Tough times ahead for Ag

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Tough times ahead for Ag

Jan 18, 2020 | 11:19 1 But this time the parasites may suffer more than the farmers! Layoffs beginning to happen and many farms have put a hold on new fixed asset purchases. The last 15 years have dramatically improved most farms financial status if they were managed properly. The majority are now positioned quite well to weather the cyclical downturn we are now experiencing. Farms will continue to cut costs and cease all unnecessary spending and as a result many parasites will starve. Too many middle men riding around in expensive pickups making $80,000 plus a year with unrealistic expense accounts advising farmers on one thing or another. Unfortunately these middlemen have not had to live within their means yet and know no other way to exist besides the status quo. As a result are ill equipped to survive the downturn. Let’s hope it’s only a downturn and not a collapse! Reply With Quote
Jan 18, 2020 | 11:24 2 and they are driving around in $80k trucks , incurring no expenses Reply With Quote
Jan 18, 2020 | 11:56 3 Think it is overly alarmist, agree that most farms are in good financial position.
May be that land prices and costs are still under valued.
Expect farms that have been profitable will continue to buy equipment.
Note that grain and livestock prices have not changed much past year.
Looking at back pages of Western Producer. Reply With Quote
GDR
Jan 18, 2020 | 12:37 4
Quote Originally Posted by Hopalong View Post
Think it is overly alarmist, agree that most farms are in good financial position.
May be that land prices and costs are still under valued.
Expect farms that have been profitable will continue to buy equipment.
Note that grain and livestock prices have not changed much past year.
Looking at back pages of Western Producer.
I'm not sure either, if it werent for the crappy harvest or lack of harvest, things would be pretty good here. Prices aren't terrible, fert is down for 2020, spring is coming time to chin up and get excited about seeding. Reply With Quote
Jan 18, 2020 | 12:49 5 What part of agriculture are we talking about. ....

Farmers. ...they don't count in the whole scheme of things....

Everyone else is getting government money while they are taking their pound of flesh from farmers.... Reply With Quote

  • Jan 18, 2020 | 13:25 6
    Quote Originally Posted by bucket View Post
    What part of agriculture are we talking about. ....

    Farmers. ...they don't count in the whole scheme of things....

    Everyone else is getting government money while they are taking their pound of flesh from farmers....
    Bucket....don’t check out the announcement for taxpayer $ going to Corteva, Bunge and friends. Reply With Quote
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  • Jan 18, 2020 | 13:33 7 The issues are much larger than just the poor harvest weather. We produce commodities and their values is directly related to the overall global economic situation. It’s not good and I believe we are long past due for an economic reset. Every generation has one. Look closer at some of the indicators that Errol posts or macdon talks about. Global economy is on life support and is very fragile. Thanks to the last 10-15 years most farms have very good equity, even at lower land values, strong working capital and manageable debt levels. Therefore are positioned to survive an extended period of slumping ag. Lots of the middlemen whom have came into the picture in the last 10 years have never experienced what a slumping ag economy looks like or will do to their business. They are extremely vulnerable. I am not taking about the large parasites that have been around for generations just the newer ones that have pulled up a chair in the last decade to skim the cream. Prime example is any precision ag company. Reply With Quote
    Jan 18, 2020 | 14:07 8 Good example to help illustrate
    August of this year I was working on a 1995 $15,000 cultivator converting it from an 8 inch spacing to 12 inch to use as an nh3 cultivator. One of our only hot days this august haha. Ag consulting firm, who will remain nameless, roles into the yard in a 3/4 ton dodge Laramie diesel. Two young ag more than ever “consultants” jump out, shades on with shorts and sandals. Apparently out and about cold calling on farmers who might be interested in their services. Me with cutting torch in hand chopping away trying to remove trip assemblies covered in dirt and sweat. They introduced themselves and we begin to discuss the rare hot day we were having. Nice kids who seemed very knowledgeable but were baffled by why I was going to all that grunt work to changeover this old cultivator. I said well just trying to reduce cost and make use of existing piece of equipment. They said too bad I couldn’t just pass on the cost of a new nh3 cultivator to the end user of our farm products. So me being a bit of an instigator and a little cranky from working in the heat said oh just like your company does with that expensive truck. They said well we need that truck to do our work and get around out in rural areas. I said you need a $70,000 3/4 ton diesel truck with air conditioned leather seats to drive around on grid roads? They said well probably not but if the company’s paying for it why not! We then began discussing their services and associated costs. I said I was not interested and thanked them for stopping by. I also told them to tell their companies owner to buy cheaper transportation and to pass those savings onto their clients. Like I said good kids but unfortunately they will most likely not have a job in the near future. Reply With Quote
    Jan 18, 2020 | 15:14 9 Cuban, you obviously have never had Farmers Edge come around your area. They come with 4 of those trucks and 4 guys in each truck. Reply With Quote
    Jan 18, 2020 | 15:50 10 I've said it before, everyone ******* about land prices but that's not the problem. It's the equipment, parts and input prices along with the market's that are in collusion with each other. The price of land has gone up for sure, but it's an asset that's going to be there forever. Who's 9600 or 2188 is still worth what they paid? Part's are absolutely out of control, and inputs should be in line with commodity prices. But, farmers have no choice but to pay the price. You just said it, 70,000 dollar Laramie, that will be in a car crusher in 5 years, and guys think land is overpriced? Reply With Quote

