Category: Finance

Federal government expands area eligible for drought-related tax deferral

In mid September, the federal government announced the list of prescribed regions eligible for drought-related livestock tax deferral. The break was welcomed, however ranchers and producer groups criticized the government’s approach, saying it left out too many drought-affected producers. Announced October 31st, the federal government says it is taking steps to answer some of that… Read more »

It’s time for a harvest farm finance check-in

Financial planning and management of your farm business is a year-round activity, but just after harvest is an ideal time to take stock, review where you’re at, and begin planning for next year. I think many times in any small business we are energetic on the planning, but fall flat on the follow up at… Read more »

How high will interest rates rise?

Ever since the great recession of 2008, interest rates have been ‘abnormally’ low. Although there has been noise about rising interest rates, the economic argument has been weak. But the economy is getting stronger, and along with that the argument to raise interest rates is also getting stronger. In this interview RealAg Radio host Shaun… Read more »

Powerball allows farmers to dream of what if…

There is not a farm in North America that would refuse a major influx of cash if it was awarded to them. There’s cash to get you by, and then there is generational, life-altering cash. This week, the United States Powerball jackpot reached $1.5 billion, and the winning ticket was printed in South Carolina. It… Read more »

4 considerations for choosing the right combine capacity for your farm

Farmers are all about efficiency and productivity as they keep their eyes on profitability. It’s a real accomplishment to make sure you have the right size of equipment for the task at hand. With the cost of machinery and rising interest rates in 2018, this calculation has become even more critical for managing capital purchases… Read more »

Post USMCA, Bank of Canada expected to bump interest rates

It seems like a foregone conclusion, but the Bank of Canada is expected to raise interest rates Wednesday. The market is expecting a 25 basis point hike to 1.75%, which would be the fifth increase since July, 2017. Bank of Canada Governor Stephen Poloz will address the Canadian economy that’s been tempered in the past… Read more »

Mind Your Farm Business — Ep 34: The sweat equity trap

Capital assets don’t buy groceries. If this statement makes you scratch your head a little, you’re likely the older generation on the farm. If you read it and think, “Don’t I know it” you might be the in-coming generation, and very likely frustrated by the lack of clarity on how the farm’s equity and income… Read more »

BMO launches young farmer loan program for the under 35 crowd

Citing a strong industry, but a shrinking demographic, BMO Bank of Montreal has introduced its new loan program for Canadian farmers 35 years or younger. The BMO Young Farmer program offers is aimed at helping both the person who’s already in the industry and for those who are choosing to get into agriculture, with loans of up… Read more »

Read the fine print of equipment purchase contracts: lawyer

Although not a common practice for most farmers, a lawyer is urging more farmers to consider consulting their legal advisor prior to purchasing pricey farm equipment. This advice comes after one Saskatchewan farm lost their legal battle and appeal against an ag dealership. In this specific case, James and Merrylyne Coward claimed the dealership they bought… Read more »

Mind Your Farm Business — Ep 33: When parents won’t talk about farm succession

Believe it or not, the farm transition can actually be a joyful journey. But that can only happen once three things are established: Is the business going to continue? When would you like it to continue? (starting now, or with a reading of the will) Who will lead the business in the next phase? That’s… Read more »

What’s behind recent strength in the Canadian dollar?

On Friday, the Canadian dollar rose nearly a cent relative to the U.S. dollar. The sudden ‘strength’ came from a couple of sources. First, more confidence that the Bank of Canada will continue the path gradual rate hikes; second, a weaker U.S. Dollar. Recent Canadian economic data warrants the Bank’s outlook for gradual rate increases…. Read more »

Bank of Canada increases target rate again, but questions remain on the economy and dollar

The Bank of Canada increased the target interest rate today by 0.25%, to 1.5%. This is now the fourth rate hike, amounting to 1%, since the Bank hiked rates for the first time since 2007 a year ago. Over the last year, the Bank of Canada has matched the aggressiveness of the U.S. Federal Reserve,… Read more »

Area One Farms offers two new farmland investment funds

Area One Farms, an investment firm that builds equity partnerships with Canadian farmers, has announced the launch of Area One Farms Fund IV and Fund V. The two funds will offer investors the “opportunity to invest in equity partnerships with Canadian farmers and farmland.” According to a press release, Fund IV will offer Canadian institutional… Read more »

You’re right to be terrified of the word “fair”

“Fair” must be one of the most commonly used words in the English language. It most certainly is one of the most dangerous. It gets used and thrown around with reckless abandon every day. Don’t believe me? Here’s are some examples: Farm succession: “Let’s make sure we split up the farm so it’s fair for… Read more »

American dairy farmers face large financial hurdles and doubts about their future

When you cross the Canada/U.S. border headed south, the landscape is the same, the time zone is the same, but the economics of dairy are very different. Canadians in agriculture are familiar with our domestic supply management system that aims to match supply of dairy products to demand. This control of supply through a quota… Read more »