land prices

[Jagfarms]

The land prices have more than doubled in our area in the last 5 years.
They went from less than $500 acre to $1000 acre.

Some people think the prices are going to continue to climb. Others think it will be like it was in the 80's when prices peaked and dropped down again later.

My guess is the prices can't stay at these levels if the commodity prices drop. when Durum was $10 and 40 cent lentils I could understand these prices. With Durum at $4 or less and the prices of everything else going down as well the present land prices do not pencil out for me.
Durum is the crop that is mostly grown in our area.
If the interest rates go up and the price of commodities keep coming down I think the land prices will have to come down to.

What are your thoughts on land prices?

[TOM4CWB]

Jag,

My bet would be on an overall increase over time.

Currency will be a driver... if the CDN $ went to 1.5 over the US $... perhaps a decrease would occur... BUT then grain prices would concurrently rise by 50%. No big livestock splurge on land... except SM5 folks who will buy big time at these prices.

[grrrr]

Who is driving the price so high? In this area it is the big corporate farm or at least the threat of them. We just had the two best crops we have ever had and good prices at the start of it all. That will not likely continue and I think there will have to be a correction.

[Burbert]

In Albertie, it is simply real estate investment. Since there are no land use laws on the books, people buy up the farmland, build and rent the rest out to the yokels, at the going rate. Also relocatin farmers from cracker alley, where they've paid out huge sums fer land. Fort McMoney is destroying this province, land and water, as fast as it can!!!!!!! Stealin from Alberta is a full time job......

[vvalk]

Again, real intelligent Burbert. I have seen you talk normal so why talk like a five year old. Anyways if you look in Africa or Indonesia etc you will see that the people are super poor yet land prices are very high. I have seen it where the people walk 4 hrs one way to go to school and work very hard just to get fed yet land prices are upwards of $2000 an acre. In fact sometimes priced by the square foot. In many cases it takes generations to pay for the land. I think land prices ( especially $1000 an acre land or less)can go up yet. There is irrigation land now around Lethbridge going for $5500 to $8000 an acre. Look at the Abortsford area. $60000 plus an acre land. The future price of land will have nothing to do with the economic return on it. I think this will be an important concept.

[Jagfarms]

In our area it is the threat of big corporate farms moving in.
All the land so far has been purchased by local farmers. There was some big corporate farms looking at the land for sale in our area and local farmers have been buying the land to try to keep the big corporate farms away.

It has been some bigger blocks of land selling for the high prices and I am thank ful that it is local farmers buying it up.

The big coporate farms won't buy a half section here and there. They want it in big blocks but if they did get a bock of land in our area they would be after every quarter that is for sale.

I think it is the fear of this that is driving the land prices up in our area.

[Jagfarms]

" Indonesia etc you will see that the people are super poor yet land prices are very high."

About the quote above. I have traveled to Indosia a few times and have toured the farms there.

They pretty much farm with a rototiller for a tractor and do most of the work by hand.
It is more like gardening than farming.

The monthly wage in Canada for farm workers would be more money that lots of people in Indonesia would make in 3 year.

The land has been in the families for generations and most farmers there only own a few acres.

Here in Canada the farms are getting bigger all the time. The input costs and costs of machinery are much higher here.
I do not see the farms getting smaller in Canada. I can see some people from the city buying land as an investment and renting it out to farmers.

[cottonpicken]

125 people per section of land on the planet,take
away mountains,desert,jungle and i dont know how
many thousands per agricultural acre.

A neighbour friend was selling a quarter to a city
yokle after he told him the price the guy said"so the
price of a new truck".

Just be thankful you live and farm where land is the
cheapest on the planet-for now.

And you deflationist that keep cash under your
mattress-thank you.

[cottonpicken]

Another comparison of value-(that my brain
continuosly seems to think about)would be to
compare land values to house values from the
seventies until now,with emphiss on early eighties and
right now.

Ballpark numbers-one fine new house 1983=one
quarter of land in mine area
now-8 quarters of land=one fine new house
(feel free to correct the numbers of this analogy)

[ajl]

Land prices will continue to be driven up because of currency devaluation. If governments faced sound money then all nations in the western world are instantly broke like Greece. Therefore this time around they will let inflation rage. The only thing that would force land values down is the inablility of us to export leading to the inablitity to service debt and then the banks start to sell land. But after seven years of BSE there have not been any forclosures of cattle ranches other than a few that were going to take the banks money. One of the diffences between us and Indonesia,India, and the US is that we are more dependant on exports than farmers in those countries which is the reason that land is cheaper here than there. So I foresee land continuing to rise until you see some foreclosures then all bets are off. That being said there is more land for sale now then has been for a long time (all at high prices) and a lot of it is estates meaning that the guy expired. This will also have the effect of curbing land increases. Bottom line is that there are powerful forces out pulling land both up and down right now.