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Dec 3, 2020 | 17:22 1 In the land price thread, it was suggested that perhaps the lower priced land might be lower priced for a reason, and vice versa. The free market at work.

So I looked at the crop insurance numbers for AB in 2019.

The highest yielding crop risk area's average wheat yield was 4 times the lowest, canola more than 3 times, barley, peas similar, oats 5 times etc.

Fixed costs aren't that much different. Seed costs, pesticide costs ( possibly even much higher in drier areas from producers I've talked to), seeding and application costs, labour (harvest excepted) all very similar regardless of yield expectation. Only fertilizer and possibly fungicides and amendments are much lower in the lower yielding areas.

All those marginal bushels above the input costs can and probably do get bid into land prices.

Using the canola yields mentioned above, using a $10/bushel, the highest yeilding area had $350 more dollars per acre minus some additional fertilizer to bid into the price of land. In 10 years time the difference between $1500 land and $5000 land is already paid for, not including interest, extra fert etc.

Suddenly the $5000/acre land doesn't look so out of line.

Grossly over simplified, but stark nonetheless.

2019 may be an anomaly, but the previous years didn't close the gap very much either.

I assume Sask variance between areas would be similar? Reply With Quote
  • 2 Likes


  • Dec 3, 2020 | 17:26 2
    Quote Originally Posted by AlbertaFarmer5 View Post
    In the land price thread, it was suggested that perhaps the lower priced land might be lower priced for a reason, and vice versa. The free market at work.

    So I looked at the crop insurance numbers for AB in 2019.

    The highest yielding crop risk area's average wheat yield was 4 times the lowest, canola more than 3 times, barley, peas similar, oats 5 times etc.

    Fixed costs aren't that much different. Seed costs, pesticide costs ( possibly even much higher in drier areas from producers I've talked to), seeding and application costs, labour (harvest excepted) all very similar regardless of yield expectation. Only fertilizer and possibly fungicides and amendments are much lower in the lower yielding areas.

    All those marginal bushels above the input costs can and probably do get bid into land prices.

    Using the canola yields mentioned above, using a $10/bushel, the highest yeilding area had $350 more dollars per acre minus some additional fertilizer to bid into the price of land. In 10 years time the difference between $1500 land and $5000 land is already paid for, not including interest, extra fert etc.

    Suddenly the $5000/acre land doesn't look so out of line.

    Grossly over simplified, but stark nonetheless.

    2019 may be an anomaly, but the previous years didn't close the gap very much either.

    I assume Sask variance between areas would be similar?

    I can't argue the comments because for whatever reason it always works on paper. Reply With Quote
    Dec 3, 2020 | 17:49 3 There is more to it than production capability by far, IMO. Urban pressure, Hutterite presence, how well heeled the btos are, foreign investor pressure.

    There is land far less productive than ours, selling for far and away more than our area. I would wager that we are probably one of the most potentially productive long term areas, and have probably among the lowest land values around.

    Land prices are double what they are here, half an hour west of me. Lower long term yields. But they have hutterites, bigger btos, and Chinese investment.

    Land productivity is a factor to an extent, especially quarter to quarter in a given area.

    Around here, even with higher yields generally, ( take out the wet years, I see them as an anomaly), and lower land prices, it still barely pencils IMO. Reply With Quote
    Dec 3, 2020 | 18:26 4 supply management Reply With Quote
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  • makar's Avatar Dec 3, 2020 | 19:25 5 Many who sold elsewhere and bought here realized why very fast, one quote i recall after 25 bu oats, well i didn't need fertilizer were i came from. Reply With Quote

  • makar's Avatar Dec 3, 2020 | 19:44 6 Another dork in the 80s sold one irragated 1/4 and bought 3 here, thought he was a genius, well he bought half bush of marginal land, cousin bought it 20 years laler for 2/3.
    Last edited by makar; Dec 3, 2020 at 20:18.
    Reply With Quote
    makar's Avatar Dec 3, 2020 | 20:21 7
    Quote Originally Posted by makar View Post
    Another dork in the 80s sold one irragated 1/4 and bought 3 here, thought he was a genius, well he bought half bush of marginal land, cousin bought it 20 years laler for 2/3.
    Even more stupid a landman was talking about drilling a well so buyer fronted the oil well money, well never happened. Reply With Quote
  • 1 Like


  • GDR
    Dec 3, 2020 | 23:29 8
    Quote Originally Posted by AlbertaFarmer5 View Post
    In the land price thread, it was suggested that perhaps the lower priced land might be lower priced for a reason, and vice versa. The free market at work.

