90,000 acre organic farm

[Klause]

Robert Andjelic has a new pet project...



Turning poor grassland into organic farmland and growing crops south of Yorkton towards Whitewood.

[furrowtickler]

Is he going to supply organic peas to James Cameron’s pet project??

[chuckChuck]

https://www.producer.com/2014/12/saskatchewan-farmland-attracts-outside-interest/

Saskatchewan farmland attracts outside interest
By Dan Yates
Published: December 4, 2014

New players | Researchers say nearly 800,000 acres are owned by out-of-province investors

A former Manitoba businessperson who now resides in Alberta has taken a major interest in Saskatchewan.

Robert Andjelic said his portfolio of Saskatchewan farmland has grown to 180,000 acres over the past four years.

“I’ve been studying the market for a lot longer,” said Andjelic, who previously owned industrial warehousing.

“I got bored with retirement and looked at other opportunities, and farmland presented itself as one of the best.”

Andjelic is emblematic of a new breed of landowner in the province: out-of-province investors, companies and pension funds who have made major investments in the province. The province has recently seen significant year-over-year gains in farmland values, but prices remain among the lowest in the country.

“I find Saskatchewan farmland to be very diverse in production and really about the best buy in the country,” said Andjelic.

Researchers surveying Saskatchewan land titles believe close to 800,000 acres are owned by out-of-province investors. Their tally puts Andjelic’s holdings at more than 160,000 acres, although Andjelic said it’s actually more.

They also count large portfolios of more than 100,000 acres owned by the Canada Pension Plan and HCI Ventures, as well as smaller holdings owned by host of other firms and familiar names, including Nilsson Bros. and Brett Wilson’s Prairie Merchant Corp.

Andre Magnan, a researcher from the University of Regina and one of the authors of the upcoming study, said their total doesn’t count larger family owned operations and Hutterite colonies.

“Family ownership is by far the dominant model of ownership that we’ve still got in Saskatchewan, as it is all across Canada, but things are changing” said Magnan.

“These new entities, they’re changing the fabric of how we think about farmland and how it’s owned and controlled.”

Magnan expects their research to be published in the new year, but details of the project were presented last week at the National Farmers Union convention in Saskatoon.

“We can’t say for sure when most of the activity happened. From some of the research I’ve done, I think it’d be fair to say a lot of this has happened since 2007,” said Magnan.

They are surveying 20 years of data but point to changes in landowner restrictions in 2002 as the launching point of the new landscape.

The researchers count almost 60,000 acres of investor-owned land in 2014 across the rural municipalities of Excel, Lajord and Harris. There were less than 3,200 acres 20 years ago.

Presenters at the NFU meeting raised concerns about this kind of ownership concentration, its role in escalating land prices and its effect on rural communities and farming practices.

“Saskatchewan people owned the land of Saskatchewan and when they changed the law, they set the stage for divestment and that’s what we’re seeing,” said Darrin Qualman, former NFU director of research who is also working on the project.

“We’re seeing Saskatchewan farm families divesting ownership of the province to very large, very powerful $100 million, billion dollar entities.”

Andjelic said most of his acres are farmed under cash rent deals. It’s all cropland, spanning from the U.S. border to Prince Albert. About 35,000 acres are farmed under crop sharing arrangements.

“We do joint ventures with young, progressive farmers that have the equipment,” he said.

“They put in their own land and we add our land and then I pay for most of the inputs and they pay for most of the equipment and they do the actual farming operation.”

The researchers listed Andjelic’s portfolio as the largest in the province. The second belongs to the Canada Pension Plan, which acquired the land from the investment group Assiniboia Farmland in 2013 in a $128 million deal.

Agricultural economist Ken Rosaasen said farmers and pension plans aren’t on an even playing field: farmers buy land with after tax income and pension funds make acquisitions with capital from pre-tax income.

“Any time you have a playing field that’s on tilt to that degree, it means we’re going to be shifting to investment, RRSP-owned land not owned by the farmer or people close to the community,” he said.

Rosaasen also raised concerns about larger operations owned by investors that aren’t able to balance a downturn in commodity prices or production with off-farm income.

It has been a hot button topic in the province since large, corporate farming operations such as One Earth Farms began leaving the sector and Broadacre Agriculture recently entered creditor protection.

“Family farms have certainly gotten a lot bigger, but they’re invested in the success of that operation in a different way,” said Magnan.

“They do things differently and they have less overhead and they can be a lot more efficient and leaner … than some of the big corporate outfits.”

Andjelic is listed among the Broadacre creditors.

“They had a different business model. Everybody has a different business model,” he said.

“It’s not the one I believe in. I believe in drawing in young farmers that are very good producers and very good businesspeople — honest, hardworking.… That works out very well for us.”

[Robertbarlage]

there is a reason why it's grass they are going to find out.

