Regina Housing Market.

[Rareearth]

Not sure why every one wants housing to crash? Or should I say a soft landing?

That's similar to asking for more or less rain,luckily that's mother natures call. Housing, interest rates with government manipulation that's dangerous, always unintended consequences that might cost Ag a bundle?

Markets, industry, etc everything is a cycle, like it or not, that's how markets work. Personally I prefer limited government intervention that benefits all tax payers and Canadian infrastructure. I don't care what housing prices are in certain locations, there has always been these discrepancies and distortions always will be.

[fjlip]

Agree, when land was cheap we were POOR and made SFA from farming/grain.
Land is always EXPENSIVE to buyers that farm, was same for us in the 70's. All got paid.
It is a LONG term deal, need luck too, many lost it all in the 80's.

[farmaholic]

Rareearth: I guess a person's level of satisfaction with the real estate market direction depends on if you want to hold em, fold em or buy em. I sure am happy with farm land appreciation but it sure makes it ugly to buy now.

What exactly do you mean by this statement: "costing Ag a bundle".

I agree with the cycles thing. But people who think that real estate can't or won't correct are only fooling themselves. Also would have to say trends always seem to be up over the loooooong term. But if you buy at the peak, make sure you have enough "time" to see it recover by the time you have to sell it if there is a correction. Part of me would like to see a "reality check" in land prices. I'm not selling so it wouldn't matter to me. I believe it really has gone past the point of making sense. No doubt Sask had some big time catching up to do but the economics of farming it at those prices isn't there. Subsidize that excellent "investment" at today's prices.

[Rareearth]

Every time land values go down in the area, my net worth goes down, ability to borrow, interest rates for operating line, security requirements to buy land ect. I just don't get why or how farmers hope that the price of land goes down? Their ability to buy land, finance and plan anything also goes down, it doesn't make them any more competitive with investors, or neighbours at all.

Steady inflation is actually good for a farmer.

Government policy impact on agriculture should be clearly understood by all farmers by now, example carbon tax

[farmaholic]

.......... I wouldn't sleep at night if my operation was MAX financed using current land values as collateral and almost free money.....

I edited this post and inserted the word max

[macdon02]

I'm wildly bullish ag in general, my issue is deflating crude prices, imo it's a done market, went too high and alternatives are now viable. What we saw in the last budget is govt now has a bullseye on ag, federal and provincial. They can't tax oil Co any more or they are pulling out literally. So with zero intention of shrinking size of govt they found their new golden goose. This applies to municipal govt as well. I'm just not sure a person wants an asset that ties you to a specific location. Homesteaders walked away from land in the past and anything is possible. Get a residential crisis cooking with the debt levels currently and where does govt go for revenue?

[Rareearth]

That's the beauty of being a farmer, we all have opinions and we are all right( at least in our own minds).

I sleep very well at night as I suspect many do.

If I had land free and clear say 4 quarters and it was worth a million dollars, it wasn't used as security or leveraged in any way, that is exactly the same as having a million dollars in the bank receiving 0% interest. It's not quite that simple as the farm has to be looked at and treated as a whole - business.

Now if you go to negative interest rates and deflation --- then you have to pay.

Where would you rather invest , stock market or your family business?

[farmaholic]

Some one once told me to invest in "what you know". So the farm would be the place for me.

[hobbyfrmr]

.......... I wouldn't sleep at night if my operation was financed using current land values as collateral and almost free money.....

It seems to me this is the way its done. Borrow against equity to operate. Machinery lease becomes a dollar per acre operating cost.
I dont know any other way to finance farm activities. By the time you get decent equipment and put a crop in, we're talking in millions of dollars. I dont think there is that much access to unsecured credit.

[farmaholic]

There probably hasn't been a better time to borrow money than through the low interest rates we've experienced....with a degree of caution though.

Where's Errol?

[farmaholic]

How much will the bank/FCC lend you on a $320-480K quarter?

Maybe that is its true value? Kinda a stoopid question...so many variables. Let's say minimum down payment and not alot of ability to subsidize it.

[Rareearth]

Again we all have different priorities, goals, values, risk tolerance ect

These all change regularly depending on many factors, mood is the most challenging for farmers.