    So I looked at the crop insurance numbers for AB in 2019.

    The highest yielding crop risk area's average wheat yield was 4 times the lowest, canola more than 3 times, barley, peas similar, oats 5 times etc.

    Fixed costs aren't that much different. Seed costs, pesticide costs ( possibly even much higher in drier areas from producers I've talked to), seeding and application costs, labour (harvest excepted) all very similar regardless of yield expectation. Only fertilizer and possibly fungicides and amendments are much lower in the lower yielding areas.

    All those marginal bushels above the input costs can and probably do get bid into land prices.

    Using the canola yields mentioned above, using a $10/bushel, the highest yeilding area had $350 more dollars per acre minus some additional fertilizer to bid into the price of land. In 10 years time the difference between $1500 land and $5000 land is already paid for, not including interest, extra fert etc.

    Suddenly the $5000/acre land doesn't look so out of line.

    Grossly over simplified, but stark nonetheless.

    2019 may be an anomaly, but the previous years didn't close the gap very much either.

    I assume Sask variance between areas would be similar?
    Future potential is pretty big consideration also, most of the "better" land is in areas that has higher population. Land that is 3 hours from a Costco is gonna fluctuate more with farm economics. An hour away and it really doesn't matter what grain prices are because there is a much more diverse range of potential buyers. Reply With Quote
    Dec 4, 2020 | 00:14 9
    Quote Originally Posted by GDR View Post
    Future potential is pretty big consideration also, most of the "better" land is in areas that has higher population. Land that is 3 hours from a Costco is gonna fluctuate more with farm economics. An hour away and it really doesn't matter what grain prices are because there is a much more diverse range of potential buyers.
    True, along with the points brought up above. But potential future value doesn't contribute to making it cashflow in the here and now. For a farmer.

    A speculator who has capital or an income source elsewhere, completely different story.

    I regrettably turned down a prime quarter that also had massive aggregate potential. I was quite young, in debt for existing land, and everything had to cashflow itself. The future potential of that gravel didn't help make payments in the first 15 years, which is how long the buyer held it before selling it for gravel for a considerable profit. Reply With Quote
    Dec 4, 2020 | 07:02 10 Gravel pit is the perfect retirement income! Reply With Quote
    Dec 4, 2020 | 07:23 11
    Quote Originally Posted by shtferbrains View Post
    Gravel pit is the perfect retirement income!
    Lots of land got discounted for grain farming purposes if it was coarse. I passed up on a pasture quarter about 10 miles away because it was "light"...... and because the guy I knew selling it was going through a divorce and I didn't want to pay what he was asking, didn't want to look like a vulture and chisel him during that tough time.....so I passed. It is currently being "mined" right now, there was a mountain's worth of gravel there. Oh well....

    A drawback of a spent quarter after gravel removal is you're left with a moonscape. What's the value of it after its been mined of all the good gravel? Reply With Quote
  • 1 Like


  • Dec 4, 2020 | 07:42 12 Name:  Screenshot_20201204-073957.jpg
Views: 1021
Size:  19.8 KB

    You can clearly see the quarter boundaries. The activity to the north and west happened first. Reply With Quote
    Dec 4, 2020 | 08:08 13 Amish bought land here for 1/10 of value of land back in Ontario. Since they have been here a few years land values have gone up 3 times as much. I think that is what changes land values the most in this area. This sandy crap needs a big rain by may 1. Reply With Quote
    Dec 4, 2020 | 09:00 14
    Quote Originally Posted by farmaholic View Post
    Lots of land got discounted for grain farming purposes if it was coarse. I passed up on a pasture quarter about 10 miles away because it was "light"...... and because the guy I knew selling it was going through a divorce and I didn't want to pay what he was asking, didn't want to look like a vulture and chisel him during that tough time.....so I passed. It is currently being "mined" right now, there was a mountain's worth of gravel there. Oh well....

    A drawback of a spent quarter after gravel removal is you're left with a moonscape. What's the value of it after its been mined of all the good gravel?
    That’s the issue. Depending on water table you might end up with a body of water over time. Reply With Quote
    Dec 4, 2020 | 09:12 15
    Quote Originally Posted by Old Cowzilla View Post
    Amish bought land here for 1/10 of value of land back in Ontario. Since they have been here a few years land values have gone up 3 times as much. I think that is what changes land values the most in this area. This sandy crap needs a big rain by may 1.
    If I may ask, what province are you in, and what part of it?

    Over the past 10 years there has been a steady trickle of Amish leave here and gone north and west.

