Starting out, winding down or expanding the farm business or somewhere in between — those are among the good reasons producers for this Farmer Panel are providing custom farming services.
Ultimately custom farming is about providing some extra cash flow or farm income when the equipment lineup may be somewhat oversized for the farm land base. Why not stay home and farm more land? For producers in this panel that’s exactly what two of them would like to do.
The beginning and mid-career farmers say it would be great to have more acres, but expanding has to be a well-considered step. With reports of quarter sections of cropland in different parts of the Prairies selling for anywhere from $450,000, to $650,000, scooping up another 160 acres isn’t something you do on a whim. It takes a fair bit of wheat and canola to repay that capital cost. And availability can be an issue too. Even at those higher selling prices, a convenient quarter or half section doesn’t come along every day.
On the other end of the farming cycle, producers nearing retirement may reduce the number of acres being farmed due to workload or ill health, but that still leaves a fairly good line of equipment in the yard — how does it earn its keep? Offering custom farming services is one way to get value out of equipment when the home farming operation downsizes.
Here is what farmers for this March Farmer Panel say interested them about offering custom farming services:
In south-central Saskatchewan, Codie Stoain hopes custom farming services will help him to afford expanding his farming operation over the coming years.
Stoain, who farms near Mazenod, southwest of Moose Jaw, produces grains, oilseeds and pulse crops on his 1,200 acres. He grew up on a family-owned organic farm and was a bit young to take over when his parents exited that business. So now he is building his own farming operation.
At the moment he’s offering custom spraying services with a JD4930, 120-foot-wide high-clearance sprayer equipped with GPS guidance. And he also has a Super B truck offering grain-hauling services. Stoain plans to have a new trailer available this coming season, so he can haul the sprayer farther distances for custom work.
“It’s hard when you are starting out because the cost of land and machinery is so high,” says Stoain, 27. He heard of some land around Moose Jaw selling for about $640,000 per quarter, likely to investors, which pushes up the value of farmland in his area, if and when it becomes available.
While he’s only offering sprayer and trucking services this season, Stoain hopes over the next year or two to be able to expand his own equipment line to offer full custom farming services from seeding to harvest.
“Eventually I would like to expand my own farm so I could stay home full time,” he says. “But offering custom farming services now will hopefully help me get there one day.”
Stoain says with custom services it is important to find a niche. Many larger farms have their own full line of equipment. He’s looking to provide services to producers who don’t own a high-clearance sprayer, for example, or need an extra piece of equipment in the field during peak work periods.
For more information on Stoain custom farming services contact him at 1-306-354-7999 or by email at [email protected].
Roland Unger isn’t quite ready to retire yet, but when he needed to downsize his farm due to health issues, he figured offering custom farming services would help cover the cost of a good line of machinery.
At 61, Unger, who produces grains, oilseeds and corn on his farm near Arden, northeast of Neepawa in south-central Manitoba, has been providing some custom farming services for the past eight years.
Along with cereal crops and canola he also grows corn and soybeans on his farm. For custom farming services he offers corn and soybean seeding with a row planter, a floater to apply fertilizer, as well as custom spraying services for crop protection products.
“I downsized our own acres, but I had a good line of equipment I wanted to keep and figured custom farming would be a good way to put it to use,” says Unger. With good repeat customers and a willingness to travel up to about 30 miles for field work, Unger says custom farming provides “a good chunk” of annual income.
He says usually the timing of field work is staged reasonably well so he can provide timely services to customers. At home, aside from spring- seeded corn and soybeans he has switched to growing more fall rye and winter wheat which also helps to spread out the workload.
For more information contact R & S Farm Services at 1-204-476-6024 or by email at [email protected].
Brad Hines says they’re not getting rich from custom farming services, but spraying, hauling hay and trucking fills the gap to keep everything running for the five partners or families involved in their mixed farming operation in east-central Alberta.
Hines and his wife built the 350-head cow-calf beef operation, and 2,000-acre grain and oilseed farm (they own 12 quarters and rent another nine) from scratch over the past 28 years. Now with their four sons (age 21 to 30) all interested in farming, they’re using every trick in the book to increase farm income in an area where it is expensive to increase farm size.
“Along with the farm, everyone also has to work off farm to make it all work,” says Hines, 50, who farms near Vermilion, Alta., west of Lloydminster. “But we all want to farm and if that’s what you have to do to make it work, then that’s what you do.”
While everyone is involved in the beef and cropping operation, they also provide custom farming services that include custom spraying with a 90-foot Rogator, custom bale hauling with a 17-bale, self-loading dump, and they also do a bit of custom hay cutting and baling as well. They limit most of their custom services to five longtime customers, particularly with field spraying, just so they aren’t spreading themselves too thin. And they also own a gravel truck and provide custom trucking services.
“Really if we didn’t need to work off farm we wouldn’t,” he says. “Because at certain times of the year everything is go, go, go. It’s busy and at the end of the year everything is still fairly tight, but it works.”
Everything is expensive, but Hines says land cost is really the limiting factor that holds them back from expanding their land base. Quarter sections that do become available in his area are running anywhere from $450,000 to $600,000. They expanded their land base a few years ago — some of the quarters were about $160,000 and later some land was costing between $350,000 and $500,000 per quarter.
“In recent years we spent about $2 million to increase our land base and even if you could find it you can’t just keep buying more land at these higher prices,” he says. He figures, for example, his canola land is costing him about $350 per acre. If he produces a 45-bushel crop worth about $10 per bushel that grosses about $450 per acre. “There isn’t a lot of margin there,” says Hines.
With a field sprayer costing between $200,000 and $250,000, that one machine could handle about 10,000 acres a year (covering about 3,000 acres three times). And with payments of about $60,000 a year it takes about five years to pay it off, aside from maintenance and operating costs. It’s a big investment. And that’s why he limits his client base so he can handle everyone’s spraying needs on a timely basis. “A few years ago we had insect problems in this area and if you had to wait two or three days or more for a large commercial operator to get to your farm the crop would be gone. So we manage our custom spraying so it is done when it needs to be done.
“For this to be a more comfortable operation where more, or all of us, could stay home and farm we would probably need about 8,000 acres, and at current prices growing to that size just isn’t viable,” he says.
Hines isn’t complaining. He appreciates they have the option for custom work which generates about $200,000 a year toward overall income. “It is just the fact with farming economics these days the money sounds big, but to keep everything running it is still pretty tight.” And somewhere in there he says it is important to hopefully find a few dollars so they can get away to Las Vegas once every couple of years. “Farming is always a gamble, so you need to get away to put a few dollars down on something else, to see how that goes.”
For information on custom services including bale hauling and trucking services contact Hines at 1-780-787-0924.