Where do we go from here??

[furrowtickler]

Some land sold around here in early Jan for over 4.5 times asses. Average land at best(45-65000) with bush and rock ridges, 12 miles east of town. No oil anywhere in sight and no chance over urban developement for 100 yrs or so...? Too far from town for acreages with no proven scorce of water.
Just a pissin match between a young aggresive guy and old money non- farmer. Around $250,000 per 1/4. This same dirt could not fetch $70,000 a few years back.
What else is going on that most of us don't know about? This can not be just a grain price driven market or good investment opertunity, niether one makes any sense what-so-ever.

[TOM4CWB]

Furrow,

Take a good listen to Bloomberg or other investment services.

Canada is now the 'Gold' standard for investments... with the most stable economy in the G7.

Not a surprise that folks put their money in land instead of the bank... and borrow funds at very cheap rates.

Be happy you have some land that is appreciating along with the rest... as the tide is making all ships rise!!!

Cheers!

[bucket]

Tides go down as well and there is a better chance of a shipwreck at low tides.

If I was younger and had time on my side and the land, I would sell out and wait to become a salvage master.

[furrowtickler]

I have also heard of some major funds are about to sweep up as much dirt as possible as quickly as possible. The Canadian Federal pension fund is one of them, Bonnefield Canadian Farmland Corp, as well as the already large wealth management groups established.
Ya, my land has "trippled in value" in the last five years but so did the houses in Arizona and Florida before 2008 and land here in the mid 80's.
I understand your statement Tom but it really depends on your age in all of this. 70's ready to retire with no siblings best time in history. 40's looking to expand - numbers do not work anymore. 20's getting started, you will never own the land and you will be working for a walmart farm corp very soon.
Ya the future is bright in ag but for who???
Investers paying this kind of money will never make a possitive return in the long run.
Read that post on farming in Russia. Time will tell how long grain/oilseed prices will stay at these levels.
Remember when oil was 120 goin to 200, what happned - too far too fast.
What happened to wheat in Minni, from $6 - to 25 then - crash. Again too far too fast.

[ajl]

Excellent analysis furrow. We will be
reminded that cheap land is what keeps
Western Canada competitive with Brazil and
Russia is cheap land. Russia is always
its own worst enemy but if that ever
changes watch out. I an in the 40 yr old
category that you described well.

[SASKFARMER3]

Probably the hardest thing in the world
to do in land markets like this is to
sit and wait. AG its driving me crazy
but History does repeat it self and this
time it will be a doozey.
Now if someone came in with a 4.5 times
my assessment then I guess Im out of
here. That gets so close to my number
for letting go.
But deep down their is going to be huge
opportunity for purchasing again. One
frost or two.

[cottonpicken]

You have to stay focused on value on not price.

When gold hits 5 grand and wheat goes back over
25 it will all be a little clearer.

Plus the old land laws and commodity bear
market of 83-2001 made us the cheapest farm
acres anywhere.

[cottonpicken]

4 times zones to the west right now and got to
have a great conversation with an american
government fudicuary at a pool bar.

He is head of the department and moves 10
figures around the markets,so you can imagine
my thrill.

Anywho it was nothing but fear in his thoughts.


I had no problem buying this man a 90 dollar shot
of scotch.

[Mufferaw]

If land foes for 4.5 times the assessment, why would you argue with it? Far too often people get emotionally tied to the land, and don't sell because of that attachment. After all it's just land.

My land is assessed on average around 40,000, if someone came an offered me 2.5x the assessment when historically it sells at assessment, it would be gone in a heartbeat - with the exception of the home quarter.

If someone wants to overpay let them. Buy a cheap house in Arizona and spend some more time off in the winter.

[Hopperbin]

Is that that land that has a farmer paying 80 per acre rent? 80 per acre rent will still bring an investor 5 percent before municipal tax.