Richie Bros-SASK Spring Yard Sales-OMG WHAT IS GOING ON

[Quadtrack]

No f$&?ing way land by Wilcox is worth over 4K an acre. There’s some clay there sure, but it’s not the higher yielding area of the prov by a long shot. How is it even possible to generate a return that would resemble a return on investment? I don’t know what this monete is doing or where source of funding is, but string together all the efficient scale you want, this doesn’t make any sense. That type of money into commercial real estate or a higher margin enterprise is believable. Into primary production? Nope.
Like the line in Wedding Crashers, “Big tree fall hard”

[4GFarms]

I would think buying the land at the values stated only makes the ability to borrow more from increased land/asset inflation from their previous land therefore giving them the increased borrowing or line of credit they need to keep things rolling. Whether good or bad nobody knows.

[oldjim]

No Wilcox land probably isn't worth $4,000/acre but you can find a lot poorer ground in parts of Alberta for more money. But you can farm 160 acres on every quarter, no bush, no rocks, flat as piss on a plate, this land Monette bought is 15 miles from Regina. There's about seven or eight different crops grown. It ain't paradise but you can see it from here! :-)

Don't forget, this is only a portion of the Monette operation. They started from a base at Swift Current, bought up land south of Regina and have also expanded to Prince Albert and Havre Montana. Here's their website: https://www.monettefarms.ca/

They aren't the first bto's in the area, in fact some of their land has been through two previous big investor outfits. The first one started buying up mom and pop farms in the early 2000's for $800-900/acre, flipped it to an investor based in BC and now Monette. The first guy never did grow a crop but things were tough back then, especially 2004. But what he lacked in crop income he made up for in capital gains so "it's all good" as John Gormley says.

Monette isn't the only one paying this kind of money for this land but of course he's doing it on a much bigger scale. I don't know what his source of money is, frankly I don't care. I can't imagine trying to run a farm that size but how do guys like Steve Jobs build empires like they do, too? I don't know the guy but have talked to a couple that do and they speak well of him. Time will tell how it all ends up.

[jazz]

No f$&?ing way land by Wilcox is worth over 4K an acre. ”

Half the land base is on the other side of #6. That's all heavy clay. Bog like when it rains a lot but far enough south that doesn't happen very often. Yes at least 5 crops viable in that region. $4k and acre, not sure about that.

[Quadtrack]

4000 an acre needs $160 an acre to cover 4% money. Plus another $10 for muni taxes. Which of the six viable crops will provide $170 over cash and fixed costs?

[jazz]

4000 an acre needs $160 an acre to cover 4% money. Plus another $10 for muni taxes. Which of the six viable crops will provide $170 over cash and fixed costs?

100 bu canola?

I stopped seeing rationality in these purchases. Monette has land right beside me. I don't know what they are doing. Building a land base for china? or teachers pension funds. I have no idea.

[SASKFARMER]

Monette hahaha compared to Steve jobs is a ****ing joke.

Name one farmer who made it to become a billionaire farming?

I’ll wait?


I’ll wait some more.



More money buying a golf course in Florida than farming.

Regina gumbo tell me after 10 days of 90 above and zero rain with wind and the five crop is out.

Show me the financing for this lady years crop wouldn’t pay jack shit.

Show me the two investors.

Come on follow the money.


Something doesn’t add up I’ll give him a plus for trying but something doesn’t add up.

[Robertbarlage]

Chinese investments

[oldjim]

Well son, I'm not saying he's Steve Jobs but he has the ability to raise capital and the balls to take risk like all industry leaders start out with. And he's not the only one - take a look at Kambeitz' operation at Lajord, there's a lot of guys going flat out. Most will fail, but one or two will squeak out a win. At one time when Wolfe came into the area the local coffee shop wags were going on about him like they are about Monette. But they made it through three generations and have $30 million to play with, less the percentage they have to send to Skippy for capital gains. Everyone wondered where they got their money, rumor was Germans idk. Old Rudy wasn't just in farming - he was an entrepreneur with multiple businesses. Maybe Monette is the same, maybe he's frontman for Gary Redhead or Jim Pattison as the rumours have it. Maybe he owns a gold mine somewhere, who the hell knows? I don't give a shit, and I'm not sure why anyone else does. If he makes it it'll be a hell of a story. If he doesn't it'll be a hell of an auction sale.

[Richard5]

Its either if you get the money go hard or farms with tons of debt, flipping the complete line of equipment each year don't understand what profitability it, or maybe even common sense. I still think its all about the show for many. But when a bank or FCC says no or you hit the max lending cap, isn't that a sign?????

Going to another bank cannot be good advice or an option in most cases.

If you have a loss in your financial statements once in the last 5 to 6 years that would be concerning to me just because of generally very good times. I have 5 year comparative statements so really nice to see past.

But as most have said already, land prices seem out of reach, farming at that size to me is a headache.

Buying a golf course in Florida?? definitely not interested either!