    What some of them who moved to Northern Ontario are finding is that it ain't easy making a living on "cheaper" land.

    A cow eats a lot more hay up there than here in the south of the province. Reply With Quote
    Dec 4, 2020 | 18:30 16
    Quote Originally Posted by burnt View Post
    If I may ask, what province are you in, and what part of it?

    Over the past 10 years there has been a steady trickle of Amish leave here and gone north and west.

    What some of them who moved to Northern Ontario are finding is that it ain't easy making a living on "cheaper" land.

    A cow eats a lot more hay up there than here in the south of the province.
    Manitoba 45 mins northwest of Portage la Prairie . They like the light soil for pulling horse plows but the -30 January days were real eye openers. The one guy told me he grows better corn here then he grew back east plus corn grazing would not work on there clay type soils, too much compaction. Reply With Quote
  • 1 Like


  • Dec 5, 2020 | 09:32 17
    Quote Originally Posted by farmaholic View Post
    Name:  Screenshot_20201204-073957.jpg
Views: 1021
Size:  19.8 KB

    You can clearly see the quarter boundaries. The activity to the north and west happened first.
    Could it be smoothed out, planted to grass and eventually pastured???

    Just wondering? Seems grass will grow on gravel, no??? Reply With Quote
    Dec 5, 2020 | 10:07 18 Topsoil is ‘supposed to be’ stripped and piled according to the mine plan submitted to regulatory body. So in theory it could be recontoured and reclaimed. But if they do a poor job and mix the topsoil it can be lost. Reply With Quote
    Dec 5, 2020 | 10:58 19
    Quote Originally Posted by beaverdam View Post
    Could it be smoothed out, planted to grass and eventually pastured???

    Just wondering? Seems grass will grow on gravel, no???
    I don't know what they have to do.
    Probably depends who owns the land and what the contract states.
    Lots of old pits left as is..... leaving bad terrain. Reply With Quote
    Dec 5, 2020 | 11:51 20 Cheaper to leave it as an ‘active mine/pit’ than to spend the dozer and excavator hours and reclaim it is why they are left in that state. Reply With Quote
  • 1 Like


  • SASKFARMER's Avatar Dec 5, 2020 | 18:08 21 Funny little bit of info no land has sold north of town in three years and that sale was nephew from aunt and nephew from uncle.

    South big sale happened and now Albertan moved in might give gas buddy a run. South Africans are players and buying. Further north some younger farmers bought a nice size cost enough but cheap compared to other areas.

    Funny we’re clay and clay loam flat to gentle and it usually rains or over does it. Always a crop and we play with the big hitters on yield most years.

    But loose two or three corporate big dog farms that we’re going to show us all how to farm with Toronto money and well the rest don’t sell don’t care and farm on.

    Also only 10 real family farms in our area so unless your relative or bachelor selling out or a section or 6 quarter farmer nothing trades find a value is hard.

    Good area but funny when a bank values your land with assessments like Regina and prices like edgeley.q.

    It slowly is moving up. Reply With Quote
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  • SASKFARMER's Avatar Dec 5, 2020 | 20:53 22 When he sold gas buddy.com he bought south/East of us a nice farm and continues to purchase. Morris’s also crossed the big hole in the ground Reply With Quote
    Dec 6, 2020 | 09:13 23 IMO, land in the prairie provinces is lagging because of a lack of foreign influence. Every other industry in Canada has foreign capital flowing into it especially housing in cities. Canada is a capital and infrastructure poor country.

    The land and probably the economy would get a considerable pop if more of that was allowed, but would it be a good idea? Bring it in and tax the hell out of it?

    Sask holds the largest chunk of arable land in the country and it has heavy restrictions on ownership and development in many rms. Go around Calgary and edmonton and there are acreages an hour out. Some around saskatoon, not a lot around regina. Reply With Quote
    GDR
    Dec 6, 2020 | 09:37 24
    Quote Originally Posted by jazz View Post
    IMO, land in the prairie provinces is lagging because of a lack of foreign influence. Every other industry in Canada has foreign capital flowing into it especially housing in cities. Canada is a capital and infrastructure poor country.

    The land and probably the economy would get a considerable pop if more of that was allowed, but would it be a good idea? Bring it in and tax the hell out of it?

    Sask holds the largest chunk of arable land in the country and it has heavy restrictions on ownership and development in many rms. Go around Calgary and edmonton and there are acreages an hour out. Some around saskatoon, not a lot around regina.
    There are a few concentrated areas that lots of foreign money flows in. Mostly specialized farms. For sure affects the prices and I would hate to see it encouraged. Good as an exit strategy but otherwise harmful to local economies. Before SK relaxed their land ownership laws I wished we had similar here. You must attribute some of the recent years run up to those changes?

