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Is there actually any more money in owning more land? I've been personally debating on what to do about getting extra acres. It feels like most of the extra money goes to paying for the equipment and manpower to farm said land.

I'm starting to think that just doing a better job and/or improving current land is money better spent.
I've come to the same conclusion came home from a land auction for nearly $4000 per acre for marginal land, and had to do a rethink of my strategy. Added up all the acres on the farm which I could put into production with some work( or a lot of work). Trees, marginal wet, potholes, fencelines, junk piles, and was surprised to see that I could add nearly 10% to my crop land, for a small fraction of the cost of buying the equivalent acres. Currently looking for the rest of the toys needed to do it with. Has been an ongoing process, but will make it a priority now. Just bought a fixer upper quarter for much cheaper using the same strategy.
 

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If you listened to everyone who said now is the best time to sell in the past you left anshitload on the table. Now very well may be the time to sell but the can’t go higher crowd hadn’t been right yet.

If you did the opposite of what the can’t go higher crowd said you should be easily retired if you sold out now.
 

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If you listened to everyone who said now is the best time to sell in the past you left anshitload on the table. Now very well may be the time to sell but the can’t go higher crowd hadn’t been right yet.

If you did the opposite of what the can’t go higher crowd said you should be easily retired if you sold out now.
If I had a dollar for every time someone told me land was too high and has to crash, and that interest rates are set to go much higher, I could afford a lot of over priced land.
 

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Discussion Starter #24
If you did the opposite of what the can’t go higher crowd said you should be easily retired if you sold out now.
If I simply did the math of crop prices vs land prices and assumed most land owned by active farmers, its a slam dunk this is near the top.

But, consider investors in there, possible wall street hedge funds, pension plans and my accountant told me BTOs are using money inside their company to buy land in it. More untaxed leverage than buying privately.

Add in the instability in the world, lack of faith in dollar, debt, QE, etc and then I think its upside is huge. Kind of like the gold guys thinking its going to $10k an ounce.
 

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Discussion Starter #25
Part of me thinks there could be a back to the land movement in the future. If jobs become automated and the govt gives you a pittance in supplement income why would you sit in a slum when you could own a quarter, be self sufficient.
 

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It seems to me land, housing and commercial property has pretty much leveled out. Perhaps a few buyers making panic purchases to lock in loans while interest rates start climbing. An interesting purchasing decision if so.

I will bet that if interest rates climb another 3% the entire "investment" dynamic changes. You can purchase anything at any price provided cheap credit is there to drive the bidding frenzy which drives asset prices higher. Remove the cheap credit and you remove the bidding frenzy which, by default, halts the price escalation. And now the "investment" is solely assessed on its earning potential.

Do you buy an asset where the price escalator stopped working or do you move your wealth elsewhere.

But we don't know what comes next. Negative interest rates maybe. Or a buying frenzy to purchase anything tangible as Amazon stock is sold off because people start to think that just maybe a 334:1 P/E may not be a good retirement investment.

Interesting times a head. All dependent on what the bankers do.
 

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When these land price are quoted they never indicate how many acres have traded hands. I am guessing with todays current prices fewer acres are being bought and sold. Land prices are similar to the stock market. When the market is up people only think it will go higher and never go down. Land is like the market and has cyles of ups and downs. When land gets to be $600-700,000 a quarter the return on investment is poor and the risk is high. I can not see the average investor seing that as a good place to put money unless they are a billionaire.
 

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When these land price are quoted they never indicate how many acres have traded hands.
Exactly right. Just because a bit of land traded hands for $XXX does not mean that all land is worth $XXX. It simply means that that is what somebody had to pay to get what happened to be available at the time.

So here we go with assessments and land taxes raging higher, all supported by this ongoing nonsense from the government lender that ALL land is worth $XXX. I mean, why else would they focus so hard on this???
 

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When ever things are happening with a particular stock you want to know what the volume is that is being traded. If there is lots of volume then the price move is more significant. With the FCC they never quote the volume. It seems like they just want to hype it up some more and are not interested in putting any facts behind it.
 

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So not one person is starting out in farming in Canada is not doing it organically (income wise) ...working on the oil patch or another job and buying a small piece ofd land..

WOW...thats sad...

Ant...
 

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I’m sure there is a few Ant but it’s extremely hard. In my lifetime the worst thing you could do here was go get a job and save up the money to buy land. You could never make enough to keep pace with land prices rising, better to buy it but that’s easier said than done if you have no backing.

15 years ago you could get going yourself a lot easier, at the very least land has risen 400% and some trading over 700% more than back then. A job would get you a lot more land when prices were 1/4 to 1/7 of what they are today and more was available it seemed too.
 

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Discussion Starter #32
Housing prices are much the same as land. We dont know the inventory either, just the average prices locally. I wouldnt claim investors to always be a smart lot. Look what they did in Vancouver.

As for starting in farming sure you can go get a high paying job start buying land, farming with junk and using the job to subsidize the bad years all while running yourself ragged. How do you get 3 weeks off your job to farm. A dad or someone has to be the backup and your wife wont like it too much when you are gone all the time to the patch or on the combine. This is how I built my place.
 

