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: 123

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

Farm tractor struts its stuff on F1 track

A Valtra T236 reached 54 mph at the Red Bull Ring in Austria

Diploid Potato Breeding May Improve Yield and Storage

AAFC researchers have found that diploid potatoes offer improved genetics, high yields, and disease resistance, providing a resilient alternative for Canadian potato growers.

Boosting soybean protein: The essential role of zinc and sulfur in sustainable crop production

Soybean is a critical element of the global food supply: Between its use for animal feed and human consumption, it accounts for roughly two-thirds of plant-based protein meal output world-wide. Canada is a global leader in sustainable soybean production, with 70% of its crop, one of the country’s top three by value, exported annually. According to Brazilian scientist Gabriel Montanha, soy production has “exploded” in recent decades to meet demand – but there hasn’t been a corresponding increase in soybean’s protein content. “To ensure soy remains a sustainable crop, we need to increase the protein content of soy seeds,”  says Montanha, who is doing a postdoctoral fellowship at the European Synchrotron Radiation Facility (ESRF) in Grenoble, France. “It's critical we find ways want to generate more protein without increasing the amount of land we’re currently cultivating.” Montanha and colleagues used the Canadian Light Source (CLS) at the University of Saskatchewan (USask), and Brazil

New insights into lung health risk for female farmers

Exposure to a mix of common airborne agricultural contaminants could lead to lung effects in females, a new University of Saskatchewan (USask) study has uncovered. Farmers are exposed daily to a variety of potential contaminants such as endotoxins (substances associated with certain bacteria) in dust, which are well-known to trigger lung inflammation and asthma. However, how endotoxins specifically impact women’s health is not well understood, particularly when there is also exposure to a herbicide called glyphosate, widely used in agricultural work. Now, USask researchers have detected lung effects in female mice models just five days after a combined exposure, simulating the same quantity of endotoxins and herbicide farmers could breathe over a work week. The team was able to take detailed images of the affected lungs thanks to the powerful X-rays of the Canadian Light Source (CLS) at USask. These images showed that fluid had built up in the lungs during this short exposure perio

Wet harvest? Protect Stored Cereals from OTA

Wet harvest conditions across parts of the Prairies have put added focus on how cereal grain is managed in storage. Cool, wet weather has slowed harvest progress in some areas, with reports of tough cereals and grain quality concerns. For growers bringing grain off at higher moisture levels, careful drying, cooling and monitoring will be especially important this fall. Ochratoxin A (OTA) is a mycotoxin that can develop in stored cereal grain when moisture and temperature conditions are favourable for fungal growth. Unlike deoxynivalenol (DON), which develops in the field as a result of Fusarium infection, OTA develops during storage. Grain stored above safe moisture levels, condensation or water entering the bin, contaminated dust or soil, and residues from previously stored grain can all contribute to OTA development. Even a small pocket of damp grain can create problems. That means managing the entire grain mass, not just relying on an average moisture reading. Make Storage Manage

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service