Land prices

[farmaholic]

mbratrud, I agree with everything in your last post. Especially the catch up for Sask land prices. Where I farm, land still "sounds" cheap in comparison to some other areas that don't seem to have any better quality land than here. I was lucky enough to have all my land purchased over 10 years ago. So I got the net worth bump without doing anything other than buying early. Now I just need to get my head around the new reality of paying 3 to 4 times more than I paid for any previous purchased land. Right now I'm enjoying watching from the side lines and may look at playing if things correct a bit. If things continue to escalate I guess I was wrong and am further behind. Anyone's "guess" is as good as mine....

[bucket]

Farmaholic - questions?

With the returns on your land appreciating would it not make sense to look at taking some profit?

When I was younger, had I bought all the land available then and overpaid by 10 percent I would have no problem selling or renting it at high prices.

No longer looking for more work for less pay.

[phoenix64]

No risk!! pumped every nickel of oilfield money over 30 years into buying land and equipment! Never had to compete against anyone else but other farmers, like I said before producers will bid up land just as high as other investors.. No problem there, though it may take more than one farmer to buy out the neighbor at today's prices. For myself I'm good purchased 3400ac of land before things got crazy and renting more from a neighbor and friend, what concerns me is the viability of smaller communities with rec facilities, schools etc, if the trend to absentee land owners and large farms renting 100 000ac or more sweeping through an area? who is this good for?

[farmaholic]

bucket, I understand your sentiment. We don't farm a pile, 16 quarters, all ours. If I didn't have someone else to pass the "burden"(lol) to(kid) I would maybe consider your advice.

Another thought, if everyone else, who isn't farming and trying to make a living on it, thinks its a good investment why isn't it for me too?

Ever compare renting versus purchasing? Everyone's numbers are different depending on how much you paid for the land, how much you put down on it, and what land in the area is renting for. I know a guy who bought land(before the run up) and is renting it out, his tenant is paying for his land, smart on the purchaser's part and ouch on the tenant's part.

[farmaholic]

Bucket, in this economic climate, I don't know if there are alot better places to have money invested. Cash out and invest where? Cotton?

[MBgrower]

I cant believe any farmer on here who owns land is complaining about the price of land going up. The value of your farms have gone up by millions of dollars in the last several years. I for one would love to see $10,000 per acre in my area. Afterall the end game is to build wealth, not buying depreciable assets and farming more and more land at break even costs.

[burnt]

So, to provide some perspective, this conversation is one hundred years old...

[bucket]

Thanks farmaholic. Confirms what I struggle with all the time.

Not only where to put the money but how to fill the time.

I am not going to farm to make someone else rich on my labour and skill set (limited lol).

But the biggest issue facing big corporate farms in the next decade will be finding people that understands the nature of farming.

Basically when to show up and when not to.

[Guest]

we all own land , no one wants to see it go down , but it will . as soon as some farmers realize that they can't make money paying $100 plus per acre (likely their bankers will inform them of that little fact) it will drop and that will shut the investment flow off . even the ultra rich won't be able to find people that know how to farm to farm their land . but as someone else said it is a good thing so that we can still have some rural communities and new young farmers can have some hope as we did when we started . it's not all about us now

[cottonpicken]

I still think its a good place to be,been saying that a long long time. It may cool off and doubling from here is tough but in the longer term when the wheels fall it could goto many many multiples. You wont be any better off it will all be relative but you will have something preserved.

Unlike other investments.

[farmaholic]

I have to laugh. I was told my Grandfather told his sons and son in law they were crazy paying $5000 a quarter. When I paid 10 times that for the same land, who would have thought their investment would be ten times what they paid. Now, we are at about 4 to 5 times what I paid and am a little over the hill in age and have more time left, God willing(with my help of some clean living, ha). But I thought the power of appreciation was diminishing at these higher values. We'll see. Anyone have a functioning crystal ball?

[cottonpicken]

Some may have to take my word for it but if you where to take a gold chart over fifty years and over lay a land price chart they would be freakishly the same. This is no accident or coinsidence. It's mechanics of the market.

[mbratrud]

I agree cotton.

[cottonpicken]

Dont think anyone thinks gold is going back to 35 an ounce and land is going to 35 an acre so what happened?

Nixon took the us off the gold standard because Charles degaulle started redeeming paper for gold because he seen the spending and the prolificacy of the government. It was obvious gold was going to fly upward in dollar terms and nearly everything else had to go up because of the money supply and debt so Nixon had to let it float on its own. What people fail to understand is inflation is a tax. Apparently that doesn't matter anymore people want the government controlling everything.

So anywhoo fast forward to the eighties and the top guys realized things where spinning out of contr so they brought volker in to contain the situation. He jacked the rates and gave the medicine to the economy and it survived .savings,capital formation and all that macro stuff .fast forward to today and its a whole new ball game. Maybe there is some plan to fix it but I have not read it or seen any sort of evidence one is being implemented other than the out right manipulation of the entire market to put off the day of reconning.on the last day of the year the debt went up one hundred billion dollars.

This stuff is all very related to the price of land.

[charliep]

A little confused. Are rising land prices a good thing or bad thing? The only comment I got is that it depends if you are a buyer or seller.

Is land an investment or an asset that produces income?