Can Canadian Ag Survive a Down Turn!

[farmaholic]

Sk-wheat....I've been wrong for the last 3 to 5 years but I have a hard time believing it can sustain the growth rates of the last while. In fact I think it is kind of over valued now. I don't know what will happen. But I would bet if it does correct it will stay down for a "period"(you define your own timeframe) but will recover and maybe surpass current values if the economics of farming drive it there. Speculation was responsible for much of the appreciation in this area. Tenants don't have to make it worth while for investors to own land!

Sask's suppressed land(Gov ownership policy) prices were the perfect environment for some investors to do very well....the party just might be over.

[SASKFARMER3]

No this isn't about me.

Its about what i see world wide in ag with our competitors and whats going on in Crazy Sask.

We grow one crop a year nothing grows in snow at least i haven't found that yet.

Yes ill buy when our land locally gets back to 200 or less because you can make money at over 328 and up to 428 sorry no it doesn't and thats what i was showing.

But if a crash does happen the banks won't borrow hell they will have other problems to worry about land. So new ways maybe like Brazil will happen barter system. I dont know.

just stirring the pot.

I wish some one would give me a reason why the high prices on every thing from seed to equipment to land has to continue to rise.

Just one reason.

[Kinger]

Land won't go down until farm profitability takes a pretty severe nose dive. Yeah this year wasn't great for some but the last 10 years have been far and above the best in farming.

Likely will be a minor correction but won't be a doom and gloom scenario.

Or i'm totally wrong and see a new depression hit. 50/50 either way.

[sk_wheatking]

No this isn't about me.

Its about what i see world wide in ag with our competitors and whats going on in Crazy Sask.

We grow one crop a year nothing grows in snow at least i haven't found that yet.

Yes ill buy when our land locally gets back to 200 or less because you can make money at over 328 and up to 428 sorry no it doesn't and thats what i was showing.

But if a crash does happen the banks won't borrow hell they will have other problems to worry about land. So new ways maybe like Brazil will happen barter system. I dont know.

just stirring the pot.

I wish some one would give me a reason why the high prices on every thing from seed to equipment to land has to continue to rise.

Just one reason.

Because it can.

[SASKFARMER3]

Thats not a answer it can go down is lots of examples through out history.
Since the great crash to weather.

Why is Canada a one crop country seeing huge price increase in land vs double crop areas. What makes our dirt better. And were land locked.

Not because it can.

Hell every thing goes up eventually goes down.


Argue the facts why does it continue to go up why.

Housing did and then flat to dropping now.

Condos a whole different ball park.

I personally don't think Canadian farmers are as well off as some think they are.

[RichFarmer]

I don't believe we will ever see a large reduction in land values for a number of reason:

1. We still have significantly lower land values than anywhere else in the world. Farmers in other parts of the world that are over populated can sell off land were they are and come here and double or triple their land base.
2. Similar to my first point is investors from all over the world are looking for deals and land in Saskatchewan is still a deal. Agronomic and farming practices are making it easier to grow crops on marginal land. The internet also gets an assist on this one.
3. Large farmers are continuing to leverage owned land to increase farm size every year farms get larger the guys that are hungry for it wont stop as long as there is a penny to squeeze for leverage.

I argue these points with my cousin all the time while he's been waiting his whole life for land to drop so he can buy he turns 40 next week and he's still waiting...........

[Richard5]

I know sf3 land goes up and down in price. But why some people hope for a land crash is beyond me. It will go down or maybe go up or maybe stay the same. Who knows. I don't really care what land prices are right now I'm not buying or selling. I may be reading your responses the wrong way because things get lost in translation of emotions in print easily so excuse me if I'm wrong but you really get upset if someone posts something you don't agree with. I get it you want 50,000 a quarter land for various reasons. Just remember if land prices tank so will everything else. It's relativity. I'm sorry you can't accept friendly debate. I've been on your side on most issues anyway.

We can illustrate all kinds of examples like the original post. I don’t think some of the large operations can afford to have land drop because they have maxed out the lending ration and stupid chartered banks and FCC have allowed it. Take a 20,000 acre farm with a 20,000,000+ mortgage. In my mind you are close to bankrupt already but throw in a full line of leased equipment that has zero equity and is all debt also. Throw in an input capital deal on a portiom of the land also. Throw in the huge tax liability in the event of a downsize.

Some of these operations will be doomed before the crash of it happens.

If all you have done in the last 12 years is grow assets and the same in debt, that’s real progress.

But unfortunately, i think this is where a number of the these well known, always talked about farms are sitting at

[quadtrac]

I don't believe we will ever see a large reduction in land values for a number of reason:

1. We still have significantly lower land values than anywhere else in the world. Farmers in other parts of the world that are over populated can sell off land were they are and come here and double or triple their land base.
2. Similar to my first point is investors from all over the world are looking for deals and land in Saskatchewan is still a deal. Agronomic and farming practices are making it easier to grow crops on marginal land. The internet also gets an assist on this one.
3. Large farmers are continuing to leverage owned land to increase farm size every year farms get larger the guys that are hungry for it wont stop as long as there is a penny to squeeze for leverage.

I argue these points with my cousin all the time while he's been waiting his whole life for land to drop so he can buy he turns 40 next week and he's still waiting...........

