Value of farm land

[charliep]

Here is an interesting interview Merle Good did for farmtech.

[URL="https://www.fcc-fac.ca/en/ag-knowledge/production/farmland-buy-or-rent-with-merle-good.html"]FCC video[/URL]

[blackpowder]

I'm gonna get shot down again but.
Here on the west side of Tom country a quarter just closed for a bit more than $3000/ cultivated acre.

[Ronski]

Realtor friend told me this week that land Lacombe area has traded for 7000 per acre. That was a special case bur he said 4-6000 per arable acre is ballpark. WTF!!!

[MBgrower]

Further east of bravehart in sc mb, heavy poorly drained gumbo clay selling at 4000-4500 per acre. Nuts.

[Braveheart]

Farmaholic, they're nuts! A German docked his U boat in the local slough and announced the land around this place is cheap! (His farm is for sale now.)

A local colony got the land squeeze put on them by an aggressive young non Hutt. The Hutts responded by jacking the price to $3000.00.

It is what is. Double edged sword. It's made us very wealthy on paper.

I have a son wanting to farm and it's made it very hard for him. People either want that price or, won't sell because it's going to go higher.

[Klause]

Cure for high prices is high prices, eventually.


I'm out of the land market unless we get a good deal....

I can see things dropping around here back to that 1,000-1100 / acre mark.

[BreadWinner]

Land is being bought up by investors to be a safe haven for their money not to make huge profits. Land won't go down in price, it's called inflation and we better get used to it. Buy land if it works but the days of being able to pay it off in a lifetime are coming to an end. Every piece of land that I've bought has turned out to be a good decision even though at the time you really wondered.

[foragefarmer]

Braveheart

$3000.00 an acre that's is insanely high. I thought you were aggressively buying land off the neighbors based on previous threads? How do you and your son make the numbers work at those prices?

[farmaholic]

And that's the difference.....

Well heeled Hutterite Colonies or private farms who can subsidize it with paid for holdings. Investors who are looking for somewhere to store some cash. But if I was to buy it, it would have to show some hope of paying for its self even though we have 16 paid for to help. Otherwise how good of an investment is it? There was an adjustment in the mid eighties, it can happen again, then how long can it be before you get your initial investment back?

If you're going to finance $3000/acre dirt, how much will the bank lend you per acre? They could care less if you want to pay 5k, they still may only lend you $1500-$2000/ acre. Then there's the amortization period, depending on the length of the term, be prepared to pay nearly double what you borrowed.

It hasn't reached that level of insanity here yet. The dirt may not be worth those values to start with.

[Braveheart]

I never said I was aggressively buying. I a said something to the effect that if some neighbours kept tilling we'd soon own their farms.

That was a snarky way of saying tillage is unsustainable around here. (God, I'm sick of that word, sustainable).

We find that number too much risk right now. I know, "you want the biscuit, you gotta risk it". We just need to be strategic. It's war after all.

There are crazy things being done in this area in capital outlays for machinery, land purchase and even rent. Farm Debt Mediation will be welcoming some new entrants soon.