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Jan 18, 2021 | 18:09
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Hearing rumblings some investors are tired, fed up, no more big profits. Yes some smaller players are getting out. Some farmer friendly investors are waking up and realizing profit is min in farming and pulling funding or saying sell.
Some banks are getting nervous.
Taxes now been added over and above rent.
Farmers are buying land that a few years ago they said was to expensive now are buying same land and paying way more.
More buyers than sellers.
Diff between Alberta Manitoba and sask for land.
So is the top here?
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Jan 18, 2021 | 18:42
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You would have to define the time frame. Inflation adjustment yada yada.
But a pause? Yes I think so. Area dependant. For how long?? Depends on political machinations.
Short term, no big upswing here in a season or two. Softening for quality.
$4250-$5000 in general for 2-3 years now depending on circumstance.
Funny how FCC keeps reporting it as up in value every year. How does that work??
Provincial averages include close urban and irrigated I guess.
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Jan 18, 2021 | 19:40
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I see Chinese selling and now farmers buying. Some investors ar getting nervous.
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Jan 18, 2021 | 19:44
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Land prices will trend up until we see a interest hike.
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Jan 18, 2021 | 19:45
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Never was any investors foreign or domestic here.
Last edited by blackpowder; Jan 18, 2021 at 19:59.
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Jan 18, 2021 | 19:46
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Look at the major realty agencies' listings ....or look in the WP for some of the land for sale ...it may tell a story that saskfarmer is highlighting....
Andjelic has land listed...there is a firm out of Toronto with land for sale...Canterra has land for sale...etc etc...My guess is they want to extract their gains....
Pretty sad when the money to made farming is by selling the land...when the real value in the flip ...why farm??? Why buy all the machinery to make thin margins when the real money is in buying and selling land , not fertilizer fuel and seed?
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Jan 18, 2021 | 19:53
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No increase in interest rates. $15 canola, $6 barley, $8 wheat. Land prices are not going down near term.
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Jan 18, 2021 | 19:58
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 Originally Posted by bucket
Look at the major realty agencies' listings ....or look in the WP for some of the land for sale ...it may tell a story that saskfarmer is highlighting....
Andjelic has land listed...there is a firm out of Toronto with land for sale...Canterra has land for sale...etc etc...My guess is they want to extract their gains....
Pretty sad when the money to made farming is by selling the land...when the real value in the flip ...why farm??? Why buy all the machinery to make thin margins when the real money is in buying and selling land , not fertilizer fuel and seed?
Selling for profit before something else happens in the near future ? Because they know what’s coming?
Just interesting when big money starts to leave the market, any market .
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Jan 18, 2021 | 20:10
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Originally Posted by crusher
No increase in interest rates. $15 canola, $6 barley, $8 wheat. Land prices are not going down near term.
I agree. There is likely a round of hungry buyers chomping at the bit now.
Have to wait for the stimulus money to land in land and commodities. That could take a few yrs yet. And see what these grain markets are really telling us. Is this just a temp supply blip or something more chronic developing.
But again, where do you go with the proceeds? I wouldnt sell all my land to go into the stock market. 20% of our net worth is enough in there.
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Jan 18, 2021 | 20:12
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Originally Posted by furrowtickler
Selling for profit before something else happens in the near future ? Because they know what’s coming?
Just interesting when big money starts to leave the market, any market .
I feel that we are targets for that capital gains exemption elimination. Its the easiest tax change to make. Some are seeing that as a risk. I dont trust Trudeau at all.
Longer term, wealth or inheritance taxes and carbon taxes.
Bidens first day in office and we see it already. Trudeau is emboldened.
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Jan 18, 2021 | 20:13
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Who needs investors to keep the price of land up?
We all have neighbours who are doing a pretty good job of it on their own.
Canola at $15, and flax at $20 can do crazy things to a guy.
When cash rent is $125 in some areas, buying land for 500k seems cheap.
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Jan 18, 2021 | 20:23
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I am not sure where everyone else sits, probably bigger farms than mine, but if I sold out tomorrow and invested the proceeds in my lenders stock, I would make more money than farming it.
Talk about a catch 22. What the hell do you do with those economics? Pretty out of whack.
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Jan 18, 2021 | 20:37
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Yes rent is insane now in most of sask.
Step back look at the big picture.
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Jan 18, 2021 | 20:38
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Originally Posted by jazz
I am not sure where everyone else sits, probably bigger farms than mine, but if I sold out tomorrow and invested the proceeds in my lenders stock, I would make more money than farming it.
Talk about a catch 22. What the hell do you do with those economics? Pretty out of whack.
I would think the majority of farms if they sold out would have more than enough equity to never work again, even though while running the farm, lots may have trouble making ends meet. Doesn't really make sense.
I have also criticized buyers of farms thinking if they had that much money why would they risk it farming? Well if I work that backwards now I have to ask that of myself.
Spoke to a realtor last week, lots of land moving to both farmers and individuals looking to park money, some land selling above listing prices with multiple offers.
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Jan 18, 2021 | 20:41
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Originally Posted by jazz
I feel that we are targets for that capital gains exemption elimination. Its the easiest tax change to make. Some are seeing that as a risk. I dont trust Trudeau at all.
