Farm crisis around the corner?

[Taiga]

You are lucky, they are on a spending spree further west. Getting ready to branch off again.

[makar]

They are trying here for 15 years cant gather enough.

[LEP]

We were pretty frisky up until 1981, paying top dollar for land, operating on lines of credit, until the dirty eighties with 20-25% interest rates calculated daily on operating lines. Then came droughts every second year. Those lessons need not be repeated. As I have mentioned before, Lentils, Canaryseed and Glenlea Feed Wheat saved us. If we would have depended on CWB, we would have starved with initial payments of $1.25 a bushel and wait 18 months for a few more crumbs, maybe. It made us tough, we built our own house, we hauled seed across the border, we custom anhydroused, we built our own seed plant and taught our children that all things are possible. Don’t wait - do it yourself.

Old Cowzilla, I remember FCC had a profit calculator and not one crop was profitable. DE - Pressing! Renters didn’t even want to pay the taxes.

A lot of good farmers left the industry in the 80’s and 90’s.

There was a time that lasted a few years where you lost less money the less land that you farmed.

A day of reckoning will come for some when they least expect it. I hope the bite out of my ass isn’t too big when it comes.

[makar]

They are trying here for 15 years cant gather enough.

Anything auctioned never goes to a hutt here. Lots sold, not to them.

[goalieguy847]

Didnt even ask about long term ( 10 or 20 yr) rates. More interested on a 3 yr fixed as ill assume rates should come down by then. However saw some charts and last time inflation hit north america and interest rates chased higher it took 6 yrs before rates started to come down.
Its all relative though. And at the end of the day id rather spend money on land than 1.1 million on a combine. I can always farm land with an old 7720... but i cant pay off that combine if theres no land!

[newguy]

I started farming in the first one. Not a fun time and our Gov would not compete with the USA and we were told to change or get out.

Direct seeding started and we all trimmed back.

One thing different this time big investors will gobble up a lot.

Those that got crops and farmed with money and not for money never knew what the tough 80s were about.Your area never had grasshoppers eating evergreens and paint on the houses.

[makar]

Those that got crops and farmed with money and not for money never knew what the tough 80s were about..

They made money off interest but so did the urbanites. Know a guy that could of bought a foreclosed new 10 story office building for 250000 but was scared. He had the money and was/is a farmer. Fast-forward 40 years my son has a office on the 4th floor.

[Hamloc]

In the 80s when interest rates went from 20 to 10 I thought it was a bargin.Now it goes from 4.5 to 6 and you think it is hard times.

I remember in 1989 a 1/2 section down the road sold for $90000 a quarter, today you would have to pay 10 times that amount. 10% on 90000 is much different than 6% on 900000. So I am curious Newguy where does a 30 year old farmer with a young family come up with the $225000 down payment? On the other side of the coin look at the risk of renting with land rent in the $125-140 range.

I watched a 60 foot seed hawk drill sell on RB yesterday for $615000. I was talking to my equipment salesman yesterday, a new New Holland P2050 58 foot air drill and a 580 bushel tank sells for $600000. Certainly increases the value of my 45 foot Flexicoil 5000 but makes it very expensive to replace..

[newguy]

I remember in 1989 a 1/2 section down the road sold for $90000 a quarter, today you would have to pay 10 times that amount. 10% on 90000 is much different than 6% on 900000. So I am curious Newguy where does a 30 year old farmer with a young family come up with the $225000 down payment? On the other side of the coin look at the risk of renting with land rent in the $125-140 range.

I watched a 60 foot seed hawk drill sell on RB yesterday for $615000. I was talking to my equipment salesman yesterday, a new New Holland P2050 58 foot air drill and a 580 bushel tank sells for $600000. Certainly increases the value of my 45 foot Flexicoil 5000 but makes it very expensive to replace..

In the 80s no one had cash flow.basially the message of young farmers buying land has not changed in 40 years.80s the problem was CWB set a low initial price so banks looked at that for potential income.Then you only could sell it as it was called for throughout the year.Cash flow was unknown so if you did not have cash then commitments were tough to keep up on.Banks were happy to dump farmers as customers.input money was not available as easy as now either.You used the machinery you had and skimped on inputs.Not ideal but no choice.Most school friends bailed and took jobs in the city as it was too much sacrifice for their families.

[jazz]

In the 80s when interest rates went from 20 to 10 I thought it was a bargin.Now it goes from 4.5 to 6 and you think it is hard times.

Those that got crops and farmed with money and not for money never knew what the tough 80s were about.Your area never had grasshoppers eating evergreens and paint on the houses.

How much debt was in the system in 1980. Do you know any farmers with 150M in debt. I farm beside 2 of them.

Do some critical thinking.

In the mid 80s there was no crop for multiple yrs at our place. The highways were wet with grasshopper juice. We moved cattle around weekly and even to pastures 30 miles away. Hauled water every day. What we didnt have was a large debt. Now compare that to today where the ag system has more debt than some countries.

[foragefarmer]

How much debt was in the system in 1980. Do you know any farmers with 150M in debt. I farm beside 2 of them.

Do some critical thinking.

Who held the gun to their heads?

If farmers want to farm beyond their means who's fault is that.

Everybody knew interest rates would go up one day, how many posters on here were predicting that for years now.

As for good used farm equipment skyrocketing, it's a no brainer, very few farmers can afford new.

We just had record commodity prices didn't anybody take advantage of them?

[jazz]

If farmers want to farm beyond their means who's fault is that.

These overleveraged operations dont just farm in isolation. They have creditors, and suppliers and contracts to fulfill as we saw many of them booking crop they hadnt even grown yet and then crying at the terminal in the fall.

When they start tumbling, their excesses get passed on to the system and we all pay.

Financing speculation instead of production always ends the same way.

[foragefarmer]

These overleveraged operations dont just farm in isolation. They have creditors, and suppliers and contracts to fulfill as we saw many of them booking crop they hadnt even grown yet and then crying at the terminal in the fall.

When they start tumbling, their excesses get passed on to the system and we all pay.

Financing speculation instead of production always ends the same way.

What's changed from any other past crisis, those that over extend get swallowed up. That's what happens in every industry and capitalism.

I do feel very SORRY for those that have suffered crop failures to no fault of their own, this is very unfortunate for family farms as we do need more of them not less.

[newguy]

How much debt was in the system in 1980. Do you know any farmers with 150M in debt. I farm beside 2 of them.

Do some critical thinking.

In the mid 80s there was no crop for multiple yrs at our place. The highways were wet with grasshopper juice. We moved cattle around weekly and even to pastures 30 miles away. Hauled water every day. What we didnt have was a large debt. Now compare that to today where the ag system has more debt than some countries.

Less debt but high interest rates and limited cash flow made it tough to servic debt.Buying equipment and more land was for the select few.Rental land was rare to come by to help subsidize buying land.Young farmers had to expand slowly .Not like the young guns today think they must start with all the bells and whistles.

[Happytrails]

Those that got crops and farmed with money and not for money never knew what the tough 80s were about.Your area never had grasshoppers eating evergreens and paint on the houses.

The lost decade in our country. I can even remember the day the drought broke. April 27, 1991. The only good thing was that input costs were fairly reasonable after inflation and interest rates subsided.