[TSIPP]

+30 million or -30 million ill bet wolf was somewhere in between

[jazz]

Buying land to farm at that scale is a 2 sided bet. Its not just can you get funding for it and can you get over it every year before mother nature kicks you in the nuts.

The country and govt holds the other side of that bet, that this is an industry that is important and will be supported, if not financially then strategically by strong intervention in keeping infrastructure and export trade lines open and growing.

I dont see the second side of that bet at all.

Maybe the bet on a land base that big is a bet on something else that has nothing to do with farming it at all.

[Oliver88]

4000 an acre needs $160 an acre to cover 4% money. Plus another $10 for muni taxes. Which of the six viable crops will provide $170 over cash and fixed costs?

Interesting. I have heard of land between Moose Jaw and Buffalo Pound selling for a shade lower than this price as well.
Is this the case of a large amount of successful farmers living in a small area bidding up land to unprofitable levels?

[Austrian Economics]

Here's something I've done to try and understand the "true" cost of land. Convert today's per acre price and prices going back decades into the gold price for each period.

In my neighborhood just outside of Winnipeg, in 1980 land sold for about 1 ounce of gold per acre.

Today, the same piece of land sells for between 2 and 3 ounces per acre.

If you had to go out and mine gold to buy land, back in 1980 my parents would have had to mine one ounce of gold to buy an acre of land.

Today, you have to mine two or three ounces. In other words, you have to work two to three times as hard to buy the same asset.

By setting in motion an exponential growth in debt, fiat currencies are incredibly destructive. They incentivize not the creation of capital, but its consumption. As capital is sucked out the the economy, people find themselves working harder and harder to retain their standard of living.

Because fiat makes interest rates inherently unstable, your success in business depends on your ability to time your borrowing to take advantage of downswings in interest rates during each mini-cycle of the falling interest rate trend. If you mistime it, you can wind up with a huge capital loss.

People talk about normalizing interest rates all the time. Does the mortgage rate trend in the graph below seem "normal" after 1970? Same for the 10 year treasury yield below it. Although the gold standard was not a classical one back in the 50's, my parents started farming at a time when the cost of capital was remarkably stable. Those days are long gone and we're paying the price.

[Crestliner]

Well son, I'm not saying he's Steve Jobs but he has the ability to raise capital and the balls to take risk like all industry leaders start out with. And he's not the only one - take a look at Kambeitz' operation at Lajord, there's a lot of guys going flat out. Most will fail, but one or two will squeak out a win. At one time when Wolfe came into the area the local coffee shop wags were going on about him like they are about Monette. But they made it through three generations and have $30 million to play with, less the percentage they have to send to Skippy for capital gains. Everyone wondered where they got their money, rumor was Germans idk. Old Rudy wasn't just in farming - he was an entrepreneur with multiple businesses. Maybe Monette is the same, maybe he's frontman for Gary Redhead or Jim Pattison as the rumours have it. Maybe he owns a gold mine somewhere, who the hell knows? I don't give a shit, and I'm not sure why anyone else does. If he makes it it'll be a hell of a story. If he doesn't it'll be a hell of an auction sale.

Well as the saying goes “it’s hard to read another persons mail”.....so we really don’t know what fuels Monette or Wolfe....or what the facts are for sure....but we can draw on what makes sense...common sense.

Wolfe is gone and he is selling really new equipment at an auction house that has a reputation for quick sale, no reserves, along with high selling commissions....so either Wolfe got so much money for his farmland he doesn’t give a shit about what he gets for his equipment. Or there was no plan to sell it like this when they bought it...common sense says there will be a big hit on this stuff.

Common sense also says that farming is a high consumer of capital and is highly leveraged when you are a BTO. Margins are so thin cost so high that borrowed money always has to lever up the little cash that is made. So these are high financed deals that require a friendly banker.

Common sense and history says that bankers are generally assholes and can’t be trusted for the long haul. They give you an umbrella on a sunny day and take it away when it starts to rain.....Scotia is in deep with Monette I believe as someone showed a debenture security a few years ago here for $100 million or something.....wow big partnership.

I remember when Possberg and Big Sky were holding hands and going to all the dances with Scotia when pigs had wings ....the clouds on the horizon moved in and tuned to rain and......oops the umbrella got taken away.

I don’t wish any bad on BTO’s as each to their own....but there comes a time when it might be greed or ego fueling this whole scene.

I just think there are a lot of careful, financially conscience young men and women who want to farm in the worst way, who would do a good job, raise a family in rural SASK, keep some smaller towns viable, but don’t have a chance to participate due to partly the actions of BTO’s......but their only chance to work the land is for the BTO and get a T4 slip. Sad.

When the inevitable correction comes, and some of these BTO’s blow up.....maybe these young men and women who can’t get going now might have a chance if they aren’t too old, already move away from SASK and are enjoying a monthly pay check and the farming things was just a dream they have no interest in....and common sense says no wonder our country side is dying.

Capitalism unchecked can be a bitch sometimes....eh?...just like a Federal Government that has no long term AG Policy.