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: 90

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

U of G Researcher Receives Funding to Develop More Sustainable Wheat

A University of Guelph researcher has received government funding to help Canadian farmers grow wheat using fertilizer more efficiently while strengthening soil health and the wheat microbiome.  

Will the Iran War Make Already High Food Prices Worse? | OPINION

Food prices in Canada have been rising at a faster rate than overall inflation for the past several years. In fact, food prices are 30 per cent higher than they were a decade ago.

Prairie Swine Centre celebrates 35 years of driving innovation

Over that time, the centre has evolved into one of Canada's premier swine research facilities, delivering practical, industry-focused research that strengthens the financial position of pork producers while advancing animal welfare and environmental sustainability across the Saskatchewan and Canadian pork industries. A foundation built on industry partnership The PSC story began in 1980 when the University of Saskatchewan (USask) built the facility for its swine research and teaching program. The original operation consisted of two 100-sow and one 50-sow farrow-to-wean units, a 240-head feeder barn, and a small office and service building. However, it was in 1991 that PSC transformed into the organization it is today. In 1987, USask and the Saskatchewan Hog Marketing Commission partnered to review the centre’s operations. An advisory board including industry representatives from across Western Canada identified two critical needs: increased emphasis on grower-finisher research, and

Investing in Canada: Why Gate Matters

Canada’s cereals sector has earned a global reputation for quality, consistency, and reliability. That reputation was built over generations by farmers, researchers, exporters, and value chain partners working together to deliver premium grains to international markets. But, as global competition intensifies, maintaining Canada’s leadership requires more than tradition; it requires strategic investment. That’s where the Global Agriculture Technology Exchange (Gate) comes in. In our latest video, Gate Capital Campaign member David Hansen explains why Gate is essential to Canada’s future in global grain markets. Gate will provide the modern infrastructure and technical support that global customers expect, giving them the data, unbiased advice, and confidence they need to continue choosing Canadian cereals. Gate connects global buyers directly with Canadian expertise, showcasing the science, innovation, and collaboration behind our wheat and other cereals. By strengthening technical e

Making Every Pound Count: Nutrient Management in Corn

Fertility starts with the soil and the variables that make nutrients available to a growing crop. Know Your Soil Texture Clay – very fine, soils with >50% clay Silt – rock & mineral particles that are larger than clay and smaller than sand. Soils with >87% silt Sand – very coarse, soils with >70% sand Loam – a balanced mixture of clay, silt and sand (approximately 20-40-40) Soil texture determines a soil’s water holding capacity. Sand has low capacity to hold water and low water content at permanent wilting point (~10-15% v/v). Clay loam has a higher capacity to hold water, therefore has a higher water content at permanent wilting point (~15-20% v/v). Nutrient Balance Nutrient balance is vital to soil fertility and crop production. Nitrogen is most commonly the first and most limiting nutrient for non-legume crops, but without an adequate fertility blend with other nutrients, nitrogen use efficiency is not “maxed out” and suffers. A poorly fertilized corn crop uses just a little l

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service