Al Mussell
Overview
The survey
Farm optimism/attitudes
What changes are they planning?
How can service providers help?
The Survey
• Confidence in ag economy
• Investment, with some emphasis on
land
• Planned adjustment to ag market
conditions
Purpose- to understand
• Forthcoming farm
economic attitudes,
ownership/organization changes
perceptions and intents
Who Responded?
455 farmers, subscribers to Western Producer and Country Guide
Mostly crop producers
Mostly from 3 Prairie provinces
Relatively larger, older, and more organized as corporations vs.
census reference
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
Census
0.0%
Survey
0.7
0.6
0.5
0.4Revenue Class
Farm
Census
0.3
Survey
0.2
70%
0.1
60%
0
under 35 years
50%
35 to 54 years
40%
55 years and over
30%
Census
20%
Survey
10%
0%
Sole
Partnership
proprietorship with or without
a written
agreement
Corporation Other operating
arrangements
Business Confidence
and Planned Changes
How would you rate the current state of economic
conditions in the agriculture sector and in your own
operation- today versus 12 months out?
Thinking about your farm's situation right now, how
comfortable are you with making a capital purchase or
expenditure for your farm such as land, equipment or
buildings?
Compared to 12 months ago, are you now more or less
comfortable making a major capital purchase or
expenditure for your farm?
Symmetry in Issues and
Threats; Dichotomy in Confidence
Other
Access to professional service expertise
Succession Planning / Asset Transfer
Access to Capital
Food Safety and Health Regulations
Plant and Animal Health/Disease
Climate Change
Government Budgets
Accessing/Retaining Human Capital
Consumer Pressure
Sustainability of Agricultural Practices
Farm Practice Regulations
Increasing interest rates
Government policy changes
Farm Debt Levels
Trade Agreements
Farmland Prices
Price of Farm Inputs
Weather Extremes
Commodity Prices
-30.0% -20.0% -10.0% 0.0% 10.0%
Sector
Own Farm
Most Important Issues and Threats
20.0%
30.0%
Changes Planned
To adjust to lower
price environment
To succession
issues
Percentage of Responses
Adjustments Planned in
Cropping Practices
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
How are you making adjustments to reduced
crop revenues vs. the last 5-6 years?
Ownership/Succession
34% of respondents plan to make
changes in ownership of farm
62% of those planning changes will be
transferring ownership to member of
immediate family or a partner
30% of those planning to transfer to
family member or partner had a
formal plan in place
Most Trusted Advisors
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Most Trusted
Second Most Trusted
Third Most Trusted
Who do you rely upon as your
most trusted business advisors?
Family Farm Life Cycle
Assets,
Equity,
Risk
Succession
Growth
Acquisition
Succession
Growth
Acquisition
Making Sense of Land Prices
Land prices paid as marginal costs, especially for larger farms
Newer, larger machinery drives demand for land; and vice versa
Ongoing process of restructuring toward fewer, larger farms;
attracting people to work in farming
But, remains a diversity of farm sizes- very few in survey indicated
intent of selling land
Decreasing Costs and Asset Capitalization
$/acre
Revenue
Unit Cost
Acres
What Inferences Can be Drawn?
More confidence in themselves that their sector- on the same issues
56% at least as confident making inevestments as last year, despite
crop price changes
They have retooled; few financial concerns
But, additional investments may complicate succession issues left in the
background
What Inferences Can be Drawn?
Technology, investment treadmill continuing to pressure
farm structure
But understanding land purchase behaviour remains
elusive, complex
Broad shifts to lower crop prices not expected
What Inferences
Can be Drawn?
Technology, investment treadmill continuing to pressure
farm structure
Understanding land purchase behaviour remains elusive
Broad shifts to lower crop prices not expected
Business trust based upon knowledge, personal
relationships, perceived integrity
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Most Trusted Advisors