    I'm an hour from Calgary and yes acreages on almost every quarter but it doesnt stop here. I've known lots of people that commuted 2hrs each way to the city. Our county did try to put some subdividing rules in place to limit the number of acreages and tried to restrict it to long term owners as opposed to guys buying and then right away subdividing to help pay for the purchase but it didnt last long, officially some policy but basically whatever goes. Reply With Quote
    SASKFARMER's Avatar Dec 6, 2020 | 10:08 25 I guess we're moving on up to the east side of Chicago.

    The latest sale is $406,249.88. 8 quarters sold and yes its arms-length transaction. $2539.06 an acre.

    It's really easy I want $30,000,000.00 I'm done and you get two houses lots of grain storage, dryer system, Cleaning plant. Lots of Cold storage and Heated shop. Spring fed water min 100 gallons a min. Would make a nice Hutt Colony or investor farm. Hey, I'll even let you rent another 3000 acres if you want. Could give up my mineral rights on 10 quarters but that's negotiable.

    Price is non-negotiable its the quoted amount. Reply With Quote
    Dec 6, 2020 | 10:30 26
    Quote Originally Posted by SASKFARMER View Post
    I guess we're moving on up to the east side of Chicago.

    The latest sale is $406,249.88. 8 quarters sold and yes its arms-length transaction. $2539.06 an acre.

    It's really easy I want $30,000,000.00 I'm done and you get two houses lots of grain storage, dryer system, Cleaning plant. Lots of Cold storage and Heated shop. Spring fed water min 100 gallons a min. Would make a nice Hutt Colony or investor farm. Hey, I'll even let you rent another 3000 acres if you want. Could give up my mineral rights on 10 quarters but that's negotiable.

    Price is non-negotiable its the quoted amount.
    How many acres do I get for that price? Reply With Quote
    Dec 6, 2020 | 10:33 27
    Quote Originally Posted by GDR View Post
    I'm an hour from Calgary and yes acreages on almost every quarter but it doesnt stop here. .
    Alberta is set to add 2-3 million more people in the next 20 yrs. Sask and MB about 300k each.

    I would say land anywhere within a stones throw of Calgary, the QE and edmonton would be a great bet right now especially with the economy lagging. Even with diminished oil, Calgary is no Detroit.

    Canada is moving toward a handful of mega cities and some large second tier metros. Going to be a lot of outback space between so that land better grow a lot of grain, or have oil or minerals under it. A northern version of Australia. Maybe sask will get peppered with solar panels. Reply With Quote
    SASKFARMER's Avatar Dec 6, 2020 | 10:35 28 6400 cult plus an additional 3200 if you want. Reply With Quote
    Dec 6, 2020 | 10:38 29
    Quote Originally Posted by SASKFARMER View Post
    I guess we're moving on up to the east side of Chicago.

    The latest sale is $406,249.88. 8 quarters sold and yes its arms-length transaction. $2539.06 an acre.

    It's really easy I want $30,000,000.00 I'm done and you get two houses lots of grain storage, dryer system, Cleaning plant. Lots of Cold storage and Heated shop. Spring fed water min 100 gallons a min. Would make a nice Hutt Colony or investor farm. Hey, I'll even let you rent another 3000 acres if you want. Could give up my mineral rights on 10 quarters but that's negotiable.

    Price is non-negotiable its the quoted amount.
    Chyrstia is drooling with anticipation of your offer being accepted.

    She's got you in her cross-hairs.

    She will "unlock" you.

    She will make her untouchable trust-fund baby boy boss happy.

    Make. No. Mistake. Reply With Quote
  • 1 Like


  • Dec 6, 2020 | 10:41 30
    Quote Originally Posted by SASKFARMER View Post
    I guess we're moving on up to the east side of Chicago.

    The latest sale is $406,249.88. 8 quarters sold and yes its arms-length transaction. $2539.06 an acre.

    It's really easy I want $30,000,000.00 I'm done and you get two houses lots of grain storage, dryer system, Cleaning plant. Lots of Cold storage and Heated shop. Spring fed water min 100 gallons a min. Would make a nice Hutt Colony or investor farm. Hey, I'll even let you rent another 3000 acres if you want. Could give up my mineral rights on 10 quarters but that's negotiable.

    Price is non-negotiable its the quoted amount.
    Can that farm pay for itself....at the current prices?

    To make P&I payment you would need 3 million clear after expenses every year Reply With Quote