Not easy to make those life changing decisions, good luck to all. Nothing is forever, no plan is right for all. Get thee to an accountant, shame to fatten tax coffers for them to WASTE! Kids will have more to enjoy. They will remember past gens, all you can hope for.