Ontario farmers plan record corn acreage: StatsCan field crop areas report

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The price of corn this year should make mr. Thompson happy as it is a true reflection of a ethanol subsidized corn market adjusted to world demand? How about that 4 dollar corn boys.

Take away all the government policies that wreak havoc on agricultural land prices and then ask yourself would my bottom line be any different if I hadn't paid $15,000 per acre and expected $7 corn as compared to $6000 at $4 corn?

The price of corn you could forward contract for recently is still pretty darn good for anybody that hasn't gone on a spending spree. There are a few fellows with new buildings full of new machinery and a bunch of new overpriced land betting on that "new plateau" that should be nervous.

It is my understanding that only if ethanol was not mandated for use in fuels would we see the true reflection of the ethanol effect on corn price because then ethanol would have to compete for corn on a more level playing field where economics play a role. Raube Beuerman, Dublin, ON

Its wild how some Cash Croppers will complain about corn going to make fuel yet they will take the money to the bank with a big smile. Donate the excess money to start a young farmer and I don,t mean a family member.

Or just leave the money in the bank and don't go outbid the young farmer for that extra 50 acres or do some custom work for 3/4 of the average price just cause you were going by and undercut the young guy that could have really used the extra work.

John Gillespie

Money in the bank is a bad deal right now .

What really has to happen is that all of the young farmers have to stop the gripping and whinning about not getting a break and having to compete . Business is business and if some one can do it for cheaper then let them .

If you are going to buy then buy , pay the price and move on . Every one keeps saying that land is too expensive but yet here we have some one who must think otherwise . It is like going to an auction sale and not bidding on any thing because some one you know might want the same item . There are no friends at sales . People you know yes but they are all potential competition . And if you don't go or don't bid because you think some one else might be interested you will never gain a thing in this world or will be every one elses door mat .

Your kind of reasoning, and your kind of advice, was what prompted farmers, particularly young farmers, to make bad investment decisions in the late 1970s. Competition is OK, but when you're competing with cash croppers who were in business when ethanol gave them all wind-fall profits, and when you're competing with the second (or even third) generation of supply managed farmers who got quota for free, it's unfair competition, and always will be. Young farmers, particularly livestock farmers, have every reason to gripe and whine until ethanol mandates and 200% tariff barriers disappear.

Stephen Thompson, Clinton ON

Actually I did go to 2 farm auctions recently and both farms didn't sell. One farm with an old but working small pig barn and on older basic house, and 80 workable acres brought 425 000 and didn't sell, a 110 acre farm with 90 workable brought 530 000 and didn't sell. Both farms had a reserve that was not announced but must have been high. There was a decent crowd at both sales with the money to buy and didn't. I guess that means I wasn't the only one that thought the prices were too high. What gets frustrating as a young farmer is when we see a large (and the last bidders on both these farms were large farmers) averaging the cost of 1 new farm over 5 or 10 they already own to make the payments when it is clear that there is no net gain to there operation by buying that extra farm (it takes more money to make the payment on the new farm than it generates in income). They do it just cause they can. When land is bid up to a price where it can't generate enough income to pay for itself it is a bubble and it will burst.

John Gillespie Ripley

Sounds like you should be paying a couple land owners a visit .

They also do it because I have heard all too often "I hate paying taxes". So they buy something that doesn't make money(or sense), like cattle, land, quota, to simply delay the time to if/when they have to pay tax. So they choose to pay interest instead of tax. It's a double edged sword because while many are profitting solely because of government policies, when it comes to taxes, the same ones think the government is evil. Bottom line, if you are not paying taxes, you are not making money.

I could care less if corn was used for fuel, but if it is never able to be a stand alone business without mandates, then what's the point. Raube Beuerman, Dublin, ON

Supply management wouldn't exist without 200% tariff barriers, ethanol wouldn't exist without mandates, green energy wouldn't exist without subisidies - yet these "false gods" are what farmers are chasing in the hopes that they will, in the long term, be good for them, and for the economy. I suggest that without these false gods, the price of land would go back to about 10 - 15 times earnings, and that's after backing rental rates off by about 30-40% to reflect the influence the false gods have had on them too. OK, people, that means that, even with 4% interest rates, the productive value of land is still less than $5,000 per acre, and anything anyone pays more than that, is because of the influence of the three false gods. The effect the false gods are having on this farm is that my son, a newly-minted Waterloo engineer, has my blessing, and my encouragement, to make as much money as he can in a sector as far-removed from agriculture as he can get, and wait for all these farm boys who think that the price of land, like quota, can only go up, to painfully experience the law of financial gravity, a principle obviously taught only in the Ag Economics department at the OAC.