Agreed... think this is far closer to accurate than anything else posted here.

[SASKFARMER3]

Guys yes we have investors but our competing countries are gaining ground and they dont have our costs.

1. Land cheaper in South america or same and Have two Crops.
2. Way cheaper in Old Soviet block and they aren't letting in guys to buy it up.
3. One more dry year and those who think our new way of farming will save us will see.
4. Leveraging finally comes to a end once prices drop and you cant keep getting bigger and bigger till the bank head finally says our risk has out grown this farm.
5. Book some new crop peas and tell me how good farming will get.
6. Land since it has been broke in Canada has three times it inflated and fell each time. Are we approaching the fourth.
7. Your cousin is in the age he was two young to buy on the last blip and just hit his stride now at the top.
8. Life is about timing and i think its the wrong time.
9. their is no sure crop double crop area in Western Canada.
10. Were getting beat at our own game on Carbon taxes and rules plus plant rights and chem rights by countries that dont care or need to worry about such bullshit.

The list can go on and on.

Just saying were almost at the peak.

[Klause]

I don't believe we will ever see a large reduction in land values for a number of reason:

1. We still have significantly lower land values than anywhere else in the world. Farmers in other parts of the world that are over populated can sell off land were they are and come here and double or triple their land base.
2. Similar to my first point is investors from all over the world are looking for deals and land in Saskatchewan is still a deal. Agronomic and farming practices are making it easier to grow crops on marginal land. The internet also gets an assist on this one.
3. Large farmers are continuing to leverage owned land to increase farm size every year farms get larger the guys that are hungry for it wont stop as long as there is a penny to squeeze for leverage.

I argue these points with my cousin all the time while he's been waiting his whole life for land to drop so he can buy he turns 40 next week and he's still waiting...........

LOL @ points 1 and 2.


Investors have left the building. Consensus is land is over valued in western Canada.


Canadians arguing about the rest of the world without any experience... Leads to arguments with no basis in reality.

[Klause]

"land never goes down"

Les Henry has a different take. And he's a wise old soul.

[URL="https://www.grainews.ca/2017/02/03/90-years-of-saskatchewan-farmland-prices-2/"]https://www.grainews.ca/2017/02/03/90-years-of-saskatchewan-farmland-prices-2/[/URL]

[farmaholic]

A couple of comments.... I always(usually, I think) use the word "correct" not "crash" because I would bet the farm it isn't going down to $60-80,000/quarter(but I refuse to say never again).

I have said we can all agree the bar has been raised! No doubt.

It's never "felt right" any time in the past when I bought land but in hindsight(sometimes long term hindsight) it has always been the right thing to do.... but this time I may not have enough time(if it was being purchased for just me).

I too had neighbors who sat at their hands at land auction sales or never made any private deals because the land was always too expensive. Like I said, I made an offer on some neighboring land and I doubt it will be taken.... even though the offer was based on the highest recorded sales for this type of land in this R.M. by the Farmland Security Board.

Land is a long term investment at these values for sure!

How much appreciation do you think could possibly be left? Don't economics of farming it ever come into play? Are you buying it to speculate with or make a living farming it? Hopefully both.

[SASKFARMER3]

correction is what i was looking for want a job proof reading and spell check so Grass is happy.


Pays the shits like farming but still keeps a guy alive.


Land is a necessity for farming but im looking at the big picture not just canada.

Huge USA Farmers are in Receivership or done.

Cant happen in Canada I'm told.

Ha i say.

Can happen to any body if something you didn't see goes on or something you cant control hits you.

Its farming but right now at these levels i don't see it going much higher before the end.

Yes it won't hit the 50000 level i stated that all along.

But like previous times in Canadian History it will drop by a percentage before moving up again.

History does repeat and knowing the right time to pull or sink or swim is the question.

But todays question was explain why it has to keep going up.

Look every one at the big picture.

Your costs your investment and your retirement.

[dalek]

"land never goes down"

Les Henry has a different take. And he's a wise old soul.

[URL="https://www.grainews.ca/2017/02/03/90-years-of-saskatchewan-farmland-prices-2/"]https://www.grainews.ca/2017/02/03/90-years-of-saskatchewan-farmland-prices-2/[/URL]

I’m looking across the road at 100 acres with a story.
At the end of WW1 a bachelor paid $2000 for it at auction. My great grandfather bid to $1800 and got cold feet.
In ‘28 the lucky bidder went to town with the yearly mortgage, got distracted by the hotel next door and lost it all in a poker game. Bank took the farm back and couldn’t get what they were still owed at auction so they rented it to my 20 year old grandfather year to year figuring prices would rebound.
In 1939 they finally got sick of dealing with it and sold it to him for $200.
Land never goes down except when it does

[sk_wheatking]

If land in sf3 area goes to 60,000 a quarter I would have to pay someone to take my stuff. It's what the sf3 guys of the world call "garbage". We somehow manage to grow a crop on it. In all seriousness I feel lucky to be able to call a piece of land mine no matter what it looks like or how stupid people think someone must have been to buy it. I don't begrudge anyone for buying any piece of land or what they pay for it. That's their business. I might not agree with it but what does it matter, has no effect on my life. I'm happy for What I have.