  • Jan 18, 2020 | 16:27 11 All true, add in the Trudeau dollar devaluation and it is a huge hit.
    Last edited by Taiga; Jan 18, 2020 at 20:17.
    Reply With Quote
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  • Jan 18, 2020 | 16:31 12 Talked to a lot of farmers at the crop show and some of the numbers I heard for rent, and most of all land sales blew my mind. In one area there were basically five guys laying their cheque book on the table, guy who can write the most zeros gets the land.
    Question I have is “everyone” talks and complains what is happening to our industry, but would you sell given the opportunity?
    Some have kids coming up others have the next generation already on the farm.
    Do these kids really have an opportunity to make a good living?
    I personally think the roller coaster has run out of power and it’s still heading down a real long hill, something is going to have to give it a jolt to get to the next peak. Reply With Quote
    Jan 18, 2020 | 17:15 13 Agree Cuban , I said the same for a while .
    Too many hands in the cookie jar .
    There is simply not enough return to supply everyone in Ag a big high paying job and benefits anymore, actually there never was. The Ag industry as a whole and extremely poor Ag politics and vision have left the cupboards bare.
    Areas that have struggled the past few years with poor harvests are one thing, add in drastic drop in grades and yields in others due to early frosts and lack of rains and you get even a more dismal picture of reality that some are facing .
    One thing to struggle to get a 60-70 bus crop off , but an entirely different situation when yields are 1/2 that and grade discounts take all profits away but still keep just above crop insurance levels .
    A lot of “extras” have been cut from this area a while ago.
    Basically the risk factor has gone up way too high for a lot of areas to indulge in all the extras.
    The past three summers we have had only 4-5 in rain in the growing season followed by early frosts . Don’t make sense to spend an extra dollar than need be to get an average crop cause that’s all you will get with limited untimely rains. Reply With Quote
    ajl
    Jan 18, 2020 | 18:10 14
    Quote Originally Posted by sk_wheatking View Post
    I've said it before, everyone ******* about land prices but that's not the problem. It's the equipment, parts and input prices along with the market's that are in collusion with each other. The price of land has gone up for sure, but it's an asset that's going to be there forever. Who's 9600 or 2188 is still worth what they paid? Part's are absolutely out of control, and inputs should be in line with commodity prices. But, farmers have no choice but to pay the price. You just said it, 70,000 dollar Laramie, that will be in a car crusher in 5 years, and guys think land is overpriced?
    Send any and all $70000 Laramies destined for the crusher to my yard. My truck is an 06 Ram diesel with 212000 on the clock. It will be running around for a least another decade and yes land prices are also silly right now and only a function of the governments dedication to manufacturing inflation. Once they can't do that, that price gets reset as well. Reply With Quote
    Partners's Avatar Jan 18, 2020 | 20:40 15 For some farmers times are tuff regardless of times.
    In the 80's when wht was 8 bucks.
    We had many neighbors screw the system and declared bankruptcy.
    Inputs were tiny compared to now.
    High priced land makes us all worth more at retirement. Or if you need collateral for a loan.
    Who wants to be worthless?
    Some farmers would he broke even if wht was 10 or more bucks..
    Spend within your means.. Reply With Quote

