Thank you.
Hello. I'm Wyatt Hanson. I'm going to tell you guys a little bit about myself. I have lived on a ranch my entire life. We have operated an award-winning purebred ranch, and sold our genetics over four continents. In 2001 we decided to sell our purebred operation. We got right back into the commercial business in the hope of a larger profit margin with less labour. Within a year, BSE hit, and we were right back to the drawing board to change our philosophy.
At that time we started managing a herd for a businessman out of Texas. We were going 24/7 just to make ends meet. In 2008 we sold 500 of our commercial herd. When this decision arose, my parents asked my brother, sister, and me the question, do you want to continue on with cattle? At this time we were having labour issues. My parents were working 18-hour days and we were working 30-hour weeks with school. This led us to the conclusion that we love the cattle and we love the lifestyle, but we cannot find a paycheque at the end of the day. So my parents decided to try custom grazing, and this is where we are today.
I am interested in going to university to study international business at the end of next year. I have been in 4-H for seven years and have had all of the beef projects. I have been involved with junior cattle shows, and currently I am on the Alberta Junior Hereford Club board and in the Airdrie and District Agricultural Society. I enjoy the farm, but I do not enjoy the stress and the physical abuse we take to enjoy it. I believe we should run farms purely as businesses.
I am unaware of any other business that relies on government handouts, besides fishing, to make a living. If you were to buy a trucking company or a retail store, your investment should show a return in six to twelve months, and should pay for itself in three to five years. If you were to go out and buy a ranch to run 300 to 500 cows, you would need 3,000 to 5,000 acres, and that would cost you $3 million to $8 million, depending on the location and the quality of your land. You would also need about $1 million for equipment and $500,000 for cattle inventory. The expenses for the year would run you between $300,000 and $500,000, and you would need $100,000 for the owner's family wage.
I would like you to refer to the handout for the stuff I just talked about. It's on the last page. If there are any questions, I'll answer them at the end.
Today we are selling our calves for $660, which is 79% less than what is needed to run a business. Some say that this is greedy, but if we want to compete for input products like fuel, machinery, fertilizers, and pharmaceuticals, we need to work under the same rule of business as any other company.
So how are we holding on? Number one, a high percentage of the land was paid for before 1970. Number two, we have older farming communities. Number three, farmers don't pay themselves or the family help. Number four, younger farmers borrow against the paid lands, and they use this money to pay for operation expenses. Number five, 80% of the family farm's income comes from off-farm jobs. Number six, the fact that our machinery is getting older means that one day higher debts will occur upon replacement or repair. Number seven, the quality of our inputs is decreasing, so that means the quality of our outputs will suffer.
Our ranch sold our commercial cattle to a businessman with a junior oil company and an airplane hangar construction business. He bought a good ranch, put machinery and the cattle on it, and was bankrupt within 18 months. We would find that to be the same result for most businesses that tried to play in the world of agriculture, because the agriculture business can suck money out 80% faster than it can be put in when starting from zero.
From the previous assessment, it makes me ask myself some questions about my future. Number one, why would I enter into a business where there's little to no room for me to advance my business? Number two, if I were going to enter into the business of agriculture, to be fair to my parents I should have to buy them out so that they can retire, and so my brother and sister can live out their dreams with their share.
Even if I were gifted my share, I could not afford to get enough capital together to sustain a farm big enough for me to make a living. If I have to get a job to afford the farm, I might as well just get a job.
Make no mistake, I love our farm and I love our history. I enjoy breeding the best cattle we can and I enjoy feeding, calving, weaning, and marketing. But I do not enjoy the frustration of having a superior product that is worth less than it costs to raise it.
I am also frustrated that the priority of our society is on material wants more than the value of our food. I understand that shopping makes our economy strong and assists us in our global trading position. This appears to be heading, perhaps, to a critical situation. Agriculture contributed about $80 billion of Canada's gross domestic product in 2002. Without the family farm, rural Canada will become a ghost town.
I do not believe that the problem with agriculture is a national problem; I believe this is a global problem. We are not alone. Farms all over the world are going broke. My greatest concern is that family farms are in danger of becoming extinct. Within 20 years, the Cargills and Tysons of the world will own the agriculture industry. This massive correction will explode the price of the agriculture products to even a point beyond where it should be today, because these companies are only operating at a profit.
Until agriculture can control either our expenses or our pricing, or both, I can't see a future in agriculture for me.
Are there any questions on the green sheets?