Land rent

[blackpowder]

Agreed Ronski. Merely repeating what some non farm landlords say. Thats why I meant unsustainable as an equation.
Farma, if I may. When has an acre paid for itself on a stand alone basis without a subsidy from other acres or outside income??
60 bushel land at 4,5, or even $8000. 700k for a combine but not a quarter of land?
A $1,000,000 list combine is already here.
Not arguing with you or the market, just telling you the way it is.
And trust me, any non farming estate beneficiaries are gonna sell!
Obviously some type of crop income percentage is realistic.
I just wish the actual %s charged here would become realistic!
4 years ago one field of peas netted the landlord $170/ac.
Does it matter if he paid $100/ac to buy it or its market value today is $4500?
15 years ago a number of acres in Sask were selling for $100. How much did you buy?
At the time it was $700 here. And no I didnt buy enough either.
Good thing too, the ex wouldve just bought a bigger house.

[farmaholic]

BP, Definitely a different world, that's for sure. I don't ever remember $100/ac land here, I'm sure it was at one time but not that I can recall since I started to take interest. In fact when I started the area seemed to be in what I called a "lock down", meaning you couldn't buy land if you wanted to and couldn't rent any either. Everyone was smaller scale farmers and each had their "patch" and farmed it. Things started to break loose and now land is definitely trading with more velocity.

A very interesting fact that no one seems to bring up was the time when land wasn't being farmed because of a lack of willing tennants or someone would farm it for the taxes.....not anywhere near the values being paid today. And in reality that wasn't all that long ago. Now some people are tripping over themselves and others to rent it! How times change and won't the "Bay Street" or "cash" Investors look if that ever happens again and it damn well could. There's no doubt some people will have made out very well if they got to the party early enough. There could also be some long faced investors when they realize the big appreciation in the asset may have already happened or their $3000/ac(or what ever) investment lost 10-20% of what they paid and are looking at a $300-$600/ac loss in value AND maybe no one will rent it! I personally think the party in Sask is just about over, no doubt we needed to catch up but I think it's cresting and probably/hopefully going to plateau but don't be alarmed if there's a correction. ...it's happened before.

So I guess the guy renting it must be making good money if they are willing to pay those high rents. Otherwise, why would you farm it for nothing? Unless they're farming it for their ego and not their bank account but an inflated ego doesn't pay the bills like an inflated bank account!

To each their own. I just wish I new what the future held.

[blackpowder]

As soon as Sask land opened to outside buyers a few locals here bought. A personal aquaintance of mine was at rb sale and paid 100. Now rents for that. Ironically seller went tits was originally from ab.
20 years of shit conditions the mind so when a shift occurs you dont see it. For a time land didnt sell here either. People had to beg. Whether grain prices have found a new average or not, they will exert the limits for rent. That will in turn stop the "investors". Remember me saying we've never had institutional buyers in this area? Trade wars and dry years change things but.. When my siblings left the farm it was an existence. (Now they want the land of course) Now all local buyers well capitalized, huge houses. And yes, healthy balance sheets. (I know some bankers) Reality, there is no small. Land may stop trading. It will stop appreciating. Rents will ceiling. Beyond my horizon there could be a major downturn in equity. Operations went from being diversified in non profit cattle to profitable off farm businesses. Remeber, here, not bumper area, but very stable weather wise. I do agree that sub 40 yr olds dont remember the 25 yrs of shit!
Two of the usual buyers here dont rent any. Generally, transactions here represent smaller %s of their whole.
Interest rates will be the biggest risk of course. Double or triple them and all bets are off.
As for renting for low margin. If you have the luxury, wisdom, or capacity to avoid it. Great. Either through equity or another career choice, fine. Some of us can pay it. Some of us have to. Personally I feel I'm too far down the river and supporting too many people to make same living crushing gravel for the county. I'm actually proud of the "little" I've done in last 10 years. At least I'm experienced in leading a dull life.
We've all missed some great opportunities by saying "it can never". And some great risks as well. Until the shit really hits the fan, and it will, we just dont know when, how long or how hard, We'll all keep on keepin on.
Enough of the disbelief already.

[farmaholic]

BP, it may appear my dumbfounded awe is disguised as disbelief!