Stephen Thompson, Clinton ON

The free market is more than capable of taking care of all these isssues when it is allowed to work. The best corn fuel ever made is better known as Gibson's Finest, Wiser's, Crown Royal, Jim Beam........ Raube Beuerman, Dublin, ON

Why not let the young lad start farming now while his interest is still there. If you believe the price of land should be $5000, then sell it to him and set up a life insurance policy to award his siblings the same gift as your giving him. You should make sure the young man doesn't,t turn around and sell it for its current value however,as this could garner a few chuckles.

Thanks to having had his own subscription to the Economist since he was 16, by the time he'd finished high school, my son had long-since figured out that Canadian agriculture was in a price-earnings bubble driven by non-economic factors, as well as in a time-warp because farmers typically can't see, and seem to be proud of not being able to see, the eonomic "forest" for the "trees". He, quite-correctly, advised me that if I'd tried to interest him in farming, given the conditions 5 years ago, conditions which are even worse today, he could have me convicted of child abuse. The trouble is that we need people like him in farming, but as long as primary agriculture in Ontario is dominated by those who believe the path to economic prosperity leads through the forest of protectionist legislation, the "best and the brightest" are going to go elsewhere, thereby leaving farming to those who, sadly, are not, and never will be. I'm tainted by having spent far-too much time dealing with farm debt review in the 1980s, trying to help those who got blind-sided by things they should have seen coming, but didn't, to have any sympathy for those seemingly-determined to ignore sound investment, sound business, and sound economic principles, today.

Stephen Thompson, Clinton ON

Because there were so many farmers making bad decisions on smaller farms, common sense dictates that smarter farmers manage more. Hence economies of scale. The banks are much happier dealing with single desk operators of larger farms. It is this survival of the fittest which you probably disagree with.

Firstly, banks are dumb. Secondly, big farms make big mistakes, and when they do, they usually blame everybody but themsleves. Ask anyone who, like me, knew how farm debt review actually worked.

Stephen Thompson, Clinton ON

Could you please explain what the ideal conditions would be for yourself,and your yes man from Dublin to be content in this industry. We all understand that the two of you would like to see the abolishment of SM, mandates for ethanol, and tariff barriers. However the two of you both cashed those same ethanol windfall cheques. That would appear to be hypocritical.

Blaming us for what we have to do to survive, doesn't lessen the truth of what we promote. We believe in what we write, and from an economic and public policy perspective we're entirely correct and then some, and therefore, we're not afraid to identify ourselves. We're prepared to live in a world without tariffs propping up supply management, and we're prepared to live in a world without ethanol mandates propping up grains farmers - why are so many of the rest of you so afraid to do the same, as well as so afraid to identify yourselves?

Stephen Thompson, Clinton ON

The real hypocrisy will come today when we hear the supply managed farmers whining about the changes government made to the TFW program yesterday, all the while being the ones who can most afford to pay thanks to government protection. Chicken catching crews? Large dairies? Raube Beuerman, Dublin, On

I was once young and naive, like most young farmer's in their 20's. After taking off farm work to make ends meet, I soon challenged and obtained a skilled trade license. Soon after, I realized that Canadians with talent don't need to rely on government employment-tarriffs. No free pizza and chiken wings in exchange for political influence for me. Raube Beuerman, Dublin, On

many of readers of this board would love to have a farm tour of the Thompson farming operation. Would we learn soooo much ? Are you full time with no off farm income? Which sector of farming are you making such a good living at that you can give advice and bash the others?
also what type of farming gives you so much time to comment on every SM/organic/NFU ?government issue out there.
Please share with us ..so we all can learn from the "wise one"!!

G Kimble

Tell us about yours. I know many a farmer that think they deserve to make a great living off a few hundred acres. I look at a return of hours worked, so one these days could run an operation of that size for only 1-3hrs per day total when averaged out over a working year. No sympathy here. Many hate Thompson, because like O'leary, he speaks the truth nobody wants to hear. Raube Beuerman, Dublin, ON

Exactly, the hate comes from hearing what they don't want to hear. They probably teach that lesson in some psychology course, but you can learn it for free by just watching self interest groups attack anyone who disagrees with their own narrow view.

