Land Rent

[Ron]

Lakenheath, tooghgoofit
Here it goes, I have been farming 12 years, I have never had canola less than #2 (one year), my 5 year canola average is 45 bu/ac (including the drought and hail), 55 bushel red spring wheat here is a shitty crop, average is closer to 70, excellant is 90 (it is hard to get protein premiums with these yields though).
My reserve fund is I am a grain farmer, instead of curling all winter I go work in the patch if I have to. A good month I can make $10,000.
The cost of living on an extra quarter is $0.00, that is why it is an extra quarter, depreciation is the same per year, 600 acres or 1000 acres. You can buy a decent JD 7700, MF 860 etc for 10-20000. Who cares about depreciation on these things, repairs are cheap if you can work on your own equipment.
In central alberta we have very steady yield history, low freight rates, and oilfield options for work. I am sorry that in cigarette butt Saskatchewan you dont. Here we make $60 rent pay. I said before I dont like it, I would prefer $40/ac but I pay what the market demands.
Toughgoofit, sorry about the math error it was a quick post.
Dont assume your crappy freight rates, uncertain weather etc is everywhere. Here our problems are urban sprawl and whining acreage owners. Very high competition for land, If you dont want to pay $60/ac it is easy. DONT. Get a job and move to town because you wont have land to farm.

[Ron]

Cowman, what I meant about mineral rights is that your cousin is pulling big money from his oil rights. He is probably paying such a ridiculous amount because there is money in the oil side of it, and he's waiting for you to die then he can buy your land. Grainfarming itself will not work at 60-100/acre.

Lakenheath I was totally on board with everything you said except that crop share is the only way to go. I don't know what you pay for crop share, but I rent all my land cash rent. $32/acre.
Most guys here go 25% crop share 45bus/acre wheat*25% is 11.25bu/acre*3.50=40/acre cropshare in rent how is this better than cash rent.

[Ron]

Ron we all know that Alberta is the king of oil, the king of farming, the king of beef. I have cousins in Fort Mcleod, and pay your cheap rent at 60/acre have 500 head of beef pay your cheap freight have your excellent weather and just went into recievership.(sorry cous)

[bigred]

Ron,
You have made the best argument to prove that farming doesn't pay. You can earn $10000/month off farm to pay the expenses of the farm, what other business owner takes on an "off bussiness" job to pay the expenses. It just goes to show that you can't make it by farming alone. And on the note that an old combine has no depreciation, again what the heck are you saying, you have to make enough to replace it even if it is only $20000, that's still depreciation.
You would make better money to rent your land for the 40 or 60 an acre and work in the patch year round, you'd come out ahead.

[Ron]

Big Red, I started to answer your post but screw it.
You guys dont get the point. You pay what the market wants or you dont. It is your choice, rent the land or dont.

I think this is a dead issue and wont respond further

[Ron]

Ron, yeah we get the point Albertans can do nothing but make money with farming. All the power to you guys. I don't see why so many Albertans are bitching on this website about farming then.

[cowman]

Vader: You bring up a very good point about over production and I agree that is THE big problem. In this area, with the great weather, demand for feed grain is poor this year and is a real problem.
toughoofit: Not sure if $32 is enough for the land owner? Don't know what land prices are in your area? I do believe with a crop share you are spreading out your risk?
I know there is some very good land in Saskatchewan...the area around Lumsden comes to mind? A fairly close neighbor recently sold out and bought land (5000 acres) around Regina at a very decent price compared to here? I kind of wondered why he would do that but he felt he needed to double his land base if his kids were going to farm and it was impossible to do here. There are a lot of farmers/ranchers moving to Saskatchewan from Alberta.

[sawfly]

lets face it . we need some well heeled farmers around,from oil .old money or just blessed crop areas.
who else is gonna buy 300,000$ combines,tractors ,sprayers etc.
enableing the rest of us to pick them up years latter for 100,000$.
who else can come into our area and buy land to hold up land values,for us to retire on.
the rents have already fallen here from 28-40 down to 17-30 . some may rent at 15 this spring.
people arnt jumping at these rates.without being able to lock in any profitable prices.
why invest 100,000$ in rent and inputs,when an optimistic return looks like 110-125 thous. more realistic return is break even,and better than 50-50 chance,from poor prices,frost drought etc. your into losses,possibly huge.
you can take that kind of hit,if the bank account is flush,and the oil money flows,but for the rest of us its economic life or death.

[sawfly]

Cowman, I will be very interested to see how your neighbor makes out by Regina. I don't wish him bad but if the yields are as good as Ron says in Central Alberta your neighbor is going to get a bad suprise here because frost,drought, grasshoppers etc, are realistic problems.

Sawfly I agree with you, if it wasn't for these elite rich guys mabye the rest of us would die.

Vader I agree to some extent that we are over producing, but wheat stocks are going to be there lowest since 1981 in the world. I bet though the CWB new crop pros will not reflect this shortage. My bet new crop wheat stay the same as this year or slightly higher, but not in reality to what Kansas, and Minneapolis are trading at.

[lakenheath]

Ron, did you forget to metion you farm irragated land? If not you are full of shit.

I have lots of Ron's for neighbours in that sense also. Usually have to shave off 20%-25% of what they claim they yield. Or maybe they think their fields are a bit smaller than they really are and that dockage doesn't count against yield or that maybe their yield monitor is not calibrated.

