Calling the top in farmland right here

[GALAXIE500]

It gets sickening on here with the land is going to crash threads. No other business Hope's for a disaster on their biggest asset's. But hey I'll take a new 1 ton diesel for a hundred grand and a new sled for 16,000. What a great deal. Wake the **** up already.

Sask Wheatking you hit the nail on the head

[checking]

Since monkeys have been known to throw shit, I will miss vvalk's insight for at least a week.

I admit that I'm slow on the uptake.

Canadian cash is worthless. Don't put it in a bank because Stat's Can will know where you purchased useless products, like land, with that useless Canadian cash. Oil in the ground drives land prices. Canada can't compete with the world because of JT's bong smoke. Now that I understand, for goodness sake, please don't add anymore.

[the big wheel]

On your comment about "safe in a bank" whats your thoughts on Stats Can getting all your transactions from your bank?

I think that's absolutely bullshit!! What the hell is it their business if I eat at mcdonalds or Burger King?

[poorboy]

Saskatchewan changing its land ownership laws is the major reason for the large rallies in farmland prices. Open ownership laws also helps stabilize the current higher values. Land prices in Alberta have been very high compared to farming economics for the last 50 years. Doesn't seem to adjust down much even when the farm economy sucks. Don't see prices dropping much in Saskatchewan either now that the doors are wide open. Land prices were way too affordable for way too long in Saskatchewan as compared to other places. Makes it tougher to afford, but stable high land prices keep creditors much happier.

[bucket]

Saskatchewan changing its land ownership laws is the major reason for the large rallies in farmland prices. Open ownership laws also helps stabilize the current higher values. Land prices in Alberta have been very high compared to farming economics for the last 50 years. Doesn't seem to adjust down much even when the farm economy sucks. Don't see prices dropping much in Saskatchewan either now that the doors are wide open. Land prices were way too affordable for way too long in Saskatchewan as compared to other places. Makes it tougher to afford, but stable high land prices keep creditors much happier.

When Albertans get here and see the rail freight bill from midpoint Saskatchewan. ...the value starts to diminish....every 1000 acres it's 20000 more freight in Saskatchewan ...so over a decade it's a good deal of money

[iceman]

I wonder if it’s mostly the current available of credit that is fueling a lot of this asset prices. Ie land, iron etc etc.

A person should leave emotion out of it and make decisions based solely from a business perspective. Very hard to do though in a bull market

[bucket]

I wonder if it’s mostly the current available of credit that is fueling a lot of this asset prices. Ie land, iron etc etc.

A person should leave emotion out of it and make decisions based solely from a business perspective. Very hard to do though in a bull market

If it was a business decision ....if you bought land at 70k and it's now worth 250k....the business decision is to take the money....

[bucket]

I wonder if it’s mostly the current available of credit that is fueling a lot of this asset prices. Ie land, iron etc etc.

A person should leave emotion out of it and make decisions based solely from a business perspective. Very hard to do though in a bull market

If it was a business decision ....if you bought land at 70k and it's now worth 250k....the business decision is to take the money....

[checking]

This is why oil leases and farming land don't mix, and why the first detracts in this area from land value.

A quarter with four to five single surface leases comes on the market. The cumulative annual lease payments are $15,000/year. As a potential buyer of this land you will have to pony up five to six times the annual lease payments, around $90,000.00, plus what you consider a diminished quarter is worth to you as you will be farming little of a typical 3.5 acre surface lease which includes the lease road (subtract 10-12 acres on a good year).

Granted in eight to nine years, your principal outlay will be returned to you, less if you don't value its investment worth, and if you feel lucky. The lease could become orphaned before payback, or god forbid the oil company abandons the down hole, reclaims the surface, and your annual rent goes to zero, before pay back.

Factor in that these earlier taken leases were often chosen for their high ground position that could leave you with a lot of cut offs due to knob and kettle topography you may have purchased. There is also that dreaded weather that easily tops those stupid berms that oil companies have to construct around each lease. Now, they don't berm the whole surface lease, just enough to accommodate a service rig. The rest of the equipment is usually parked on their lease that you had the choice to farm, but not necessarily the right to harvest. You have already been lease paid. Those berms antagonize the lease mower, and often breach to flood out twice the crop as the size of the lease. Please, someone fill in the missing pieces. There are many, even some on the flip side that must exist in big wheel country.

[furrowtickler]

In the depression, Canada was not a major world supplier and only had one crop and real ag teach yet.

In the 1980s, that crash was due to a confluence of events in the financial markets.

I think the business is more resilient now even if there are less farmers.

I have 2 neighbors who have aggressively expanded recently buying $4000 per ac land and paying a premium on rent to knock some long terms guys off some rented land.

There was a few of those here too , they are now bankrupt.... they were some of the first ones here to start the chase the ace game , ran land rents up for everyone else now they are gone and the fallout is continued high rents that leave the rest of us scrambling. It is what it is , but put a pencil to paper for 2 min ... it’s getging to be a zero sum game for those taking 100% if the risk growing the crops .
Should land crash ? Not at all , it’s a huge value to all of us , but the limit is being pushed very far with the current commodities we grow and Mother Nature taking her share as well . We can’t all grow marijuana to justify it .
Good luck to all , but when everyone else makes more than the primary producer , well , something will give sooner or later.
Sounds like some have literally bet the farm on forever increasing land values at the current pace of the past 10 years , will be interesting to see how that ends up. Might be a good bet or not who knows.

