50 year farm mortgage would it be insane or logical for farm families?

[westernvicki]

The increase in Capital gains tax will be a huge disincentive to investors in capital in Canada.

But particularly for farmers due to aging demographics which will add more inventory to sales, high interest rates in debt being serviced with a dramatic reduction in farm income, all disincentives to high land costs.

How do you not see this as huge blow to farm capital values?

[Templeboy]

Is it more likely that land is overvalued in other areas than Sask ?
Or our dollar simply devalued and it enhances inflation ? It’s happen in many other countries where inflation is the cause of a devalued currency.
Not sure to be honest, but land values since 2000 have gone from about $100,000 a 1/4 to $600,000 plus now .
Long term crop production averages are up just marginally in that time frame .
But land values could definitely stay ever increasing , it is possible as well

I really don't think land prices can keep increasing (I do think its going to hold for a couple years where it is).

The combination of low Interest rates and a commodity supercycle caused the sudden increase. Lots of people with cash on the balance sheet were encouraged by some accounting firms to spend that money on hard assets (or you are going to be taxed). If you held your cash in grain inventory, you have already taken a haircut. By '26 or '27 many cheap mortgages will come due and there will be quite a bit of reallocating money to interest instead of principal payments. The free ride on equipment will soon be over, the lots are full of recent trades. Lots of equipment is leased so it looks balance sheet neutral, but many leases have the farmer responsible for the value at the end.

Everything will go along pretty easy until a few banks get burnt. Good times kill farms, not tough times. This is my opinion.

[LEP]

I really don't think land prices can keep increasing (I do think its going to hold for a couple years where it is).

The combination of low Interest rates and a commodity supercycle caused the sudden increase. Lots of people with cash on the balance sheet were encouraged by some accounting firms to spend that money on hard assets (or you are going to be taxed). If you held your cash in grain inventory, you have already taken a haircut. By '26 or '27 many cheap mortgages will come due and there will be quite a bit of reallocating money to interest instead of principal payments. The free ride on equipment will soon be over, the lots are full of recent trades. Lots of equipment is leased so it looks balance sheet neutral, but many leases have the farmer responsible for the value at the end.

Everything will go along pretty easy until a few banks get burnt. Good times kill farms, not tough times. This is my opinion.

I agree with alot of what you say.

But the 80's were good times???

[jamesb]

What comes to mind is from a few years ago when lots were buying boats and campers over really long terms just to make the monthly payment low enough to cash flow it on the wages earned. For me what I am seeing is land coming on the market that has been held by a family since homesteading times. The current price coupled with the fact the the farm isn't viable anymore has given the opportunity to acquire land previously thought not possible. I am old enough to remember the 80's and while it was bad for some others did just fine. An old farmer/ machinery dealer told me years ago something I have never forgotten. If you can have cash to spend when few others do you can have opportunities that few others do. Remember outfits willing to trade wheat for machinery? Cash is king.
Regarding land though it seems the world over that there is such an appetite for farm land ownership, its hard not to jump in and buy. I just have to try and not get over aggressive and stick my neck out too far.