Ontario Agriculture

The network for agriculture in Ontario, Canada

Financing and leveraging

Question:
You need capital to start making money. You need money to get the capital. How do you get one without the other?

In the past few years we have been investigating different options on how we can generate more cash flow (and hopefully profit) on our little farm in northern Huron Cty. Currently it is cropped, with the use of borrowed family member's equipment. I personally have a preference to do livestock due to the current building set-up on farm.
One avenue we have looked at is the dairy sector (we like cows for various reasons). When talking with bankers - "so how much quota do your parents have?" Oh, so we need "sponsorship" program in order to start. :-)
Lately, with the drop in the value of quota, we have talked about it again. One former banker suggested borrowing no more than $20,000 per kg quota. Yeah - that works great when quota is $25,000. So we start with 6 cows. Whatever.
This is where young folk have an issue with beginning farming. We have ideas that could improve efficiencies, labour management, productivity gains, reducing environmental "footprints"... etc. But to get the "elder" generation to agree is about as easy as moving Mt Everest.
One example I recall from Prof. Kohl was a 60 year old man walked up at a family succession planning meeting. He was interested in talking more about succession planning. Kohl was thinking "Oh he wants to retire and get his son more involved." No. His father and his son were walking up behind him. He wanted to get the farm from his 80+ yr old father, who was using a cane. So when would his 40 yr old son be able to farm? After he is eligible for retirement?
A few years ago every banker was willing to lend hundreds of thousands for a pig barn fully stocked. We always said no since I felt there was no future in pigs in Ontario for me. They also were willing to lend the same amount for a modern dairy - if my father would "give" his quota over.
In a super-big-box store in London one day a conversation with another customer came around to "taking over the family farm". She thought ALL farmers literally gave the farm to their children. because that is what happened in her family, her in-laws, and her neighbours - in the old country.
Well with that kind of capital, why do we need to worry about the question at the start?

Views: 98

Replies to This Discussion

Permalink Reply by Andrew Campbell on September 29, 2009 at 3:08am
This raises a lot of great points Wayne - thanks for posting it. I know in our case - we're very fortunate to have parents who WANT us there, and know part of us being there is being owners. It also brings up this video with Elaine Froese on AgVision TV - Barriers to Succession Planning - http://agvisiontv.farms.com/default.aspx?vid=vid_342009135751534

Let's get a good discussion going here. Do you agree with those barriers? Any way to work around those.

I know the thing we really have to watch for is around that conflict. We need to make sure we put those conflicts on the table - rather than trying to avoid them. None of us like conflict, but it is something we are going to have to get better at dealing with.

RSS

Agriculture Headlines from Farms.com Canada East News - click on title for full story

Nine years after near-fatal accident, court rules Napanee farm had duty to warn of hidden bridge hazard

The cab had filled with water. The door was pinned shut. Only an air pocket inside the submerged machine allowed him to breathe. If the water had gotten in, there had to be a way out. Denyes felt around in the darkness, slicing his fingers on broken glass, until he found an escape route through the wreckage. He made his way out and swam to shore. Nearly nine years later, the accident that nearly claimed his life has ended in an Ontario Court of Appeal ruling. In a decision released on May 27, the court found the farm on which the incident took place, Sutton Farms (Nacona) Ltd. in Napanee, liable for more than $423,000 in damages. This ruling overturned an earlier trial decision that had dismissed a lawsuit brought by Deynes’s employer, the agricultural spraying company TCO Agromart Ltd., and its insurer. The court concluded the farm failed to disclose a hidden structural danger beneath a private bridge crossing the Napanee River. “This appeal engages the issue of when and in what

Labor expenses push farmers to automate

Before almond orchards are planted across the Central Valley or apple trees take root in the Pacific Northwest, many of the plants begin their lives at Sierra Gold Nurseries in Yuba City. The Sutter County tree nursery is a one-stop shop, propagating the plants from orchard cuttings and in a tissue culture laboratory, then potting, suckering and budding the trees, and nurturing them for more than a year before shipping them to growers across the country. The labor-intensive operation, which produces millions of trees each year, requires more than 300 employees during its peak season, with labor making up about 60% of the nursery’s input costs. Josh Puckett, vice president of operations at Sierra Gold, said rising labor costs combined with a depressed farm economy in recent years threatened the nursery’s profitability. To adapt, the company invested in new technologies to reduce manual labor and make its operation more efficient. “We’ve implemented a lot more automation,” Puckett sa

Two J’can farm workers die in Canada crash

Two Jamaican farm workers travelling together, Rupert Bell and David Lindsay, died in a traffic crash in Canada about 5:00 pm Thursday. “The death of these two workers is a painful reminder of the sacrifices many Jamaicans make to provide for their families. Today, two families have lost loved ones, communities have lost valued members, and our country has lost two hard-working citizens,” said Minister of Labour and Social Security Pearnel Charles Jr, who expressed profound sadness at the loss. “Mr Bell and Mr Lindsay dedicated many years of service through the Seasonal Agricultural Workers Programme, helping to support their families and contributing to the agricultural sectors of both Jamaica and Canada. The ministry mourns the loss of Mr Bell and Mr Lindsay and extends heartfelt condolence to their families, friends and fellow workers during this difficult time.” Bell had participated in the Seasonal Agricultural Workers Programme since 2013, while Lindsay had been a participant

Amid Rising Global Economic Pressures, New Report Spotlights the Greenbelt’s Key Role in Provincial Prosperity

At a time of rising economic insecurities and global uncertainties, Greenbelt Foundation’s new economic impact report, authored by Ernst & Young LLP (EY Canada), highlights the regional and provincial economic contribution of sectors supported by the Greenbelt. It reveals that the Greenbelt generates $17 billion in Ontario’s Gross Domestic Product (GDP) and sustains over 247,000 full-time jobs. The report highlights prevailing economic trends, provides a breakdown of key sectors’ economic contributions, and elevates strategic opportunities enabled by the Greenbelt’s unique strengths and economies.   Key Findings: Greenbelt-dependent economic activity now generates $17B of Ontario’s overall GDP while sustaining 247,000 full-time jobs across primary and secondary sectors. Since the Greenbelt Foundation’s earlier economic impact assessment (2020), the Ontario Greenbelt has seen a 12% increase in province-wide economic contributions, adjusted for inflation, and a 17% increase in employme

Dubai Chambers discusses ways to develop bilateral cooperation in food industries with Ontario’s Minister of Agriculture, Food and Agribusiness

Dubai Chambers has discussed ways to strengthen cooperation in the food and agricultural industries between Dubai and Ontario, Canada, during a meeting in Toronto with the Hon. Trevor Jones, Ontario’s Minister of Agriculture, Food and Agribusiness. As Canada’s largest provincial economy, Ontario represents an important partner for expanding cooperation, supporting business growth, and strengthening mutual investment. The meeting was attended by H.E. Eng. Sultan bin Saeed Al Mansoori, Chairman of Dubai Chambers, and H.E. Mohammad Ali Rashed Lootah, President and CEO of Dubai Chambers. The discussions focused on ways to strengthen cooperation across areas of shared interest, particularly food trade, agritech, and food technology. H.E. Eng. Sultan bin Saeed Al Mansoori commented: “Dubai and Canada are building a strong economic partnership shaped by shared interests and a common vision for future growth. As the global economy continues to evolve at pace, it is increasingly important to

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service