[Taiga]

Not surprised you have no response!
Ya oil companies moving in sure does drop those land prices. I mean who wants 15,000. A quarter for nothing. Hahahaha
Have another puff.

Yep, take your $15,000, lose 25acres out of your quarter to a multiwell pad with 16 wellheads and facilities. Of course add in two years of non stop heavy traffic while it is drilled and completed.

Yes these current multiwell pads are 20-30ac in size. Just the pad, plus road. Think about how big that is! No more teardrop access just around a wellhead and riser while you still farm the rest.

Now you have a heavy industrial site on your property. Who values the highest $/Ac for land? Farmers? Nope, residential value. Now your property is worth zero to those potential buyers. And they didn’t care about number of cultivated acres, those rock outcrops, that wetland. That is what gave your property that ‘rural home appeal’. But, they don’t want to live next to that heavy industrial site.

Now the land is only worth its cultivated value, and only to a handful of local farmers. And now the farmers deal with the weed infestations, the garbage, the traffic, the spills. Life is great. And all that money.

Please send me your address so all the oil companies that I take to the Surface Rights Board and arbitration, where I always win, I can send them over to your place. They love dealing with suckers like you and they can pay you pennies for your diminished land value while you think you are cashing in. Have another puff buddy.

[the big wheel]

Yep, take your $15,000, lose 25acres out of your quarter to a multiwell pad with 16 wellheads and facilities. Of course add in two years of non stop heavy traffic while it is drilled and completed.

Now you have a heavy industrial site on your property. Who values the highest $/Ac for land? Farmers? Nope, residential value. Now your property is worth zero to those potential buyers. And they didn’t care about number of cultivated acres, those rock outcrops, that wetland. That is what gave your property that ‘rural home appeal’. But, they don’t want to live next to that heavy industrial site.

Now the land is only worth its cultivated value, and only to a handful of local farmers. And now the farmers deal with the weed infestations, the garbage, the traffic, the spills. Life is great. And all that money.

Please send me your address so all the oil companies that I take to the Surface Rights Board and arbitration, where I always win, I can send them over to your place. They love dealing with suckers like you and they can pay you pennies for your diminished land value while you think you are cashing in. Have another puff buddy.

Hahahahaha
Let's see I ve never needed to go to any board but sounds like you live there because you never read trumps book on the art of the deal before you signed up with the oil companies and I m the sucker? Hahahahahaha

If you can't make 100 bucks an acre right off the top before you put seed in the ground work then likely farming isn't for you maybe start a consulting firm on how to sue the oil companies sounds like that might be the one thing you yiur good at. Hahahahaha

Oil companies deal differently with whiners and panzis then those that keep things up and up day one.

Have a great puff!!

[helmsdale]

Short of a major liquidity crunch in the broader market forcing investors to realize the cash value of their assets to cover other positions, I find it more likely land values will simply stall.

Only other thing I could see is if there were no willing renters. Lots of operators struggle to effectively manage what they have now around here, but if someone shook another 1000ac in front of them they'd think it a no brainer to take on more acres to spread their costs out further... so until some sanity is injected into the world of greed, I don't really see this as a distinct possibility.

[Ache4Acres]

Saskatchewan changing its land ownership laws is the major reason for the large rallies in farmland prices. Open ownership laws also helps stabilize the current higher values. Land prices in Alberta have been very high compared to farming economics for the last 50 years. Doesn't seem to adjust down much even when the farm economy sucks. Don't see prices dropping much in Saskatchewan either now that the doors are wide open. Land prices were way too affordable for way too long in Saskatchewan as compared to other places. Makes it tougher to afford, but stable high land prices keep creditors much happier.

Sask land ownership is not wide open. Canada only. Sure there are creative ways that few find around that, but foreign money goes outside the prairies

[checking]

Sorry big wheel, should have asked you what you are giving up for that 15 G annual payment.

Here, no one gets $15,000 for a 4 well pad which is what is needed to drill out a quarter section. Perhaps you were talking a 20 acre pad with 16 wells as taiga mentions, and then I consider you are seriously getting shafted by accepting $15,000. Single independent leases of 4 wells, here, yes $15,000 is very possible. For a 4 well pad, though, you had better be holding a seismic access card back, and a number of critical quarters of ownership that they desperately need information on for a best well chance drill for them. You can then hold firm that you will not accept pad money of $750.00/additional well drilled beyond the first well. Or, you can tell them that you are not interested in anything except independent one well/lease money, go away, or anything in between. That doesn't mean they will go away. They may decide to gamble drilling off of well control, if it exists, or throw down enough verticals to achieve well control.

Typical four well pad, first well to establish annual lease is $2100.00, plus $350.00/acre loss of use. First well takes a 120 X 120 meter lease to accommodate everything needed to drill a horizontal well. All additional expanded wells only take a part of an acre, or an acre as they use a lot of the first well lease.

Worst thing going is "land sterilization". That is what oil companies call buffer zones around their pads. Pads limit surface area damage. You get to farm more, but pads limit what you can do with your land, besides farming it. Each pad come with a satellite testing facility, usually on a skid. Sk. government wants to know exactly what volume of fluid, and gas comes out of each well. Have one of those suckers, and you can kiss off a 500 meter zone around the pad. Worse, these things can be on a pad right up against your property. You get zero dollars, and they have effectively sterilized your subdivision potential, and your development potential.

$15,000/year to zero dollars just doesn't seem enough to want to be around oil. Something like that cost to benefit ratio you should all be up in arms against.