Where do we go from here??

[furrowtickler]

Some land sold around here in early Jan for over 4.5 times asses. Average land at best(45-65000) with bush and rock ridges, 12 miles east of town. No oil anywhere in sight and no chance over urban developement for 100 yrs or so...? Too far from town for acreages with no proven scorce of water.
Just a pissin match between a young aggresive guy and old money non- farmer. Around $250,000 per 1/4. This same dirt could not fetch $70,000 a few years back.
What else is going on that most of us don't know about? This can not be just a grain price driven market or good investment opertunity, niether one makes any sense what-so-ever.

[TOM4CWB]

Furrow,

Take a good listen to Bloomberg or other investment services.

Canada is now the 'Gold' standard for investments... with the most stable economy in the G7.

Not a surprise that folks put their money in land instead of the bank... and borrow funds at very cheap rates.

Be happy you have some land that is appreciating along with the rest... as the tide is making all ships rise!!!

Cheers!

[bucket]

Tides go down as well and there is a better chance of a shipwreck at low tides.

If I was younger and had time on my side and the land, I would sell out and wait to become a salvage master.

[furrowtickler]

I have also heard of some major funds are about to sweep up as much dirt as possible as quickly as possible. The Canadian Federal pension fund is one of them, Bonnefield Canadian Farmland Corp, as well as the already large wealth management groups established.
Ya, my land has "trippled in value" in the last five years but so did the houses in Arizona and Florida before 2008 and land here in the mid 80's.
I understand your statement Tom but it really depends on your age in all of this. 70's ready to retire with no siblings best time in history. 40's looking to expand - numbers do not work anymore. 20's getting started, you will never own the land and you will be working for a walmart farm corp very soon.
Ya the future is bright in ag but for who???
Investers paying this kind of money will never make a possitive return in the long run.
Read that post on farming in Russia. Time will tell how long grain/oilseed prices will stay at these levels.
Remember when oil was 120 goin to 200, what happned - too far too fast.
What happened to wheat in Minni, from $6 - to 25 then - crash. Again too far too fast.

[ajl]

Excellent analysis furrow. We will be
reminded that cheap land is what keeps
Western Canada competitive with Brazil and
Russia is cheap land. Russia is always
its own worst enemy but if that ever
changes watch out. I an in the 40 yr old
category that you described well.

[SASKFARMER3]

Probably the hardest thing in the world
to do in land markets like this is to
sit and wait. AG its driving me crazy
but History does repeat it self and this
time it will be a doozey.
Now if someone came in with a 4.5 times
my assessment then I guess Im out of
here. That gets so close to my number
for letting go.
But deep down their is going to be huge
opportunity for purchasing again. One
frost or two.

[cottonpicken]

You have to stay focused on value on not price.

When gold hits 5 grand and wheat goes back over
25 it will all be a little clearer.

Plus the old land laws and commodity bear
market of 83-2001 made us the cheapest farm
acres anywhere.

[cottonpicken]

4 times zones to the west right now and got to
have a great conversation with an american
government fudicuary at a pool bar.

He is head of the department and moves 10
figures around the markets,so you can imagine
my thrill.

Anywho it was nothing but fear in his thoughts.


I had no problem buying this man a 90 dollar shot
of scotch.

[Mufferaw]

If land foes for 4.5 times the assessment, why would you argue with it? Far too often people get emotionally tied to the land, and don't sell because of that attachment. After all it's just land.

My land is assessed on average around 40,000, if someone came an offered me 2.5x the assessment when historically it sells at assessment, it would be gone in a heartbeat - with the exception of the home quarter.

If someone wants to overpay let them. Buy a cheap house in Arizona and spend some more time off in the winter.

[Hopperbin]

Is that that land that has a farmer paying 80 per acre rent? 80 per acre rent will still bring an investor 5 percent before municipal tax.

[Hopperbin]

Sask. you would have some serious tax issues, you will have to use every kid's kids's spouse's aunt and uncles capital gain exemption that haven't been used yet, if that is even legal :-).

[SASKFARMER3]

The Tax issue would be huge.
Cotton are you in Hawaii now?

[furrowtickler]

Hopper, not the same land but ya same area.
It seems one is pushing the other higher and higher.
It is like a fever, one day it's the rent pushing land values up and the next it's land values pushing the rents.
This keeps up and ya, might just pull the pin, 10 years before we planned - who knows?

[Tucker]

This is getting a little scary (for the average Canadian, not me) when long-time
successful farmers are considering pulling the pin. Really, I could sell out now and
be a multi-multi millionaire! Let's repeat that... Multi-multi-millionaire! You
really think these investment companies can convince their tenants to stay the long
hours necessary to feed Canada? Never mind the rest of the world. Well at these
prices I don't really care, I can feed myself and my family well past my life
expectancy with no more dusty bins or grain auger motors that won't ****ing start at
30 below. How many multi-millionaires do you know who know how to disassemble a carb?

I guess I should sell out, take my millions, then sit back and watch the wreckage.
Give it ten years and buy back in the bottom again.

Furrow, when guys like you are thinking of taking the money and running, the country
had better sit up right quick and take notice!

[Hopperbin]

Tucker near me many old yard sites were considered a write off 10 years ago. Today they are all purchased. Also in my area the odd quarter because of soil was almost un rentable. Today it is worth 1000 per acre. When I was buying land a few years back I looked at how much work was put into making the land grain farmable. Like rock picking and drainage and bush removal. Some of my estimates were over the cost of purchasing the land so my choice to fix and use 20 year plus combines was justified. This land price increase is long over due and its not over in my opinion.