I'm almost 63, and (quite-willingly) gave half of everything away 5 years ago in a divorce settlement. I live by myself, I work about 100 hours a week, year round, doing everything I can to not have to wait until I'm 77 (when my last mortgage taken out to pay off my ex-wife, is paid off) to retire. My views are no different than anyone who, like me, has a bachelor's degree in Ag Economics, and a Master's Degree in Business Administration (from the Ivey School), and/or who reads the Economist or the Globe and Mail, or who has any common sense whatsoever. I also, for the past 30 years, have operated my own income tax and farm management business, and now have over 500 clients, many of them younger, non-supply managed farmers, who never stop telling me I'm completely right, and then some, especially about supply management. Agriculture has been my life, it's been good to me, but it's often been a cruel mistress, yet I passionately believe it is my responsibility to leave it a better place for the next generation, and, unfortunately, I'm only one of only a very few people I've ever met who think this way - everybody else, especially those on the receiving end of legislative largesse, are selfish (and often lazy) S.O.B.s who, if they are proud to be farmers, shouldn't be, because they give those of us who truly care about the industry, apoplexy, and a bad name. I grew up on a beef farm, but now have a grains farm, and up until this winter, I could see beef cows out the window of my office - after 160 years, the beef cows are gone (no surprise to anyone who understands the evil of ethanol) and aren't likely to ever return. I also used to sell small square bales of hay and straw to horse people at the local race track, but got out of it several years ago when I realized I'd had enough of making Christmas Day deliveries to, and relying on, an industry which was dependent more on legislation than on economics (good thing too, because this past fall, my biggest equine customer went bankrupt). The thing to learn, grasshopper, is that farmers, in general, don't know, and seem to be proud of not knowing, a rat's arse from a hole in the ground when it comes to economics, consumer behaviour, or much of anything else that happens beyond the farm gate, and, alas, many of the anonymous postings on this site prove my hypothesis, time-and-time-again. If I was to be allowed to do only one thing to improve agriculture, it would be to demolish the Ontario Agricultural College (except for the Ag Economics department) because too many people graduate from there, but obviously learn nothing of substance while they are there, and spend the rest of their lives proving it.

Stephen Thompson, Clinton ON

I do take every Thursday night off, to go to the so-called "Divorced Farmers Wing Night" at the Blyth Hotel, with one of my oldest, and equally-divorced friends who, go figure, makes his money selling things to supply managed farmers, but who is also completely prepared for life without supply management. I'm not sure if the Blyth Hotel still serves Brazilian chicken wings, but the last time we asked, they did, and I keep telling myself they still do, and that, therefore, they taste better than chicken wings tainted with money gouged from Canadian consumers. On my way there, I often stop at my local supermarket to buy eggs supplied by a local non-supply managed egg farmer - when his eggs aren't on the shelf, I'll buy them from an Amish farmer if/when I'm in that area. When I can't buy non-supply managed eggs, I usually do without, thereby immensely enjoying doing whatever little I can to undermine supply management.

Stephen Thompson, Clinton ON

i had to chuckle when you mentioned supporting the Amish ....they are a tight community that doesn't give anything back outside of their own.!! They are always breaking the rules and regs that the rest have to abide by. Do they ever get Mr Thompson to do their Income Tax....do they ever eat at the local restaurants or purchase from local businesses ......aren't they the ones who wholeheartedly particpated in Pigeon King/Puppy Mills/Raw Milk schemes and selling more than their allowed 300 broiler chickens.
g kimble

I have a significant number of Amish clients, and a good part of my retainer is to help them comply with any number of regulations. If the rest of the farm community was as diligent about being responsible members of society as my Amish clients, we'd be a lot better for it. BTW, my Amish clients are so-called American Amish, and are a completely-different people than the so-called Waterloo County Amish.

Stephen Thompson, Clinton ON

When you needed more money you went out and got a job or got another job . Now adays every one is of the mindset that they deserve a living . They think first about a raise and not about getting another job to make more money . Many farmers and their wives worked off the farm to make ends meet or to make extra to buy some luxury items .

40 years ago, one could support a farm with a job driving a feed truck and/or with a spouse working as a waitress - that doesn't apply any more. In order to be able to compete with supply management, my younger clients have adapted by typically getting skilled trades which can often make them well-over $125,000 per year. As far as I can tell, pretty-much all of the full-time farmers I know under the age of 40 were born with quota under their pillow.

