Seeding Intentions?

[poorboy]

I think that $65/ac rent in the sure crop area (#1 soil) SE of Calgary is a bargain. Competition was slow in that area, it should have been much higher far earlier than it was. In the much drier and more variable yields to the east, the cash rents have been from $35-50/ac for years. It seems that as margins have got tighter a lot of farmers have tried renting more land and increasing their acres to hopefully make a living. More and more competition has raised rents.
The fact that land rents have finally gone up in the SE Calgary region has indicated to me that finally there is some competition. I think that compared to where I am at, that the rents in that area are going to go UP higher yet.
In comparing to the areas to the east, their is still more money left in your pocket on $65 rent in the higher yield areas that $40 rent in the poorer yielding areas. Input costs are almost identical (withing 5-10/ac).

[BFW]

I agree poorboy with your assessment that 65/acre se of calgary is a bargain compared to other areas. I thought that in year 2000 it was even more the case,when our exchange was more favourable,our costs were lower and feed prices were much higher in the drought years. So while I still agree with your initial statement I believe even top operators will be tight for margin at 65/acre going forward.

One more question, for Charlie, have you heard of any interest out there for new crop barley values and if so, what sort of farm gate value could you expect by selling 134/mt oct06 western barley futures?

[charliep]

Did some checking and no new crop bids although might be found with some door knocking. Only alternative is to hedge by selling futures. Would use traditional basis levels: $5 to $10 under Lethbridge region, $10 to $15 Calgary area, $15 to $20 Red Deer, etc.

[IAMTHEMOLE]

If you can sell those kind of levels, 134/mt oct06 futures less basis 13/mt Del, would net 2.63/bu, less 1% dockage. That kind of number can compete with current 05-06 malt barley pros. Why would a producer gamble on malt when that kind of feed price could be sold.

[IAMTHEMOLE]

I'm reading all of the comments above and am confused on how guys are saying that it is fine to pay $65 an acre and still plan to make money? I farm in central sk, and we farm some of the most highly assesed land in the province, in fact my local rm is supposed to be one of the most wealthiest rm's in the province, and land rent in this area is 40 tops and this year the farmers are falling over left and right. My inputs are at $165/acre, 100 bushel an acre barley at 1.60/bus doesn't cut, does it? We generally in this area grow 45-50bu canola this we had 60 but that doesn't happen every year. I just think it's kind of hypocritical to complain how tough it is, and then say $65/acre land is acceptable, if that is a bargain come out here to farm because there will be a ton of acres here that will not be farmed next year, I myself have been asked to take up to as much as 4000acres next year from neighbors, might take some but defintely not for 40/acre. Remember guys land prices are the only input we have control of.

[lakenheath]

Wow, one farmer with a brain. And others stating that land rent at $65.00 and acres is a bargain!!!??? Where the hell did you get your education from? A shoe box. Do you plan on writing a book call "How to Lose Money Even Faster". Some farmers are #$&*ing morons. Farmers are the sole driver of the price of land and land rent. Give your heads a shake. Crunch some numbers. Not, whine and cry about the state of agriculure and beg the government for money when you are paying $65.00 and acre for rent. Damn that is sickening.

[Cattleman]

I was rather shocked from the first posts in this thread as well. You can rent some very good land in our area, in north central Saskatchewan for $30/acre. Have a little more freight, and maybe some slight differences, but I doubt it is a $35 difference!!

[wmoebis]

So is the extra money that the Alta. producers get from saved freight, extra pym'ts etc. just getting past on to landlords. Not stopping at pimary producers.
If so what is this doing for the ag economy. I would think that a lot of it is paid back to the goverments in income taxes.

[charliep]

You have to look at the dynamics around Calgary that don't apply everywhere. An interesting factor that got the ball rolling to higher rental prices is cattle feeders bidding up land close to their lots for silage (within the 4 to 8 mile radius). Landlords took those values as reality and the benchmark for what they should be charging.

Good, bad or indifferent, Alberta land prices/rental is also higher than in Saskatchewan reflecting provincial government programs, access to off farm income and a hot economy contributing to higher land values. My comment is that land rent has stayed high. That has yet to be seen this year.

A comment I am getting is that there will be a lot of re-jigging as traditional renters give up some of their poorer quality/farther distance stuff and replace with land that has a better fit. Location is everything. Implications of some of the bigger operators either reducing size or not being able to farm will also impact rental prices - will vary community to community.

Didn't mean to take over the thread but rental is an early warning of things to come I use. Another I will watch is summerfallow (traditional or chem fallow).

[poorboy]

The land rent in the areas within 100 miles of Calgary are very competitive. The local feed market makes feed barley worth $2.10-2.20/bus picked up at the bin for good 2 row barley. Calgary area is tied for the lowest cost rail freight to Vancouver on the prairies. Total deductions, picked up on farm for CWB grains is in the $42-44/tonne range. And the biggest factor is huge oil and gas well drilling programs. Lots of initial cash and lots of annual rental.

All this together makes for a very competive land purchase and rental rates. Yes landlords do very well. Lots of landowners get between $40-100/acre from the gas well leases and land rental for agriculture.

There is NO land that comes up for rent. If you want to expand you either pay up when your neighbor comes to ask or you pass for 8-10 years until another parcel comes up for rent. This is for a 10 mile radius from home. Lots of land gets sold to either large farms or local hutterite colonies.

From where I farm, the $65/ac rent is a bargain compared to the $40/ac that I have to pay.

Not sure where the price of land or rent would have to be at in Sask to be comparable. The higher rail freight to the coast and the higher truck freight to the Alberta feedlots is such a big cost.

Last year for me the cost for chem,seed,fuel,fertilizer,machinery and crop/hail ins came to $120/acre. Add $40 rent is $160/ac. Crop of barley was 80 bus/ac @2.25/bushel to gross $180/ac. Only leaves $20/ac. Not sure how this compares to most areas.