“Don’t Mention the Price of Seed Corn”  

Last week marks the 36th year of writing this column.  Times have really changed since 1986, I can hardly imagine when I think back through all the years.  Back in the last century many of us used to theorize how old we would be when the clock ticked over to the year 2000. Of course, now that’s almost 23 years in the rear-view mirror.  It’s kind of hard to fathom where time is gone.

There has been a plethora of editors through the years and of course I give credit to my first editor John Gardiner from Wallaceburg Ontario.  John wanted an agricultural columnist for his local paper and your loyal scribe fit the bill, a burgeoning young farmer who happened to be in Agricultural Economics graduate school.  John and I are still great friends having first met at the University of Guelph many moons ago.

Times have changed of course when you sit down to write a column. 36 years ago, it was done in longhand and editors had the job to transfer that into some type of media to eventually end up in a newspaper.  Today, of course with the Internet and voice recognition software it is a totally different experience. However, I value my editors, some have been with me for over 30 years.

Interestingly enough, one of my first editors took me aside and told me whatever you do don’t mention the price of seed corn!  I almost laugh out loud when I think of that now because I just imagine what the price of seed corn was back in those days. It might have been $80 a unit. We all know over the last 12 months that the ugly spectre of inflation has hit us on the farm.   Seed corn prices going into 2023 are reflecting that.  In Ontario the price of seed corn was approaching $300 per unit last year.  It’s now seed corn ordering season and I have been informed that the price of a seed corn unit in Ontario is now in the $300 range or maybe even the $400 range per unit. Of course, that’s on top of everything else, I could go on and on.

However, I will not. If you have read this column over the last 36 years you will know that I often say in farming, “change is our only constant.”  That of course goes for everything, and it also goes for inflation. The Bank of Canada has had seven successive increases in interest rates since March attempting to tame inflation which is currently running at 6.9%.  Regrettably, in this current inflationary environment on the farm, all of us are going to have to find a way to get through.

Of course, there is a wide opinion on what that might be. For instance, this past week I was reading an article published in the Globe and Mail by former Bank of Canada governor Stephen Poloz. (Some of you might know him as my lost twin brother or doppelganer) In the article Mr. Poloz stated that he thought our Canadian economy was much more sensitive to interest rate increases than it was five or ten years ago. He mentioned that the level of debt in Canadian society was a chief reason for this. When I read that I thought ditto for Canadian agriculture in 2022.

I say that because for the last, let’s say 10 years, interest rates have been at ultra-low levels in Canada and Canadians were adding to their debt levels in a very robust fashion. You can remember former Canadian finance ministers being somewhat concerned about the level of debt most Canadians were in. At the same time Canadian agriculture has been pretty prosperous over the last 10 years and many farmers would have accumulated more debt to take advantage of our robust agricultural economy.  In fact, some might argue that we should have floated in debt over the last ten years as much as we could looking toward the future.

Of course, each individual farm is unique in their expectations. In my own case, I cut my teeth on 20% interest rates 40 years ago and that made quite an impression. In fact, I have told readers through the years that it stayed with me and actually hindered me through this time.  Needless to say, in 2022 with farm inflation being stratospheric compared to only a few short years ago the propensity for rising debt levels in a rising interest rate environment should give you pause.  Nobody knows the future but finding that farm debt balance surely will continue to challenge end of 2023.

The great lesson from all of this in some ways is that your loyal scribe bought farms 35 and 40 years ago and saw my equity erode immediately because of high interest rates.  You can just imagine how that went over with our banker friends. However, the lesson is that I still own those farms, which are worth vastly more than they were 35 and 40 years ago. I simply had time and maybe a bit of luck and good fortune to make it to the other side. For those farmers today accumulating debt in a similar fashion in a rising interest rate environment, they might ask themselves where they expect to be in the year 2058, 36 years from today.

The challenge of course is to have the vision of where you want to go and then make plans to get there. It helps to have some good productivity, some good luck and the time to make that journey.  If I could take that kid who started writing this column 36 years ago in 1986 and drop him into 2022, he wouldn’t know where he was.  I’m thinking that would be most of us.  Simply put, the road ahead, is the road ahead and despite inflation, interest hikes, war and pestilence and uneven weather, our farms will endure.  It will just make for an eventful ride.