Harvest

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combine harvesting wheat

One of the accepted truisms about agriculture in Western Canada is farms will continue to get bigger.
Prairie farmers began expanding almost as soon as they took up residence under the homesteading law of 1872, a trend that continues. The 2011 census of agriculture saw average farm sizes grow between 13 and 15 per cent in the three Prairie provinces during five years.
Averages don’t tell the whole story. There are viable farms that crop tens of thousands of acres, just as there are equally viable operations that still function quite nicely on several hundred. Studies show that while small farms often achieve a higher return per acre, they don’t generate enough to support the family, which is why more than half of family farms rely on off-farm income.
But both past and recent history suggest there is such a thing as too big. There were about 90 so-called Bonanza farms of between 3,000 and 100,000 acres on the northern Great Plains in the late 1800s.
Most failed within a generation. Hired management was able to leverage their scale for marketing and input purchases, but when things didn’t go according to plan — as is the norm in farming — they were unable to weather the downturns. One of their biggest weaknesses was finding labour — up to 1,000 men per farm plus the women to cook for them.
A few years ago, One Earth Farms, a subsidiary of Toronto-based Sprott Management Resource Corp., announced plans to crop up to a million acres in Western Canada. At one point, it reached 200,000. It’s now down to 5,000 acres and has quit crop production altogether to focus on producing organic beef.
Earlier this month, Broadacre Agriculture Inc., a modern-day mega-farm operating 65,000 acres of owned and leased land in Saskatchewan, entered creditor protection just four years into its business plan to become the “pre-eminent farm operator in Canada.”
According to the affidavit from its chief financial officer, its crops didn’t yield as well as expected, it fell behind on its payments and its investors and creditors lost faith. It also didn’t help that it had recently borrowed from private lenders at 20 per cent interest.
“The unfortunate reality is the company has never been profitable,” the affidavit states.
Here in Canada, where the cost of land, a lack of labour, outside capital and agronomic management have all emerged as constraints to sheer scale — the owner-operator model is the only one that has demonstrated it can thrive through multiple generations.
U.S. agricultural economist John Ikerd once characterized the big-little farm debate as having less to do with the actual acres on the farm, than the philosophy of the farmer farming it.
As Ikerd described it, a farmer who has five acres and dreams about owning 10 is a big farmer. A farmer with 1,000 acres who’d like to draw the same production and revenue from 600 is small.
It’s an important context as global attention increasingly turns to how best to increase production but not acreage.
Commodity markets are drowning right now under record world production of corn, wheat and soybeans, but global yield gains have been stagnating in recent times — a disturbing trend a team of U.S. researchers set out to quantify in 2013.
“During the 1980s and 1990s, nearly all of the increased food production was met on existing land by increasing yields,” said Ken Cassman, a University of Nebraska agronomist who worked on the study.
He noted an abrupt increase of 24 million acres of farmed land per year starting in 2000.
“This is the fastest rate of crop area expansion in human history. Some have called this an agricultural time bomb, because it is not sustainable,” Cassman said, noting an urgent need to increase yields through better management and implement policies that hold agriculture on existing area.
The answer to the big-little question remains elusive. But it seems farmers of all sizes are facing increasing pressure to grow bigger — without becoming bigger.

Full article here.

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corn on the cob

Even before the current U.S. Farm Bill was adopted, we shared our concern that a $4-plus plateau in corn prices, which was being widely predicted, was in all likelihood no plateau at all.

A year ago many were predicting corn would average $4.50 a bushel, partly because of ethanol demand and partly because production costs had increased so much in recent years. We were doubtful.

Even so, we were shocked, but not surprised, to see a newspaper headline announcing corn prices that were well below the $2 level. It was news of an elevator in the Minot, N.D. area that priced corn at $1.73 per bushel. Yes, you are reading that number correctly — $1.73 as the result of a $1.50 negative basis on a $3.23 futures price.

And that $3.23 itself is 20 per cent below the supposed $4-plus plateau.

We agree that it took a combination of circumstances to bring about a -$1.50 basis — an anticipated bumper crop, railroad problems, full elevators, and the lack of local demand — but circumstances will not pay the bills no matter how they came about.

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tractor and wagon on road

Farmers in Essex County are making the most of the current stretch of unusually warm weather.

Many had been unable to harvest due to the cool and wet weather, according to Leo Guilbeault, a director with the Grain Farmers of Ontario.

Guilbeault says the forecast for the next few days is a welcome relief.

“We haven’t had too much nice weather up until now to get harvest going, with all the rain and cold weather we’ve been getting,” he said. “It hasn’t been conducive to harvesting soybeans. We need a stretch of five or six days in a row to dry off the fields a little bit and dry off the crop.”

Overall, the fall field work is behind schedule, according to the Grain Farmers of Ontario.

Read full article.

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