  • Jan 18, 2020 | 21:45 16 """":We had many neighbors screw the system and declared bankruptcy..."""""

    Yup and there is a second generation gearing up to do it all again....because the people in the lenders office are rookies.... Reply With Quote
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  • Jan 18, 2020 | 21:48 17 I had to check twice to see if this is agriville,there hasnt been anything except whine,moan,piss,over how bad ag is !!! Now alls well and everyone is admiting to being very well off.....WOW
    And still a liberal gov,,go figure
    Sarcasm intended Reply With Quote
    Jan 18, 2020 | 22:05 18 Farmers just don’t change. We are doing this all for pennies on the dollar. Don’t plant a crop and see what happens. Trouble is too many took the bait and have no choice but to go row with slaves. Pissing and moaning won’t change a thing til u hit them and I mean all them where it matters most. Keep buying and planting and u feed the beast. Reply With Quote
    Jan 18, 2020 | 22:15 19 Merle asks the question -







    :0 Reply With Quote

  • Jan 19, 2020 | 20:07 20
    Quote Originally Posted by bucket View Post
    """":We had many neighbors screw the system and declared bankruptcy..."""""

    Yup and there is a second generation gearing up to do it all again....because the people in the lenders office are rookies....
    Ritchie Bros will be there to help when the party is over for the second time. Reply With Quote
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  • Jan 20, 2020 | 07:25 21 Partners said it perfectly , and thank you for saying the obvious, SPEND WITHIN YOUR MEANS ! Around our operation we have a line of machinery that could be termed " a working museum" but it is well maintained and paid for. We have replaced stuff on a budget , fixed and rebuilt the entire operation on a limited budget ( thanks to my wife who works off farm ) and we are saving for our son's university education. In the 20 years that I have been on our place full time , I have seen a lot of neighbors spend a LOT of money on machinery and land , when they were very well off with what they had. Yes I am envious, sorry for that , but that is what it is. As far as weathering the storm , we have been there and done it . I know a lot of people in this area that better start doing their math better or they are going to be in for a rude awakening. Reply With Quote
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  • SASKFARMER's Avatar Jan 20, 2020 | 07:38 22 Galaxie you're not alone. Some on here are farming a bit and have Zero Operating debt or opp lines, they pay cash. Some have Zero equipment debt or very little, Some have zero land debt or maybe a quarter. Some have million-dollar savings accounts. Some have a property in other countries and own other businesses. Some have shares in companies that would blow people away at the amount.

    But the real problem that anyone with money realises before others is that when an investment gets bad its time to get out or change things.

    Farming has once been a good thing and yes it goes in cycles but lately, the focus on all others and nothing on the farmer's problems is starting to hit home. Last week in saskatoon it was all about keeping the industry happy with loans grants etc. No one mentioned without the farmer all would fail.

    But we did this to our selves with useless fools running farmer boards and doing nothing but becoming yes men for industry and gov.

    Will it change I doubt it as pigs need to be fed and gov will give money to them any day and hope farmers just get bigger and bigger.

    Other countries are moving ahead in Ag and we topped and are dropping. Reply With Quote
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  • Jan 20, 2020 | 09:15 23 Kevin Hursh predictions for next 10 yrs;

    1. Glyphosate and other critical herbicides will be banned or severely restricted
    2. Climate fanatics have gotten into every level of society and will be impossible to reverse that trend. Which means ag is a target.
    3. Interest rates to rise, land values cooling
    4. Some token extra processing for protein from canola and pulses might get a leg up here. I will believe that when I see it.

