Acreages/Land... Full Retard?

[grassfarmer]

I know a family that bought a similar size, similar type farm to that one I posted back in 1960. They paid the equiv. of $86,000 for it at today's exchange rate and everyone said they were crazy that it would never be paid for. Same family farming for generations before and generations since - life goes on. $86,000 to $5.39 million is quite the climb - and we never had a big reversal in values in the 1980s like you apparently had in Canada.

[farmaholic]

Yes the Saskatchewan Farm Security Act im very familiar. Its a good read, yes there is bankruptcy protection but no protection from expropriation for greater good. If interest rates and commodity prices keep on the same path I assure you land prices will fall. In 1929 land prices fell 80% nearly overnight.

It can't happen and never will because some people said so.

Dripping with sarcasm.

What's different this time than the other times when land prices fell substantially? What factor exists this time that would prevent land prices from collapsing?

Buying in a falling market....
If you want more land and prices have topped out...if what you want comes up for sale do you buy it? Do you wait for it to soften? If it starts collapsing do you wait it out(don't try to catch the falling knife) or wait for it to bottom. No one really knows when the bottom is in until land prices start trending up and that could take years to establish....

No one really wants to buy at or near a peak but if its the right stuff and if you can swing it and are in it for the long haul does it matter?

[farmaholic]

I'm pretty sure everyone has seen this at one time or another. But a more up to date one would be interesting, 101 you got anything?

Is FCC still bullish?

Edit in...that parabolic line looks precarious

[ajl]

I know a family that bought a similar size, similar type farm to that one I posted back in 1960. They paid the equiv. of $86,000 for it at today's exchange rate and everyone said they were crazy that it would never be paid for. Same family farming for generations before and generations since - life goes on. $86,000 to $5.39 million is quite the climb - and we never had a big reversal in values in the 1980s like you apparently had in Canada.

EU subsidies were really getting going in the 80's which prevented the blood letting there that occurred here in the 1980's. This is one reason why Sk was hit harder than AB. More subsidies in AB in those days like the tripartite program for livestock. One thing different this time is that in the mid eighties and later, there was a lot of good off farm jobs available especially in central Canada, which resulted in there being no interest in farm ground. Today off farm opportunities do not exist so here won't be the exodus from the farm by milllenials this crisis but a hanging on to the bitter end.

[farming101]

+7.5% in 2016
+10.2% in 2017

Mistake: it was 7.5% not 9.4% in 2016 Corrected...

[farmaholic]

+9.4% in 2016
+10.2% in 2017

Those numbers must pretty much mean an extension of the line on the same trajectory!

I've been wrong ALL THE WAY up!

[Klause]

EU subsidies were really getting going in the 80's which prevented the blood letting there that occurred here in the 1980's. This is one reason why Sk was hit harder than AB. More subsidies in AB in those days like the tripartite program for livestock. One thing different this time is that in the mid eighties and later, there was a lot of good off farm jobs available especially in central Canada, which resulted in there being no interest in farm ground. Today off farm opportunities do not exist so here won't be the exodus from the farm by milllenials this crisis but a hanging on to the bitter end.

I have a few friends who are mechanics, machinists, and electrical engineers plus farm. They are really questioning why farm...

Lots of good opportunity. Today, it's just not in central Canada it's in the US, Azerbaijan, and Brazil.


Companies are global and they take their employees wherever needed.

[grassfarmer]

EU subsidies were really getting going in the 80's which prevented the blood letting there that occurred here in the 1980's.

You're partly right there. Subsidies got going well immediately post WW2 but farm profitability was good then also - the 1950s were the golden age for farm profitability in Britain. By the 80's subsidies were increasing but they were also providing about half the farm income. Subsidies have plateaued or maybe even declined slightly since but farms are more dependant on them. Some categories (like hill sheep farms) only 10-14% make a profit without subsidies. I think overall on all farm types it's only in the 40's % range that are profitable without subsidies on an average year.
Yet land prices continue to increase and they are mostly driving about in new tractors. Makes no sense to me.

[highwayman]

Most land but not all in this area is being purchased by buyers with many more resources than most had in the 80s such as thousands of acres of paid for land and those buyers seem to be willing to leverage their equity position to a certain degree. My first offer to purchase on 800 acres at 425/acre in 1981 was rejected by the vendor only to see the same land sell for 300/acre 8 years later as prices trended down. Today ,10 year money locked in at 4-4.5 % is still largely driving the market IMO. Pulse markets showing some life is also a factor here. Top quality dirt is still highly sought after here as values have slowed down some but still increaseing

[SWFarmer]

19 quarters near Edgeley just sold for $10 250 000. Quite a high price in my opinion.

[hobbyfrmr]

Most land but not all in this area is being purchased by buyers with many more resources than most had in the 80s such as thousands of acres of paid for land and those buyers seem to be willing to leverage their equity position to a certain degree. My first offer to purchase on 800 acres at 425/acre in 1981 was rejected by the vendor only to see the same land sell for 300/acre 8 years later as prices trended down. Today ,10 year money locked in at 4-4.5 % is still largely driving the market IMO. Pulse markets showing some life is also a factor here. Top quality dirt is still highly sought after here as values have slowed down some but still increaseing

Same thing around here. Leveraging “land for land” has been a successful strategy for exponential growth for at least a decade. Add the 200-400% increase in land values and there are some very well heeled farms. There is plenty of room to borrow even more money against the lands updated values.
The only black swan event I would guess at is the “clubroot effect”. If clubroot were to get established, canola rotations would be scaled back where a farmer would have to rely more on wheat and pulse acres to cash flow the farm operation.

[farmaholic]

I think this thread should all lead back to a question, "at current values how good of an investment is it if it can't pay for itself and has to be excessively subsidized with excess cash or paid for land's production"?

Some of the forces driving Sask land values, particularily Investors either on their own or through farming corps, may not(actually probably don't) care about it "paying for itself" or "making a living" on/with it. How do "regular" farmers compete with that mentality, yup...like the tread title stated, FULL RETARD"!!!!