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The Rural Voice, 1981-06, Page 24Farm tires at LOW PRICES Example gm 18.4 x 34 f300.00 We specialize in farm tires. Dunlop, Road King, Firestone "SHOP THE REST THEN COME AND BUY THE BEST FOR LESS" P.E.M. Tire & Muffler Supply 345-2400 John Krooner Dublin From DESIGN CONCRETE LAP SYSTEMS LTD. A division of C J Pink & Son Ltd 138 Clarke Road, London, Ontano N5W 5E1 High strength reinforced concrete slats in four sizes 4' x 10' 4' x 8' 4' x 6' 4' x 4' Ribbed Finish for secure footing We also manufacture solid aisle panels, cattle slats and a complete line of feeders. NEW—Concrete fencing. Call us today and compare. London (519) 455-6680 Out-of-town call collect Seaforth (519) 527-0397 Chatham (519) 354-1162 PG. 22 THE RURAL VOICE/JUNE 1981 FARM MANAGEMENT Recipe for failure By R.F. Heard Area Co-ordinator and Farm Management Specialist "Sometime you should list the steps bankrupt farmers take in getting into that mess!" That was what a prominent Middlesex farmer suggested to me after the first bout of interest rates in the upper teens. It was then that pork prices dropped and there were reports in the papers of a big upsurge of farmer bankruptcies. In a way I did not think much of the suggestion, but there was something in it all right. It was just that I always prefer to "Accent the positive", and as the old song goes, to "eliminate the negative". At the Canadian Banker's Association Agricultural Credit Conference in Winnipeg, one banker gave a case history of a farmer losing his shirt. I will add some of my observations and suggest this recipe. 1. Line up credit for something big, especially if you have never had experience in it. 2. If one banker turns you down keep trying. There are lots of loaning agencies. and everybody knows that a fellow cannot get ahead without using bundles of credit. 3. Do not seek guidance from an experienced farmer. He would only tell you that you are going to fail if you try to do things the way you want. 4. And do not bother those fellows at the Ministry of Agriculture and Food county office. They are like the guys at the Agricultural Colleges. They would want to see your plans figured out on some silly budget or projection. 5. Remember inflation. That is what makes a fellow wealthy. Prices are always going up so if you are to make a small fortune you must own commodities. Doesn't matter which ones - cattle, pigs, corn, soys - they are all going up so just borrow all you can and buy the most you possibly can. 6. Pay no attention to ratios. That stuff about having a one and a half to one ratio of current assets to current liabilities is just so much guff. Leverage. That is the thing. Have all the credit you can get and as little equity as you can get away with. 7. And specialize in one enterprise. We are in the age of specialization and everybody knows that to diversify is to lower net income. 8. Do not keep bothering your banker. Once you get the line of credit do not talk to your banker until your production cycle is complete. Any nut can see he is a busy person and does not want to be bothered by you until you have the loans paid back. 9. If prices go bad on you do not panic. They cannot go down much, and when they bounce up again you will be in clover. Remember, it never makes sense to cut your losses short. 10. Never hedge to lock in a profit. That only keeps you from making a real killing when the markets take off. 11. If the weather clobbers your crops do not worry. Everybody knows that prices are good when crops are poor. 12. In fact, do not worry at all. It does not do any good. And if anybody is going to worry, let the banker do it. 13. And when bankruptcy comes, remember it was not your fault. The banks loaned too many other farmers money and they bid the price of your feeder up to unprofitable levels. Or the pork producers advertised and sold pork and the fickle consumers did not pay enough for beef. And the government pushed interest rates way up. There is no way for a farmer to make a go of it. And those Ontario Ministry of Agriculture and Food advisors gave poor advice. Feed supplement to balance the rations just added costs. So there is is. There just was no chance!!