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How in the world can you make money in this market?
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<blockquote data-quote="Alberta farmer" data-source="post: 616166" data-attributes="member: 8978"><p>I have to agree with Custic Burns. Become a low cost producer. Consider every purchase, ask yourself will this make me money? If the answer is no then don't do it.</p><p>In Canada we have a much better tax system in regards to inheritance taxes. We also have a capital gains excemption of $750,000 per farmer. I will be able to give my son all that I own without paying any taxes. You need to plan ahead though and start the transfer before you are dead or senile! I see many farmers who don't know when it is time to start giving up control and ownership and let the younger generation have their turn! My son just turned 30 and basically he makes all the decisions...with a little advice from old Dad! But then I taught him to think like me so we don't have too many disagreements! I had to get him straightened out a bit after he came home from university with a bachelor of Commerce degree. I don't think some of those professors had a real clue about how business works!</p><p>I guess a person could make a lot of money by getting into direct marketing of beef? My only thought on that is do you want to be a rancher or a packer? Might make more sense to just be a packer and forget the cows...buy someone elses cattle for the cheap prices?</p><p>On the cost of land: Cows will never pay for the land. However land usually appreciates over the long term? Don't know if it offsets the interest or not? You should not include land costs in whether that cow is making money. Land is a seperate investment.</p><p>The low cost producer will generally outlast the high cost producer. The best cure for low prices is just that...low prices! When enough guys go broke the supply dwindles and the price goes up. If you can outlast the rest you will reap the rewards. My old grandfathers quote on low prices "You have to own them when they aren't worth anything if you want ring the bell when they are worth a fortune".</p></blockquote><p></p>
[QUOTE="Alberta farmer, post: 616166, member: 8978"] I have to agree with Custic Burns. Become a low cost producer. Consider every purchase, ask yourself will this make me money? If the answer is no then don't do it. In Canada we have a much better tax system in regards to inheritance taxes. We also have a capital gains excemption of $750,000 per farmer. I will be able to give my son all that I own without paying any taxes. You need to plan ahead though and start the transfer before you are dead or senile! I see many farmers who don't know when it is time to start giving up control and ownership and let the younger generation have their turn! My son just turned 30 and basically he makes all the decisions...with a little advice from old Dad! But then I taught him to think like me so we don't have too many disagreements! I had to get him straightened out a bit after he came home from university with a bachelor of Commerce degree. I don't think some of those professors had a real clue about how business works! I guess a person could make a lot of money by getting into direct marketing of beef? My only thought on that is do you want to be a rancher or a packer? Might make more sense to just be a packer and forget the cows...buy someone elses cattle for the cheap prices? On the cost of land: Cows will never pay for the land. However land usually appreciates over the long term? Don't know if it offsets the interest or not? You should not include land costs in whether that cow is making money. Land is a seperate investment. The low cost producer will generally outlast the high cost producer. The best cure for low prices is just that...low prices! When enough guys go broke the supply dwindles and the price goes up. If you can outlast the rest you will reap the rewards. My old grandfathers quote on low prices "You have to own them when they aren't worth anything if you want ring the bell when they are worth a fortune". [/QUOTE]
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How in the world can you make money in this market?
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