Crop Share vs Cash Rent

[flea beetle]

That is why I’m apprehensive. No way to know where this is going. Could be a gravy train for the next 3-5 years, or could be just barely scraping by for the next 10 once the tide shifts. Usually I have a gut instinct which way to go, but I’m lost right now.

[Grahamp]

My practice now is 50% or greater cash down. Buying a little land, but unless I can put more than half down without affecting the operation I am passing.

[jazz]

Some marginal land in the dry zone in sask has sold upwards of $2000 per acre. Feels very toppy. Isnt a crop you can grow that will pay that debt in those areas. Maybe buying cash is ok and if it fits in well with the operation, but I wouldnt take on a loan for it now. Rates are 7% for farmland.

What should be noted is that a lot of land specuvestors who dont farm have already sold out and taken their money and ran.

[SWFarmer]

Some marginal land in the dry zone in sask has sold upwards of $2000 per acre. Feels very toppy. Isnt a crop you can grow that will pay that debt in those areas. Maybe buying cash is ok and if it fits in well with the operation, but I wouldnt take on a loan for it now. Rates are 7% for farmland.

What should be noted is that a lot of land specuvestors who dont farm have already sold out and taken their money and ran.

Also quite a few investors that have bought more in the past year.

Avenue living bought the remaining farmland that was owned by CPPIB.

Pattison bought about 8,500 acres around lake diefenbaker

Andjelic has bought quite a few farms lately, most recent one was 30+ quarters in WC sask.

I am sure that there are quite a few others that are as well because land is seem as a reasonable inflation hedge by investor types

[AlbertaFarmer5]

Also quite a few investors that have bought more in the past year.

Avenue living bought the remaining farmland that was owned by CPPIB.

Pattison bought about 8,500 acres around lake diefenbaker

Andjelic has bought quite a few farms lately, most recent one was 30+ quarters in WC sask.

I am sure that there are quite a few others that are as well because land is seem as a reasonable inflation hedge by investor types

So let me make sure I have this right. Canada pension plan was selling farmland. Meanwhile Ontario teachers pension plan was investing in crypto?

I think if I were a public sector employee looking forward to retirement, I would take matters into my own hands. Not that they have that option.

[SWFarmer]

So let me make sure I have this right. Canada pension plan was selling farmland. Meanwhile Ontario teachers pension plan was investing in crypto?

I think if I were a public sector employee looking forward to retirement, I would take matters into my own hands. Not that they have that option.

Yeah, the CPPIB no longer owns any land in Saskatchewan. They sold roughly half of the Assiniboia FLP land they acquired to various farms and investors (Monette, Delage, C2 Farms, Andjelic, etc) throughout 2021 and 2022 and then sold the remaining land to Avenue Living in April 2022.

[SWFarmer]

Who is Avenue Living ?

https://www.avenuelivingam.com/fund/agricultural-land-trust/

[blackpowder]

I understand why certain regions of the prairies were ripe for large investors.
But is there a price point where it's not so lucrative? Touted 14% returns can't last?

[Grahamp]

Going to be interesting. I just don’t see new investors joining the party in this new interest rate environment. Maybe existing ones keep adding , but you can now get over 5% at our local credit union. Why buy land at 2.5-3% when you get almost double that at the bank.

Not that my opinion matters but I have always been bullish land and have laughed to myself at the generally negative coffee row type farmer who proclaims that land is “too high and going to crash.” They said this at 100k quarters, 200k quarters, 300k quarters and I always thought they just don’t understand the long term potential of land. I have always bought what I could afford which unfortunately wasn’t enough. But as of the last few weeks I think I am moving to neutral from wildly bullish on farmland. It’s just too high and there are now too many opportunities that provide better returns. I think it is time to be careful.

[quadtrac]

For the ones that are thinking of selling there are many that want to buy.
Sure interest rates are up some and that’ll slow a few down but most have cash and aren’t that worried about short term ROI.
Many farmers have done well the last decade and are wanting to add land.