Longer term, wealth or inheritance taxes and carbon taxes.
Bidens first day in office and we see it already. Trudeau is emboldened.
The exemption is one thing. What if they mess with the inclusion rate. Was 75% at one point in history.....
Farmers would have a farm sale years ago and never use all their capital gains exemption. Now one quarter bought in the 60’s pretty much uses it all up.
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Jan 18, 2021 | 21:26
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As long as interest rates continue to fall, farmland prices will continue to rise.
There's a bit of a hiccup in the trend right now. Interest rates have trended up and that might be causing some investors to back off a bit. The economy has so many heavily indebted players in it that even a small rise in rates could trigger defaults or at the very least a reluctance to borrow.
Once interest rates go negative, you will see farmland values you would never have imagined.
It's not just farmland prices that are skyrocketing. I read yesterday that in the latter part of 2020, residential housing prices rose so quickly that they accounted for nearly 10% of Canadian GDP.
At the height of the American housing boom pre-2008, housing only accounted for 7% of their GDP.
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Jan 18, 2021 | 21:27
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Large block of land in east sask that was I think organic. Now up for rent 21000 acres good if you want hard work cleaning up a mess. You to can be a BTO.
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Jan 18, 2021 | 22:51
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"When cash rent is $125 in some areas, buying land for 500k seems cheap"
If you find both conditions in the same area, buy.
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Jan 19, 2021 | 05:36
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The higher than normal amount of wanting to rent/wanting to buy land ads on Kijiji and Facebook tell me the top isn't in yet. The run up in crop prices since harvest will fuel the fire. Enough guys out there that will buy or rent just to stick it to someone else.
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Jan 19, 2021 | 06:03
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Originally Posted by wiseguy
Keep buying !
The interest is a tax write off !
And when the interest can't be paid the write downs begin....Grain prices are not the same as the eighties and interest rates on 40,000 dollar quarters kicked the shit out of guys to the point where some lenders wrote down the loan...because the price of land had dropped to 20k..they were losing either way...better to get interest on 20k than none at all...
Can you imagine what would/will happen on land 10 times the price with the same grain prices?
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Jan 19, 2021 | 06:40
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I would think the majority of farms if they sold out would have more than enough equity to never work again, even though while running the farm, lots may have trouble making ends meet. Doesn't really make sense.
So true , slim margins in farming. Grain prices haven't indexed like land and machinery prices...
I think about the bolded statement everyday ...but what would I do with myself...the greatest accomplishment in the last 20 years has been having two kids that enjoy the farm , no video games here...and becoming functioning adults.
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Jan 19, 2021 | 07:16
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Originally Posted by bucket
I would think the majority of farms if they sold out would have more than enough equity to never work again, even though while running the farm, lots may have trouble making ends meet. Doesn't really make sense.
So true , slim margins in farming. Grain prices haven't indexed like land and machinery prices...
I think about the bolded statement everyday ...but what would I do with myself...the greatest accomplishment in the last 20 years has been having two kids that enjoy the farm , no video games here...and becoming functioning adults.
Functional and rationally productive?
B-I-L told us a funny story yesterday - he daughter and 4 grandkids came to his farm for a visit. After a bit, the grandkids got the way kids do when they're not challenged with something productive.
So he told them they could go out and pile the wood that he had cut, split and tossed into a heap, maybe 10 or 15 cords.
When they came back into the house in about 2 or 3 minutes he couldn't quite figure out why they were back so soon.
"It is already piled", was their response.
"Town kids", he said, shaking his head.
That produced a big chuckle. And maybe a teachable moment...
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Jan 19, 2021 | 07:23
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Burnt ...to your question....Functional and rationally productive?
If they are helping the answer is yes...if they are listening yes....if they are suggesting different ways to do something....absolutely....
Both my kids are in Polytechnic now...so rationally productive is a struggle at this point...but I think so.
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Jan 19, 2021 | 07:27
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The Star of Organic has dropped acres and now those are available. Look at the rent terms etc. Yea its is fun to rent from investors.
One thing that won't happen is a write-down of loans if prices go through the roof. It will be a VT to the lender and then skippy will take the land as an asset of the crown and give it to the first Canadians. Farmers will rent it back.
With most farms corporations the write down also won't happen as zero protection.
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Jan 19, 2021 | 08:01
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Asked neighbors if you sell out what to do with money? Well they said going by this area the smart thing to do is buy land???????????
Stock market looks like accident waitng to happen, commercial props ready for big time crash and cash in banks poor return unless you buy chunk of bank. BUT banks make money now by service charges now not lending and young people doing self banking not as many fees so is that train slowing down?
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Jan 19, 2021 | 08:26
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Originally Posted by Austrian Economics
Once interest rates go negative, you will see farmland values you would never have imagined.
Someplaces have been on a bull run for 20 yrs. Toronto vancouver. I imagine Iowa farmland was once $5000 an acre too. Now its 3 times that. Bill was paying upwards of $12k an acre for some of his recent purchase.
Negative interest rates do not have to be posted to be in effect. So long as CPI is running higher than lending rates you have a negative rate effect. I dont see how rates can ever go back to historical norms. That would be a doubling of our debt obligations.
After covid, now I count in the things that could never happen, actually happening.
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