[MBFarmer1]

Hey guys, definelty not piling on to Ron here but thought I might offer a word of caution. I farm in Southern Manitoba, am fourth generation on the same homestead. IN this areas crop failure is basically unheard of 50 bu canola is very common, 60 wheat, 80-90 barley. Due to the stability of the weather we do not carry excess crop insurance. In my dad's 38 years of farming we would never have qualified for a benfit so it seems a waste. We do carry hail ins as that is a problem. Land rent two years ago was about 75. In 2004 we seeded only 2/3 of our land. First time in our farm's history. Then got nailed with frost. Total disaster of a year. First one basically ever. Then last year seeded all land but onyl harvested about 1/2 due to excess moisture. Even worse disaster. If another bad years this year we will without a doubt go back to old school 1/3 summerfallow, 2/3 crop to reduce input costs. Land rent for this spring is about 35. The point I am making is that Ron says he never has crop failures and has a reserve built up etc. Two years ago I would have been right beside him saying exactly the saem thing. The one true master of farming, Mother Nature, has humbled me greatly.

[JD4ME]

Despite the fact I should leave this one alone the underlying truth to this thread is the land rent is a simple factor of free enterprise and economics of scale . In our area, land rent runs from 45-even up to 70 where the land is being rented by a feedlot where they are silaging the crop and using it to spread manure on. This is dryland, irrigated rates have been known to be higher. Do I wish it was lower? Heck yes, and it should be but is it going to be? perhaps marginally if the dollar continues to appreciate and the commodities depreciate further.
A few years back I had the pleasure to attend a meeting with farmers from all across the west at the time land was renting here for 45-55 and we had this same discussion one good fellow from around Humboldt was renting good land, all he could handle for 10. There are many factors that affect land value unfortunately not all of them are agricultural in nature. There have been people that have sold out and went into Sask, and some that thought about it, took a look around and realised their families wouldn't accept the transition. It's a long way from cutknife to costco if you follow my drift. IN central Iowa the rents are 200 an acre ,sometimes less sometimes more that's what people will pay there.
If it doesn't pencil to you to rent the land with the rental rates being paid in your area then don't. Sit back and wait, and if you're right and the guys that rent it are wrong you'll get a chance at a rate more to you're thinking. If youre wrong.........
Don't think this decision is just applicable to farming, Everyone else that runs a company from you to Walmart to General Electric is faced with these decisions. Go make them to the best of your management ability and for the best of your company that's all you can do.

[furrowtickler]

Have been reading this thread with interest.
MBfarmer: Our yeilds are 20% off yours and land is still renting /selling for $35/ac $90,000/1/4. Your sinario is very simular to ours,the last 5 years has humbled everone greatly to the control mother nature has in our lives.
Several Albertans have moved into this area over the past few years, hence land prices/rents are staying artificially high. These same Alberta guys are taking it on the chin now.
Cowman, "Is $35/ac enough for the land lord?" This atitude is going to swamp all young farmers. It is all relative to where you are, in our area landlords are in for a rude awakaning $35/ac is too high for the risk involved.
As far as the cash/cropshare rent thing, our most flexable rent is $15/ac and 10% crop share. Over the last 5 years we have paid anywhere from $18/ac to $38/ac. You should be paying 1/3 fert and fuel as well, your relative is foolish.
I agree with toughgo.. coming to Sask to farm cheap land/low rents is a vary false sense of security. Moving out of the promised land to the central praries ... take away 30-40% yeild potential add frost,dought, and horrible crop insurance coverages and they will be out just as fast as they come in.

[furrowtickler]

Mbfarmer, you make the point I was trying to make. I am in the same boat as you my Dad said after 03, and drought never has he had 2 bad years in a row, then came 04 frost, and now 05 bad grades shity prices. It does happen. Ron claims they are in a sure crop area. I do tend to believe your yields opposed to Ron becuase Manitoba is generally wet, Alberta is generally dry.

Jd4me, why are we constantly bitching about the CWB or the shity prices if people are still paying premium dollar for land. Personally if goverment officials were to read this I would be embarrased because we sound like a bunch of morons.

[JD4ME]

Why are you constantly bitching tough? Thats a good question, likely because of the same reason some teachers bitch and some truckers bitch and some doctors bitch. There's stress in every occupation even the homeless bitch and they dont have an occupation.

Deep down inside everyone who posts here on Agriville is aware of a few certain facts, farming will continue to evolve and change. It always has, it always will, the concern lurking in the back of everyones mind is if they truly believe in this industry and want to remain in it is "Am I doing what it's going to take to keep my operation viable into the future?"
We do not have a god given right to farm , no matter how many generations have farmed the land before you and despite the fact that it sucks, we all know a few of us won't be passing the farm on to the next generation. It's hell on our commnities and on ourselves at times but its how it was in the countries our families emmigrated from and it is here.

Bitching is normal, but if you want to survive don't think in terms of problems think in terms of solutions.
I always chuckle to myself when I post something on here and certain people have to point out why it won't work I wonder if they run their farms that way, our farm is and continues to be successful why? Because I don't look for problems I look for solutions, accept the fact though sometimes you might not like the answers that you find.