[furrowtickler]

Hmmm , why did our ancestors leave Europe again ????
If you are young and smart why would you work hard on a farm for someone else’s benefit ? Renting land is a zero sum game . There is not enough money to be made to make both parties any real wealth. Especially if you throw in weather and market risk .
I guess one hopes to make a living is all if your renting from this situation. You are certainly are never going to create your own wealth.

[ajl]

This will be funny, watching a rich guy become a poor guy. Farming big in western Canuckistan has a 100% failure rate so why does it get tried over and over again. I know of one of Charlie Noble's grandsons. Noble farmed some 30000 acres back in Soutern AB in the 1920's. Nothing is left of that farm today. Cameron colony farms a lot of that land today. As interest rates continue to rise, many large operators of today will rapidly disappear and that will include some colonies this time around. I am expecting rates of 5.5-6% will do that, no where near the 15-22% of 1981. Canuckistan will not survive 6% let alone 18% now. The model of farming today is created from cheap debt and nothing else.

[farmaholic]

Hmmm , why did our ancestors leave Europe again ????
If you are young and smart why would you work hard on a farm for someone else’s benefit ? Renting land is a zero sum game . There is not enough money to be made to make both parties any real wealth. Especially if you throw in weather and market risk .
I guess one hopes to make a living is all if your renting from this situation. You are certainly are never going to create your own wealth.

I only rent a very very small amount of land..... inconsequential, a chunk cut off by the highway that is just attached to some of our own land. And hardly worth talking about. But the rental rate nearly doubled in one year! But the point I want to make is if it was even a full quarter, yes it is no where near a full quarter, I would seriously think about giving it back. Is it fair that the landlord will make as much if not more(some years) as the tenant who carries all the risk and does all the work?

There is real need for a RESET. When "investors" can buy land and rent it out at a ROI they find acceptable.... maybe rent is too high. And in the meantime the land prices have spiked out of reach of the area young men and women who would like to farm. I'm in this for the long haul and grumpy.... part of me is thinking I would like to see a crash. Take less rent, farm it yourself, rent it for taxes, or pay someone to farm it, or sell the ****ing stuff to real farmers.... **** off!

[blackpowder]

I agree with farma. But my question is for our esteemed NFU participants.
Do you think having a Sask resident only law for ownership led to this in part?
Artificially depressed prices for too long led to a vacuum that was all too quickly filled by those with enough cash?
Gosh, I remember neighbours rushing in to Sask to buy land at obviously too cheap values.
We dont seem to have this problem in AB.
Blame the market for $5000 land if you will, but 180,000 ac investor owners are the Sask govts doing.

[Klause]

Frost/wind/rain (too much/little)/short season.

I think $100,000 a quarter is a fair valuation for land "here". Its now close to 5 times that.


Investors have long since run and hid... They bought up to about $1500/acre range, and quit. It's been all local demand that keeps driving it now, to what end, who knows?


Organics have a better profit margin, but the problem there is it requires intensive management... livestock... and good land...

[sk_wheatking]

Frost/wind/rain (too much/little)/short season.

I think $100,000 a quarter is a fair valuation for land "here". Its now close to 5 times that.


Investors have long since run and hid... They bought up to about $1500/acre range, and quit. It's been all local demand that keeps driving it now, to what end, who knows?


Organics have a better profit margin, but the problem there is it requires intensive management... livestock... and good land...

You think 160 acres of planet earth of any kind is worth 100 grand max. You must really be pissed off at the 100G plus tax for a diesel truck. You can still get a gas unit for under 80,000 though. Just think it 5 years that truck is worth what you paid or maybe more!!! The land will depreciate to **** all. Or just a minute maybe that's the other way around....like they say here on agriville....pass the whiskey.

[TSIPP]

Lots of Indian land north of whitewood!

[farmaholic]

If you wanted to buy a chunk of dirt close to you, you decide how big a chunk is,.....in this market, how much can you afford to be "wrong" on? It took the current prices to pry land out of tight hands....but do you want to be wrong on a bunch of it? A little maybe?

I hate the word greed but it's starting to look like.....

Don't buy, don't rent,????? We all have the option to decide to pay to play or watch from the sidelines.

[bgmb]

Well this should be a good sign. We all know the fantastic track record of the mega corporate farm in saskatchewan. I think don gillen already tried grain farming that land 10-15 years ago. Google don gillen farm Klause maybe before your time

[bgmb]

Heres a quesrion for organic guys. How are he cert agencies going to crack down on the guys who grow 1 quarter of organic wheat amd sell 5 quarters of organic wheat? Or do they care? Cause the buyers certainly dont. And I am talking certified organic not just deciding to skip spray and fertilizer for a year.

[agstar77]

Let us hope this expands to all Sask. There will be no more overproduction.