Canola price & land prices

[Ache4Acres]

So I keep hearing my neighbours getting excited to buy more land at any price. They keep citing $20+ canola and doing math on that.

Here is a 30y canola chart. Not sure I’d take the story of sustained $20 canola to the bank just yet.

[jazz]

I dont know whats going to happen to the canola acres. Even with $20 lots of guys wont grow it again in these conditions and with these input costs. And if those crushers get online in a few yrs or if biodiesel gets a kick. Who knows.

[GDR]

Unfortunately the overly optimistic will be the same ones looking for government handouts and complaining the economics of farming doesnt work in a very short time. As a group farmers do it to themselves over and over, greed and ego reigns supreme.

What good is high prices with low yields? One decent crop and we are back to worldwide surplus.

[AlbertaFarmer5]

Unfortunately the overly optimistic will be the same ones looking for government handouts and complaining the economics of farming doesnt work in a very short time. As a group farmers do it to themselves over and over, greed and ego reigns supreme.

What good is high prices with low yields? One decent crop and we are back to worldwide surplus.

And I'll ask, what good are high prices if nothing is for sale?

I've never been one to complain that the economics of farming doesn't work out. I keep the expense side of the sheet under control, assuming that the income side could and probably will be a disaster out of my control( weather), I budget income on historic normal grain prices, not the extremes. And using those numbers, I can pencil land at the values it last traded for in my area.

Except nothing that resembles farmable land has been for sale within 20 miles of here for the past year now. A few moose pastures, and a few with over priced mansions on them but even most of those sold in recent months.

Our county has been in the middle of proposing an almost anything goes policy for subdivisions, and I think all the potential vendors are waiting to see if they can sell 4 of 40 acre parcels instead of selling a full quarter before any decision is made, and risking that the buyer then splits it up. New council, now we get to start all over again with the process and delays.

[GDR]

I've never been one to complain that the economics of farming doesn't work out. I keep the expense side of the sheet under control, assuming that the income side could and probably will be a disaster out of my control( weather), I budget income on historic normal grain prices, not the extremes. And using those numbers, I can pencil land at the values it last traded for in my area.

Except nothing that resembles farmable land has been for sale within 20 miles of here for the past year now. A few moose pastures, and a few with over priced mansions on them but even most of those sold in recent months.

I would love to see those forcast numbers AF5 that pencil out land working, unless you are adding a 10% year over year asset value increase to the equation which may be valid but not really fair to the equation. Cant imagine your prices are much less than here, $6000 to $6500 an acre going rate. At 3% interest that's $180/ac just in interest without principal payments or production expenses, using long term yields and pricing that would be tough as a standalone purchase.

[AlbertaFarmer5]

I would love to see those forcast numbers AF5 that pencil out land working, unless you are adding a 10% year over year asset value increase to the equation which may be valid but not really fair to the equation. Cant imagine your prices are much less than here, $6000 to $6500 an acre going rate. At 3% interest that's $180/ac just in interest without principal payments or production expenses, using long term yields and pricing that would be tough as a standalone purchase.

As of last fall, when the last arms lenghth deals that I am aware of occurred, our prices were still half of your numbers. And I should add that there is a good reason your values are double ours, short cool growing season, soil, topographic limitations, distance to markets, etc. We really are on the very edge.

I never pencil any appreciation into land purchase numbers. That doesn't help me pay for it whatsoever.

The only quarter for sale anywhere right now that could generously be considered farmland is offered at 4250/acre. That includes many acres of genuine muskeg, and much of the rest would be too wet to farm on anything except an exceptionally dry year such as this. Probably not a coincidence that they decided to try to sell it this year... The others are almost entirely muskeg, probably the best possible year to try to sell them too.

[Ab7]

And I'll ask, what good are high prices if nothing is for sale?

I've never been one to complain that the economics of farming doesn't work out. I keep the expense side of the sheet under control, assuming that the income side could and probably will be a disaster out of my control( weather), I budget income on historic normal grain prices, not the extremes. And using those numbers, I can pencil land at the values it last traded for in my area.

Except nothing that resembles farmable land has been for sale within 20 miles of here for the past year now. A few moose pastures, and a few with over priced mansions on them but even most of those sold in recent months.

Our county has been in the middle of proposing an almost anything goes policy for subdivisions, and I think all the potential vendors are waiting to see if they can sell 4 of 40 acre parcels instead of selling a full quarter before any decision is made, and risking that the buyer then splits it up. New council, now we get to start all over again with the process and delays.

What county is that

[furrowtickler]

So I keep hearing my neighbours getting excited to buy more land at any price. They keep citing $20+ canola and doing math on that.

Here is a 30y canola chart. Not sure I’d take the story of sustained $20 canola to the bank just yet.

They will be as bankrupt as fast as the guys betting on 50 bus canola yields here , same stuff different pile

Good luck with 10 bus /ac canola next year

[4GFarms]

I don’t think guys worry about the next year. Land is trading at no where near affordable levels here unless you have financial backing. Numbers just don’t make sense especially with inputs prices where they are at. Kinda getting nervous for next year’s profitability and we are still 6 months from seeding

[BTO780]

I had a decent crop and I’m very concerned going into next yr. Buying land is the last thing on I my bucket list.
It amazes me how most of the province had basically well below average yield crops, with some basically zero and land buying is at the top of their agendas.

I’m sure cash rent rates will be going up due to commodity prices.

[quadtrac]

Well almost a year later now and what has changed?
Costs higher. Interest rates higher. Grain prices down somewhat.
And land is still yet higher.
What are are others seeing ?

[furrowtickler]

Well almost a year later now and what has changed?
Costs higher. Interest rates higher. Grain prices down somewhat.
And land is still yet higher.
What are are others seeing ?

Scared to ask