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Farmer salaries up 35%! This Maclean's article should entice some young farmers into the industry..

Do you agree with these salary numbers? Could a new farmer earn as much as an established farmer? What do the earnings look like after you account for your land and equipment?

Would you advise someone to become a farmer as a career?

Nice gig that pays $$? Farmer.

by Erica Alini on Wednesday, May 23, 2012

Looking for a good gig that pays over 60K? Consider farming.

No, seriously. After a long period of stagnation, net farm incomes are rising. Net operating income for the average Canadian farm was over $65,000 in 2011, up a whopping 35 per cent from an average of roughly $42,000 between 2006 and 2010. Only in 1995, that figure was below $30,000:

Agriculture and Agri-Food Canada, based on Statistics Canada figures and projections

“The economics of agriculture are coming back,” says Jeff Grubb, a Regina-based lawyer with expertise in agricultural law. “In the 1980s and 90s farm families needed to have some source of off-farm income,” at least in the prairies, recalls Grubb, who is himself the owner of a 700-acre farm. That’s less and less the case today, though, he says–courtesy of steadily climbing commodity prices and ever-larger farms.

 

Growing demand for food from emerging markets has pushed the prices of crops like rice to unprecedented highs in recent years. Of course, the appetites of a rising middle class in places like China are no guaranteethat commodity prices will keep going up in a straight line, but there’s reason to be optimistic nonetheless. A trend toward farm consolidation and bigger farms, for one, is another factor that’s making for better operating margins, as farm operators exploit economies of scale, notes Grubb.

Not convinced yet? Perhaps you need an update on what “working the land” looks like these days. If you pictured yourself living among the wheat fields, with your days ruled by a well-worn routine and nothing but dial-up Internet to connect you to the outside world, think again. With the average farm size at 778 acres, running a farm nowadays is as much about management and financial planning as it is about tractors and fertilizers. And in many cases, living on the farms is no longer required, says Grubb. In the prairies, many farm operators now live in urban centres and commute to work, he adds.

Add to this that the sector is in dire need of fresh blood. According to the latest Census of Agriculture, nearly half of all Canadian farmers are 55 and older, notes Grubb, who says he increasingly finds himself urging clients to think about succession planning. Though the number of Canadians farms has been decreasing since 1941 and dropped 10 per cent over the last five years alone, the number of young people entering the sector has been dropping even faster–with the result that folks under 35 made up less than 8.2 per cent of farm operators last year. With youth unemployment in Canada hovering around 14 per cent–nearly twice the national average–that alone should be enough to get some youngsters interested.

http://www2.macleans.ca/2012/05/23/nice-gig-that-pays-farmer/#.T75J...

 

 

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As a 25 year old in the Agriculture sector, I would love to farm.  However, the up front costs to young farmers are overwhelming and impossible.  Farm incomes are rising, because small farms are being pushed out in favor of larger producers.  It takes money to make money.  So, no I am not enticed to become a career farmer and if someone advised me to become a farmer, I would explain how it would be finacially impossible.  Judging by the average annual income, my great great great grand children would be stuck with the burden of my debt.

I have a real problem in the way the article portrays the financial aspects of farm revenues/expenses. (conspicuously absent are capital purchases and the effects on cash flow.)

The eye-catching opening line states "Looking for a good gig that pays over 60K? Consider farming."

OK. Got my attention along with almost everyone else that glances over the article.  That line implies farmers have a good "gig" going that pays lavishly.

The article then jumps quickly to state "net farm incomes are rising."  

But the very next sentence states the net operating income jumped over 35% over a few short years.

The writer masterfully confuses "net farm income" and "net operating income" in a single paragraph leading people to believe there is no difference between the two.

Cash receipts -(minus) operating expenses = NET OPERATING INCOME + Income in kind - (minus) depreciation = Realized Net Income +/- VIC = TOTAL NET FARM INCOME.

The article, in my private opinion, appears to be very misleading..... either that... McLeans believe there are land fairies much in the same category as tooth fairies. ... and that would indeed get "some youngsters interested".

Well put Joann. I'd be curious to read some other farmers comment on their actual net farm income. I meet a lot of non farming folk who think farmers are well off, with all their recreational toys (4 wheelers, snowmobiles, etc). However, others would have us believe that the average farmers have had a negative income for years. So which is it?

I know we are just scraping by, making just enough to live off of; and by living, it is simple and frugal: no toys, no tropical vacations, eating what we grow, wearing second hand clothes, etc.... It's tough, especially given limited cash flow in the early spring, but I can say this, we are debt free. No debt at all!

How about everyone else? What is your reality?

Joann said:

I have a real problem in the way the article portrays the financial aspects of farm revenues/expenses. (conspicuously absent are capital purchases and the effects on cash flow.)

The eye-catching opening line states "Looking for a good gig that pays over 60K? Consider farming."

OK. Got my attention along with almost everyone else that glances over the article.  That line implies farmers have a good "gig" going that pays lavishly.

The article then jumps quickly to state "net farm incomes are rising."  

But the very next sentence states the net operating income jumped over 35% over a few short years.

The writer masterfully confuses "net farm income" and "net operating income" in a single paragraph leading people to believe there is no difference between the two.

Cash receipts -(minus) operating expenses = NET OPERATING INCOME + Income in kind - (minus) depreciation = Realized Net Income +/- VIC = TOTAL NET FARM INCOME.

The article, in my private opinion, appears to be very misleading..... either that... McLeans believe there are land fairies much in the same category as tooth fairies. ... and that would indeed get "some youngsters interested".

Hi Colin,

There are alot of specific business factors to consider when you ask a broad question like that.

I think most land owners would be pleased with the growth of their land equity the past few years...but it is not liquid until it is sold.

Grain prices have been above cost of production for most farmers that past few years unless they have a high overhead cost structure.

Many farmers are asset rich and often cash poor as they prefer to pay down debt ahead of throwing money around.

I agree with some of the Macleans article that farming has been more attractive the past 5-6 years than the previous era.

Every situation is different and not everyone has had success the past few years...it is still a tough profession with so much out of your control such as prices and weather.

Have a nice day,

RR

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