Land Rent is the insanity coming to an end?

[mbratrud]

I am hearing of large chucks of land being put up for tender. Lots of chatter about values. Lots of rumours about one big farm in southern Sask backing out of large value leases signed in the last year or 2. Apparently its not profitable to rent for $80 - $100 an acre as a one time farmer of the year couple are finding out. Go figuire.... What are other hearing in their areas?

[mbratrud]

should read chunks of land, or maybe sloughs

[hobbyfrmr]

Is this the farmer of the year that sold his land to a land management company in order to finance a bigger farm business scenario? It sounded like it could work. They have really nice machinery. I suspect the weather has beat them up, otherwise they would be wildly successful.
If they have a sound business plan in which I think a farmer of the year does, they will make their way through the rough spots.

[furrowtickler]

Not here, still retarded bids.

[johndeere1]

hobby farmer are you serious? How could selling your assets to buy machinery be smart. All your left with is worn out machinery worth nothing. buy land!!!! not sell it.
I don't think any of the "farmer of the year" winners are doing very good.

[hobbyfrmr]

johndeere, I tried to incoporate subtle sarcasm and you caught it. I was trying to figure out who we are really talking about. I am pretty sure I was going to U of S at the same time as this person. From what I recall..and what the topic reads...they better have a good business plan. Since I have learned about this strategy, I have not ever understood it. Farmer of the Year award must carry some kind of merit. I had a neighbor who won that, and has since sold his farm to move onto other ventures. I have yet to figure out if I should still be farming! So, being a coward, and instead of outright bashing the person/farm manager in case its the wrong person/farm manager, I was trying to passively gather more insight.

[freewheat]

You never read the memo? Gary Pike types, (you know, the guy who said "quick, buy phosphate at 1400 a tonne", back a couple of years), has been encouraging farmers to sell their land in order to get better machinery/working capital.

Wigmore farms by Regina is run by some wierd couple from assiniboia or some such place, after they sold their land and rented it back. Probably to get them out of the auction flyer.

It is no joke, there are those who think this is a great idea...

[freewheat]

Hobby farmer, that what I just wrote was for john deere guy.

[blackpowder]

Ah yes... Gary Pike.
Did he really advise 1400 phos??
You got me curious
His fiddle seems to have only one note. "Lower fixed costs by expanding!!" He was at my place for 3 hrs once years ago, and I'm still chuckling.
mbratrud: you know where I live; I'd be surprised if new rents will be under 70-75. 50 bushel wheat or canola land. I don't like it either.

[hobbyfrmr]

So,is Wigmore Farms dropping "modules" of expensive rented land? Or...is this the Farmers of the Year couple? Are they one in the same? This could be a case of Wigmore Farms management dropping rented land they overpaid for? So really, the "company" drops the landlords, and the people managing the company will still come out smelling like a rose. Good Management. A sound business plan actually works. http://docs.google.com/viewer?a=v&q=cache:9mkEammftKgJ:www.farmcentre.com/Documents/Events/Excellence2008/Saskatchewan-Norman-and-Laura-Shoemaker_EN.pdf norm shoemaker wigmore farms&hl=en&gl=ca&pid=bl&srcid=ADGEESiIt2bhVaOAC4P 7QXvxrcsJ8-tnaNqrMd_7oUBKYUvQt17Kdmjt8m7iNbJ_VZgq7ZDbFJ9YiITC cclYCP5nCPttKMkOu02njnd1a3_b1hFDK1qLHjJLQLu1rhCWnU 7-cc-I8Inc&sig=AHIEtbSa8rAdWyqCLxIv7cntAlKTb4juag.

Last question. Is there any really facts to prove this? Or...am I contributing to a gossip session?

[$short]

The high rent prices are crazy. With cash rent in the 60 to 70 dollar range and fertilizer prices around 90 bucks an ac it takes around 300 gross revenue or better to breakeven. Thats a lot of risk.

What range are guys using for canola prices next year when budgeting.

[blackpowder]

I agree, its very dangerous.
1 landlord explained his reasoning:
Current market value of land x bank interest. Like to know where he banks

[mbratrud]

Wow did this thread go on a tangent... I can't say I know anyone personally who was farmer of the year, I guess I hang out in the wrong circles... Hobby thanks for the insight maybe the rumour is true, I was questioning a rumour I know nothing about, and your participation I guess makes you part of the gossip circle. To be at the mercy of a landlord to ensure the survival of your farm is never a good idea. I can go down to the local dealership and buy a peice of equipment any day of the week, land is a different story, why would you sell it to buy machinary?

[freewheat]

$ short I'm using 14 dollars for my canola budget. We don't have dumb rents here yet thankfully, but there have been poor crops or no crops out here since 2004. Finally this year we grew one, but it wa below average. Rent is still 30-40 out here..

[hobbyfrmr]

Back to topic, cash rent in my area is $60/acre in a phone call, and if a land owner wants to apply themselves, make 3 phone calls, results would get close to $70/acre.