Worst Investment Out There? Farmland, Investor Says

[cottonpicken]

Gartman doesn't have the best track record he is a rolling joke in some circles. The main factors will be price of grain and interest rates. Very worried about ethanol and corn factor he may be right. Oil tanking is bad for us. As far as stocks they are sky high along with bonds and everyone now seems to sence the global economy is dragging.

Weird times.

[freewheat]

Back in Joke ag, I remember a chart on land values we were shown. Every single time commodities flucuated, land values followed along, with a two or three year delay.

Maybe we are in a different world though now? Less droughty conditions lately. Guys think 9 something canola is low. Lots of wealth was built the last several years in the blessed areas, which changes the dynamic a lot.

[jake550]

Truth is that it's anyone's guess I'd say... however it's pretty simple math that most of us knew before kindergarten that at current costs vs income it doesn't ad up. Something will give in time...

[freewheat]

Any kind of weather disaster will hurt too.

[furrowtickler]

Free wheat - lol , I clearly remember that as well , one of the few things that stuck in my mind at that time

[canolacrazy]

that's what i like about agriville. lot of opinions. pick one. many will remember an economist from toronto predicting $200/barrel oil just around the corner a couple of years ago. made front page news. haven't heard much from him lately. contributors to agriville may be just regular people in agriculture, but i find a lot more common sense here then in report on business.

[ColevilleH2S]

My 8 year-old has more sense than Jeff Ruban. How he ever rose to such prominence is beyond me.

[farmaholic]

To assume people who forecast a correction are hoping for a crash is silly. Who wants to see the bottom fall out of their largest asset? And it would be just as foolish to deny there isn't a correction looming, it happened in the past and will again. Reset time.

My comments of liking to see the people who are going to farm the land own it is my opinion, as I have a right to mine, you have a right to yours. I would rarher see the neighbors and young farmers gain equity than pay rent to some foreign landlord or
investment cartel be it domestic or foreign.

To each their own. But land prices right now are not based on the ability for it to pay for itself. Wait for the decline in the rate of appreciation land has enjoyed the last several years and the only return is rent. With any luck the investors will never experience sharp declines in the land and renting their land for taxes if they are lucky enough to even find a tennent. Remember?

[Oliver88]

What was Gartman's oil prediction for 2014?
The average expert predicted $94....read this in WSJ a while back.

SF3- there is lots of optimism in your area if $73/acre, 3year contracts are normal.
Might be an opportunity for you to diversify and rent out some of your further away or wettest land?? Wear the landlord hat for a few years on some land?

[agstar77]

No one can pedict the future.

[SASKFARMER3]

Yes they can history repeats over and over. Here we go again.

[jd3007]

There are a number of growers I know who are hoping for a repeat of the late 80s early 90s. High early 80s land prices, high interest, drought and low commodity prices forced many growers to give land back to financial institutions. FCC and the banks where overwhelmed with land that needed to get rid of. There where many farms that bought and paid for land in the 70s and went in to the 80s pretty much debt free. These were the guys that cashed in on reposed land deals because they still had their 1970/early 80s cash and paid for farms.$30000 - $40000 bought you some pretty decent land back in the early 90s. I know many of these growers and after the bank deals quit they pretty much quit buying too. It is these guys who are bitching the loudest about land prices because they want it for nothing. Its that old sask NDP attitude. I know because my whole family is this way! I still have family and neighbors wanting things to go back to that point so they can buy again! I along with a number of other younger guys in the area have been buying land yearly where cash flow and the banker permits. No one is paying record highs but area averages. There will be a point where we will all quit buying and at that point I want things to maintain or go up. Anyone that has an asset would hope this happens. A correction is coming but since most of us started with cheap land bought some average and a little high, going back to average again isn't such a bad thing if you are still buying. I don't know if we will go back to the late 80s and early 90s and heaven forbid this happen. I started at that time so hopefully lessons learned from that crash can get you through the next one.