Can Canadian Ag Survive a Down Turn!

[bucket]

In 2007 I was talking to a guy that couldn't rent his farm ....he had to pay someone to keep it in shape....wasn't in my area....

That doesn't seem that long ago..

[tweety]

Land is yes a asset.

So if land drops like every time in Canadaina History since it was settled.

For a very short time it may have - but land has never dropped over the term that matters, and it never will.

Agriculture is flush with cash, bursting at the seams with income to spend on all that extremely over sized ridiculously priced equipment that lasts even less hours then it did 20 years ago.

[MBgrower]

the ones who will be in trouble when the down turn begins (and yes it will return it always does) are the ones farming and spending based on the boom prices and yields we've seen from 2008 till now. I've farmed long enough to know that we will see a cycle of 5, maybe 10 years of poor prices, and bad weather or a comb of both. the young btos will have to learn some hard lessons.

[tmyrfield]

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. Reply With Quote

The simple reason is...we won't let it.
Quarter section comes up for sale next door and before you know it bids are coming in fast and furious can't pay too much for land.
The guy who ends up with it now needs a new combine, maybe a new drill to. quick, to the dealers to make a deposit before production is all booked up.
Phone input dealer to book more fertilizer and canola seed, before it to goes up or runs out.
Now take a few pictures of everything all shiny and new and put it on social media.
what a hero.
Government bureaucrats and statisticians look at these nice pictures of the new equipment then read the comments on how we needed a new combine to harvest our 58.6 bu canola crop.
They start thinking that gee farmers are doing very well...new equipment, big yields etc. but statscan never asks how much money we owe just how much grain and assets we got.
Justin wants to show the world what a wonderful guy he is so starts making it rain for every left wing wet dream there is.
All of a sudden money man says we need more more more.....guess where it comes from? Doctors Farmers, Mom and pop businesses. income taxes, capital gains taxes carbon taxes, cpp taxes.inheritance taxes and on and on and on.
Its not going to stop till we can't borrow another single fracking penny...like it or not.

[bucket]

At current levels my farm would be worth more than I would have hoped to win on a lottery not too long ago....I really don't know what's wrong with me.....but if I wanted my kids to farm my lottery win would vanish.....lol.

[Flatlander]

Les Henry's land chart and the dot com stocks of late 1999 early 2000 have in common, that "blow off top" look to them if your asking me. Lift off is now vertical. Look ou below. Keep some of your powder dry, deals ahead. What goes around comes around. But if that certain piece of dirt comes up you have been waiting for you know what you have to do. Right?

[Bowerpower]

Buy buy buy...... As much as you can being comfortable in making the payments. Ask yourself this. Have you ever regretted buying land. I would prefer lower prices. I'm younger, want to build more acres. Land is necessary to farm. Priority one is having a land base to pass down to the next generation. Keep building it up. Land may plateau maybe even go down. I hope so, than l will buy more. Trouble is will what I want be available than. Who knows. Have no intention of ever selling. Pay for it once and move on.

[farmaholic]

For a very short time it may have - but land has never dropped over the term that matters, and it never will.

Agriculture is flush with cash, bursting at the seams with income to spend on all that extremely over sized ridiculously priced equipment that lasts even less hours then it did 20 years ago.

I bought dirt in 1986 for 64K.....the last land I bought in 2014......wait for it......65K.....thats a 28 year spread for ****'s sake.....and there was a time in there I wouldn't have got what I paid in 86.....too long a spread I might add. But it was never for sale so it didn't matter to ME. To some people it did.

Oh yea ....in 1986(the private sale) the same songs were sung about the land being too expensive as in 2014 at the land "auction" of the local BTO at the time.......

I had no competition in 86 but 2014 was one of those huge Hodgin's land auction cluster****s......anyone attend one of those? I stuck to the package I originally went for and was never "on" for more land than I wanted after someone else's bidding changed who was on what without someone who was out(all together or on certain parcels) actually placing another bid. The problems arose if someone bid on a bunch of different land and got out bid....then with all the combinations and.possibilities could end up getting more than he wanted. The breaking up of bidders packages or blocks caused the trouble. It was a gongshow!

[Partners]

Similar..1982 paid 100k for a 1/4...In 2012 paid a 100K for a similar 1/4...

Lately going around 300 k in this area...some even way higher...

[bucket]

Maybe some people are not seeing that grain is the same price as it was years ago....the math isn't making sense.....if it was keeping pace we would be getting 20 bucks a bushel for wheat 30 for canola and 45 for lentils....

[grefer]

Have I ever regretted buying a piece of land. Yup. 1981. I think the interest rate was 16 3/4 %. I still own it though but like others are saying in 1999 I bought the quarter beside it that is a better quarter for ten grand less than the one I purchased 18 years earlier. To me the crazy part though is the cost of new iron. If that isnt BS I have never seen anything that is. Land IS cheap when compared to that. Everyone loves it except the poor SOB who needs it to farm and in many cases cant afford to buy and so rents. Year after year after year. Guess who that works for?

[GDR]

Maybe some people are not seeing that grain is the same price as it was years ago....the math isn't making sense.....if it was keeping pace we would be getting 20 bucks a bushel for wheat 30 for canola and 45 for lentils....

Agree but worst part is I don't see prices getting better, more likely to decline. Yield trends have been at least keeping up to population growth and could be huge explosion in yields in South America and FSU as they get their shit together. Our freight and weather disadvantages won't get better. It's been good this year and recent years but when the world finds food alternatives to conventional ag look out.

[GDR]

Can ag survive a downturn? Look what happened to cattle during BSE, look at the field pea problem with India this fall, canola China dockage and blacking resistance the last couple years. All are no big deal cause they were one sector at a time. What happens when 2 or 3 trade issues happen at the same time and aren't resolved quickly. We need profitability but often cash flow more. Equity don't mean much when you got loans to repay and crop inputs to buy almost a year in advance these days.

Things are good right now and may continue but you just never know.

[farmaholic]

At 64 k in 86 and 65 k in 2014 looks like you really do farm in the slums !

# cheap and dirt poor out there !

I'm glad someone takes the time to read my posts.....

[farmaholic]

You want the neighbor lady to sell you land cheap so you can make a million off it !

CONNIVERS, CHISELERS, and WHINERS !

The sasktaxchewan way !

I'm glad someone takes the time to read my posts