land prices

[furrowtickler]

So the time to buy would be in or after 2012 - this is what I belive as well. Hope the movie is wrong, lol. Intrest rates will be the trumph card though.
BTW - land did sell here for $120,000 per 1/4
before only to be followed by 70-80g within two years. Everything cycles and when the sky is the limit it crashes - oil,wheat,land,housing,ect,ect. Long term trend in land is still going to be up,I agree, but up from what? I totaly agree that land will settle back down too $600/$700/ac for a while before averageing up again. It is called a normal progression. Land prices have doubled here within three years - thats just too fast as was the grain market spike in '08 - somethings gota give sooner or later.

[sagewood]

What I was basing my math on was my own situation. I long ago paid off my land--long ago I got out of grain farming and the expensive equipment that goes with it. I seeded all my grain land to hay and ran purebred cattle on the native grass. Both hay and cattle paid extremely well for me for many years. The need to buy ever increasing machinery was negated (I take extremely good care of my equipment, thus it lasts me many, many years). I sold any equipment that was associated with grain farming. My operation caught the notice of a few neighbors, who in turn gave up the grain end of things and went to cattle and hay--we have decreased our input costs dramatically and if and when things turn around after the BSE and export issues and so forth, I suspect that anyone keeping their expenses in check and not falling for all the latest 'must have' items on equipment and crop inputs would do well again. I have managed to pay all my bills, make improvements, bank a little on the good years and still have the value of the land without mortgages against it. This all comes from years of working more than one job, I admit, but I was not given the land, the machinery or the cattle, it all had to be earned as the years progressed. I admire those who can continue to grain farm and can handle the horrible costs of fertilizer, sprays, seed, insurance and equipment. I cannot imagine the stress of land payments on top of all of that.

[burnt]

I farm in south-western Ontario and in the last 24 hrs. spoke to 2 farmers who are being chased by their "farmer" neighbours to sell to them.

Both have a productive 150 ac. parcel as a home base, with good , modern buildings. 2700 and 2800 CHU land. 150 and 175 bu. corn ground.

The one was offered $1.5 million by his Mennonite neighbour and the other $1.3 million by his Dutch neighbour.

Total insanity.

[skip]

Hey Burnt:
Pardon my math...is that $10,000 per acre? Why would these guys pay that kind of money...I am assuming they both can't be insane.

[burnt]

You get an "A" in math.

I don't know why for sure, because I only know the guys who own the land.

I understand that in both cases the guys who want to buy have a son whom they want to set up with a farm next to what they (the dads) already own.

So I guess it's a case of old money or at least a significant chunk of land that is already paid for.

Because it goes without saying that it is impossible to for that land to pay for itself by growing anything legal! ;-)

I guess in the case of the Mennonite neighbour, those guys buy a farm for their sons at any cost.

[boarderbloke]

burnt, will he need to spend 1/3 of it to buy a decent house in town/city? an investment that won't likely yield much in capital gains for several years.

[grrrr]

I have been away for a couple of days and just now have caught up with all the comments on this thread. Wow, does this ever sound like 1980 talking!

[burnt]

boarderbloke - No, he would not. 1/3 would buy one of the one of the higher end houses in town. But it's hard to say where the best gain can be made with land values where they are.

I have given up trying to call it. My calls have cost me too much! Haha.

[SASKFARMER3]

Best investment in last 10 years was house I built in Regina Cost 168,000 with loads of oak big lot bigger street in high end neighbor hood not biggest house but nice. Value 4.5 times higher today. Land has increased but not as much. Land has done ok in value but not as big of increase in value.

[boarderbloke]

on our trip to CR, we met rural people from Iowa, Nebraska, and Kansas. A couple farmed, others rented out land, but they're talking about prices ranging $4000. to $8000. per acre! Made my land, even with oil, sound cheap.

[burnt]

Earlier this week,I met at the coffee shop a chap from Waterloo, Iowa. He was visiting family in our area here in S.W. Ontario.

He is a retired farmer/mechanic, so we compared land prices in our respective areas.

If he was anywhere near accurate with his figures, Iowa is closer to affordable than Ontario.

According to what he said, 200 bu corn ground sells for the same or less than 150 - 175 bu. ground in this area. And I don't think Iowa farmers have the drying costs that we have here.

It seems to have gone kinda crazy around here in the last few years.

What's gonna happen if/when interest rates go to even just 7 or 8%?

Those of us who survived 20% in the 80's might get taken out by 8%! Haha.