    Very few positives.

    Fearless predictions for the decade ahead Reply With Quote
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  • Jan 20, 2020 | 09:22 24
    Quote Originally Posted by jazz View Post
    Kevin Hursh predictions for next 10 yrs;

    1. Glyphosate and other critical herbicides will be banned or severely restricted
    2. Climate fanatics have gotten into every level of society and will be impossible to reverse that trend. Which means ag is a target.
    3. Interest rates to rise, land values cooling
    4. Some token extra processing for protein from canola and pulses might get a leg up here. I will believe that when I see it.

    Very few positives.

    Fearless predictions for the decade ahead
    If governments and others don't start understanding the value of farmers pretty quick....everything above won't matter anyway...The FSU is eating our lunch and cake as well...

    Besides Hursh is making money writing that .... Reply With Quote
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  • ajl
    Jan 20, 2020 | 09:23 25 The next ten will be bleak on the farm but I don't think glyphosate will be that restricted. The poorer harvest that is working its way through the system right now will raise food costs somewhat and combined with lower disposable incomes for consumer will get the focus on real problems and away from fake ones. There will be a small uplift on pulse processing but the cattle industry will continue to shrink. Reply With Quote
    Jan 20, 2020 | 09:25 26
    Quote Originally Posted by ajl View Post
    The next ten will be bleak on the farm but I don't think glyphosate will be that restricted. The poorer harvest that is working its way through the system right now will raise food costs somewhat and combined with lower disposable incomes for consumer will get the focus on real problems and away from fake ones. There will be a small uplift on pulse processing but the cattle industry will continue to shrink.
    It will be an excuse to raise food prices....there is no reason for it....other than the Westons know they can get away it.... Reply With Quote
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  • Jan 20, 2020 | 09:42 27
    Quote Originally Posted by ajl View Post
    The next ten will be bleak on the farm.
    Read that article again with a different lens

    no support no safety net no improved programs no expanded trade no enhanced infrastructure no incentives for younger people no commitment to value added anything

    More of the same.

    Moe is doing the same jawing. Wants all this extra GDP from ag but won't commit any money to it. Surely sask could afford to put up one protein or biodiesel plant to start the ball rolling? Reply With Quote
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  • Jan 20, 2020 | 09:45 28
    Quote Originally Posted by jazz View Post
    Read that article again with a different lens

    no support no safety net no improved programs no expanded trade no enhanced infrastructure no incentives for younger people no commitment to value added anything

    More of the same.

    Moe is doing the same jawing. Wants all this extra GDP from ag but won't commit any money to it. Surely sask could afford to put up one protein or biodiesel plant to start the ball rolling?
    Moe and company wants to spend $7500 an acre to get water to the quarter line with another irrigation project ....but thats not going to create shit other than a place for the Albertans that sell out to buy land in Saskatchewan...its sort of like the housing market...

    A billion dollars for 300 farmers...think about it... Reply With Quote
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  • Jan 20, 2020 | 22:30 29 Well boys after reading all your post we may all be ****ed too!! This **** show might make the 80’s look like a minor speed bump! With no oil patch to keep farms a float thanks to the current federal administration we will all be up **** creek without a paddle. Not like a good oil patch job would go far towards saving a farm nowadays anyway. Reply With Quote
    fjlip's Avatar Jan 21, 2020 | 01:08 30 Lots of realistic views, suggestions. No matter how the economics changed, there were always enough of us to make it work, and wait it out, perhaps spinning our wheels standing still, but surviving to expand another day. Equipment ran longer, inputs fine tuned for max return. There are so many variables influencing income and expenses that we will never know the next 10 years accurately. Stuff changes daily. I am hoping the next GEN makes a go of it all so our values stay up, and us soon exiting are well rewarded. Reply With Quote
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