Producers question economics

CARON, Sask. – Years after he took the advice of agronomists and moved out of summerfallow because it is bad for the soil, wheat farmer Roger Macara is pondering the grim option of returning fallow to his rotation.

The reason, simply, is that the price of grain does not justify the input costs required for continuous farming.

“I hate to go back to summerfallow. It’s bad practice,” the 59-year-old veteran farmer lamented. “But with the price of grain, I just can’t afford to farm the way I’ve been farming. It doesn’t make sense.”

On his kitchen table, Macara spreads 40 years of receipts to make his point.

In 1964, the year he started to grow wheat on his farm southwest of Moose Jaw, he received an initial price of $1.96 per bushel for No. 1 spring wheat.

To purchase a $6,400 tractor, he had to sell 3,300 bu. One bu. would buy 12 gallons of diesel fuel at 16 cents per gallon.

In late March 2004, Macara was holding wheat of the equivalent grade that had an initial price of $2.36. By early April, it had climbed to more than $3. In those 40 years, the price of diesel had risen to $2.27 per gallon, a tractor fit for the times has risen to more than $300,000 and a combine to more than $400,000.

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“I’ve farmed for 40 years and I’d say this is the toughest time,” he said. “It no longer makes economic sense.”

It is little consolation, but Macara is a far from alone.

Agriculture Canada has projected that 2003 will turn out to be the worst farm income year in recorded Canadian history. There is a national negative realized farm income for the first time, massive losses in Saskatchewan and Alberta and a sharp decline in most provinces.

Explanations range from drought aftermath on the Prairies and a downturn in hog prices to BSE-closed borders and a high dollar that has depressed commodity prices.

“There is almost desperation out there,” Ontario Federation of Agriculture president Ron Bonnett warned the government in February. “It’s not just one sector that is hurting. It is almost universal.”

Prime minister Paul Martin has spoken about record low incomes. “These are hard times,” he said when announcing a farm aid program in March.

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Martin needn’t remind Prince Edward Island potato farmer James Shaw about the hard times and how quickly $1 billion can disappear into the black hole of farm losses. The 38-year industry veteran was lamenting to a visitor about low prices and lack of sales when the telephone rang.

After a short conversation, Shaw hung up and wryly noted he had agreed to a sale to Puerto Rico.

“The bad news is that it’s four cents a pound. You need seven or eight just to pay your bills.”

Mark Wilson of New Liskeard, Ont., also is living those hard times. He and Carol Wilson, winners of this year’s Ontario cattle industry environmental stewardship award, were building their 60-cow herd toward 100.

“We were doing well,” he said. “But culls were a big part of our revenue and BSE changed that.”

Their cattle business took a 40 percent revenue hit – more than $20,000. Instead of building toward full-time farming, the young couple now is reconsidering its options. Investment or even maintenance at the farm is on hold.

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“It’s depressing and frustrating to try to do everything right and then to find out how little power we really do have in the marketplace and how vulnerable we are,” Wilson said.