Stephen Thompson, Clinton ON

Try as I might, I don't understand what you mean by an "ethanol subsidized corn market adjusted to world demand". World demand for corn is world demand - nothing gets adjusted to it, but everything, including price, gets adjusted because of it. To look at it another way, while there is a market-driven demand for corn, there is no demand for ethanol at all, save and except that demand which has been artificially-created, and which, therefore, creates an artificial price for corn which all users of corn, including those who feed their own corn to livestock, must pay. If we do see $4 corn this year, it's entirely because of the market-driven response to the shortages of corn created by the artificial demand created by ethanol mandates - in other words, if we get $4 corn this year, corn farmers can blame only themselves, but, of course, since farmers never blame themselves for any of the problems they, and the legislation which panders to them, cause, won't.

Stephen Thompson, Clinton ON

As a first generation farmer who started in the spring of '76 , I too had this unfair competition. Established farmers bidding on new tractors at the dealership just because they had a cash accounting advantage at tax time.
I needing a tractor had to buy used as I too needed a tractor. My tractor had to pay for itself. Best economic decision as the early '80's high interest took effect.
Those who bought new did buy with SOME tax owing dollars but not ALL the dollars needed.They paid with the farm when the equity ran out and not the ability to pay took affect.
Remember .. the cure for high prices is high prices. Works for low prices as well.
Ken Furlong

Almost every farmer who started farming in the last half of the 1970s didn't make it through the 1980s - old-timers said the same thing about farmers who started farming in the late 1920s. The common denominator was stratospheric price/earnings multiples for land, plus the belief, by farmers, that "this time it's different" - it never is.

Stephen Thompson, Clinton ON

Any noticed the amount of dirt being moved to build the appoach to the bridge in Windsor? That's a pile of dirt!!

If it wasn't for consumers going to the US to buy dairy and poultry products, how badly would this new bridge even be needed?

Stephen Thompson, Clinton ON

It is for all of the corn we are going to export for higher prices than livestock producers are willing to pay to be made into ethanol !!
Also it is so all the cheap chemicals can come over for us here to use also .

Gonna be a lot of arrogant corn growers having some heart to heart talk with there bankers in the near future

I had somebody e-mail me privately to suggest the new bridge was for all the supply managed farmers to go to the US to buy machinery cheaper there than here, claiming that his brother-in-law, a supply managed farmer, did just that. Yessiree, Bob, the convoluted "logic" of forcing Canadian consumers to buy what you produce, so that you can avoid buying what they produce - and then they swear on a stack of bibles, well at least the CFFO does, that what they are doing is good for us all. What a country!!!!

Stephen Thompson, Clinton ON

Just seeking some friendly cash crop advice. I am a younger hobby farmer, now with 80 acres to my name. My land is all tile drained and high quality. I don't yet have my own equipment for cash cropping, so I am renting the land out at $100 per acre. I know I should be getting more $$ per acre in my area of Winchester. My question is whether I should be cash cropping myself, paying the input costs to local custom workers or if I should keep renting it out. How would I figure out my input costs per acre and potential profit per acre. Any advice would be appreciated. Would like to maximize my profits on this new adventure. I don't mind some risk, which is why I now have my new farm. Thank you, David

Some might argue this, however RMP #'s, give an average, approximation, to the best of my knowledge, to your old NISA based input costs, plus a PARTIAL allowance for your custom farming costs, plus a reasonable amount for personal labour. Now for 2013 corn that RMP (COP plus small return on labour)support level is 5.62. which times an average yield of say 185 bu./ ac. would be approx. $1039/ac. support if the feds would only kick in their 60%. Unfortunately, the feds have seen fit to reduce ag safety net spending to almost zip so they won't fund their 60% even if we pay a hefty premium. Having said that, even the 40% provincial portion of a $5.62 support price and the chances of $4 harvest price is, in my opinion, a good insurance hedge.

As an aside, does anyone know what the latest RMP #'s are for pork and beef. They seem to be hard to find and I thought this program was to be transparent?

a 50/50 sharecrop would serve both purposes - you put up half the inputs, and get half the crop, while the tenant does all the work. You'd get to file a farm income tax return, and also get to see what rotations work best, and/or what hybrids work best on your farm. You'd also get your own crop insurance portfolio, and be eligible for RMP and AgriStability, and last, but not least, you'd be building a track-record to take to your bank if/when you decide to farm this land yourself.

Stephen Thompson, Clinton ON

I never thought of this option, sounds like a great idea, thank you Stephen!!

What would you boys plan to plant in the northern Ontario district this coming year? The oat price is low, canola bombed out this past season, and I don't know about corn?
Any thoughts?

Thank you Stephen Thompson from Clinton Ontario, I read most of your posts and I sure got a good idea why I don't support Cash cropping.

I don't know anything about corn so I have a question how is corn prepared before it is sold?

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