Your farm is worth less than you think.

[GDR]

I think if I was in an area paying 5k per cultivated acre I’d consider selling some and buying 3x the acres in an area where you can pay 1200-1500.

Could be opportunities but do you not think the cheaper areas are cheaper for a reason? Could get yourself in a worse position. Are they cheaper because they net less or is it because of other less appealing factors such as location, future potential, climate? It is too bad its not all the same but modern farming has narrowed the gap a bunch.

[farmaholic]

In some cases farmers have to stop thinking land only has agricultural value.

Acreage potential.
Easement potential
Urban development
Aggregate potential
Speculative potential

"Agriculturally", land's ability to pay for itself hasn't kept pace with the parabolic appreciation in land prices some places, while others were already at that stage.

That's what alot of loose cash sloshing around looking for a home can do.

[Oliver88]

Could be opportunities but do you not think the cheaper areas are cheaper for a reason? Could get yourself in a worse position. Are they cheaper because they net less or is it because of other less appealing factors such as location, future potential, climate? It is too bad its not all the same but modern farming has narrowed the gap a bunch.

It would depend on the example. The example discussed above has Ab7 mentioning he can’t buy a quarter of land for $750,000 in central AB. I’m assuming the factors listed are all factors building this land price.
He can’t expand because a section is $3million. There is a lot of areas where farmland is priced significantly lower than this level and is quality land but will be further from a major city, etc.

[Horse]

I left the county or red deer in 73 land was $200/acre some with livable buildings some bare land I,didnt see any way to pay for it,bought here nw edmonton $40/acre now probably 1400 to 2000/acre 4000% increase.
RedDeer would need over $8000/acre to compare to this land,for inflation of course reddeer land is better land by far.

[ajl]

I left the county or red deer in 73 land was $200/acre some with livable buildings some bare land I,didnt see any way to pay for it,bought here nw edmonton $40/acre now probably 1400 to 2000/acre 4000% increase.
RedDeer would need over $8000/acre to compare to this land,for inflation of course reddeer land is better land by far.

If you can actually get that for boonyville, is it not time to put somebody else's name on some parcels? Mediocre land is on its way down. I am a nobody and am picking up rental ground now so will be seeding some more land in the spring. Have to be careful to keep rent down so that the operator makes some money though.

[farmaholic]

Its only going one way.....





Sarcasm???,

[quadtrac]

Down? Why?
Grain prices better than they’ve been again in years.
Nothing else stable to invest in. Think some are dreaming if they think good grain land is going to drop anytime soon.
I’d bet on a big increase before a decrease anytime soon.
Of course that’s an opinion that is worth what it cost....

[bucket]

Do the indexing of equipment cost versus the index of grain from let's say 1975...

We are not gaining...

Combine in 1975 - 36000
Combine in 2020 - 600000

Wheat in 1975 ....$5.00
Wheat in 2020. ...$6.00

36000 indexed 174500
5 dollars indexed 24.75

[AlbertaFarmer5]

Down? Why?
Grain prices better than they’ve been again in years.
Nothing else stable to invest in. Think some are dreaming if they think good grain land is going to drop anytime soon.
I’d bet on a big increase before a decrease anytime soon.
Of course that’s an opinion that is worth what it cost....

The bolded words are probably key.

Around here, land prices were artificially high compared to their productive potential due to outside money. People wanting quarter section farms, weekend place, investment, place for hunting, quading etc. That casued recreational land to sell higher then agricultural land.

Their money tree dried up along with the price of oil. The premium seems to have gone the other way again.