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I wouldn't say there aren't any young farmers using the oil patch, etc. to start/ subsidize their farming habits. I'm not sure though how many first generation farmers there are though. I know there are some but most of the kids I know that go off to the oil patch to start farming have a family operation to come back to. It seems lately, or maybe it's just the stories that make the magazines, the stories I read about starting farmers aren't focused on grain/ oilseed farming but rather concentrating on what to do with less land, such as growing vegetables and selling direct to consumer, greenhouses, that sort of stuff. Like Jazz mentioned prior there seems to be a resurgence in the homestead idea as well, people buying a quarter and living off the land.
Regarding the oil patch I think that there are just less young people going there in general. I think some of the ideas that have been implemented in the oil patch here have been to the detriment of the industry, mainly speaking of the Rig Tech Apprenticeship program, that coupled with a few slow winters hasn't attracted the hands that it used too. From my own point of view it seems more young people are focusing on the trades to start their farming careers, and lots that come from farming families are going to University to study Ag to bring that back to the operation.
The other point I would like to hear about on land values, as someone speculated to me in a conversation awhile ago, is that some of this land is being bought free and clear by older established farms/ farmers. That may be and I'm sure in some cases is entirely true, so I guess my question/ comment is at what point does a person like that decide to sell. If they're buying it from the standpoint that land values are continuing to rise then the bubble bursts, I can't see a lot of them waiting it out, paid for or not, to try to dump land. If they have the opportunity to pull their money out of there and put it somewhere else that has a higher rate of return I can't see them holding on, speaking mainly about retiring farmers with no one to take over that may not live long enough to see another rise in land prices. The same goes for investment companies, it's an investment, if it's not making a return that shareholders are happy with it's going to have to be dealt with. I don't buy into the rhetoric that we had all better buy land now because they're not making any more of it. It seems that land prices cycle and there is always going to be land changing hands.
 

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When volume comes into the picture and their is more sellers the price will drop. It is no different at the auction when they have 10 of something to sell. The price keeps dropping as you run out of buyers willing to pay a premium. At the current prices a lot of farmers can buy a quarter or two but do not have the finnances to buy 20. I think what we are seing for the most part is a quarter here and there changing hands which attracts the premium prices.
 

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When I started farming, the first land I bought was around $700 an acre. Was single, no kids, and worked a full time job (12-14 hrs a day) with inputs nowhere near what they are now, and still had a hard time paying for it some years. It makes me wonder, WTF was I doing wrong back then, and how the he!! are guys doing it now??!! I don't know of a single person here that has started from scratch, all have had some help. I think most of the feel good stories of young farmers starting up in Canada are always in papers like Country Guide etc. and are given the kiss of death. They talk about how good things have been and how well they are doing, but that's only a couple years in, I believe most of them eventually fail,burn out, or just can't handle it any more. I've had neighbors that have written articles and given speeches about how to make a living farming, and on small acres at that, that are no longer farming or working off the farm.

I've been saying for years that these high prices can't keep going, but I guess I'm wrong. Unfortunately for me and my brother, we were just getting started out when everything started going crazy(been happening here for 20 years now) and now I don't see any real possibility of ever being anything more than we are right now. It's frustrating to think we have spent most of our lives and never been able to improve on what dad started 50 years ago, and not really seeing any chance for our kids to make a go of it either. We are probably one of the few farms around that don't have sideline businesses and everyone in the family working off the farm to make the payments. I don't really see the point of working 24/7 off the farm just so I can farm. I guess it's not fair for me to bit#h about things just because I don't feel like working 2 other jobs when it seems to be working for others. I love farming but I'm falling out of love with the way it is heading.
 

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There are a few starting out from scratch around here. Cattle operations, with oilfeild income. Two different types. For one type, profit is a dirty word, they subsidize the operation with off farm income, and have the latest and greatest of everything. Then there are those are genuinely trying to make it a profitable business. scraping by with the bare minimum of everything, old equipment, lack of facilities, but a light at the end of the tunnel. So it does happen.

Kevlar, I am one who did what you are talking about. Worked off farm( and still do occasionally if it fits, have a very flexible option) for most of my career 400 hour months plus farming time was not unusual, using all of the funds (when I say all, I give a new definition to cheap) to buy land to make a viable operation, which it is today. 20 years ago, it worked really well, I tried working mostly full time the past few winters at a very lucrative job, and found that the income is inconsequential compared to the cost of land today and compared to the farm income. Which is to say, it no longer looks to be reasonably possible to work away and buy land to start from scratch or expand.
 

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The only reason i am in mining is that i could not afford to get into farming fixing combines as prices of land out paced my savings, alot of this bought about by a generation who was willing to use the equity built up in the protection era (pay attention all the baggers out there) and expand there operations...because there is a brain disease amongst the worlds population that everything must get bigger? with no real justification..you must be more effecient..and bigger??? sit and think about it for a while..why??

Anyway - through doing stupid hours and taking my ops - bought some land - couldnt run stock as i was away so had to do cropping and that has challenges...lost some years..broke even some years and have made some money on occasion..but i took the time to level and clean..so when i finish mining next year my land is all in perfect shape to swing into any pursuit that looks attractive...that i am glad i took the time to do and will pay big dividends in time...I have had friends try get started with no family help..they all sold. I know alot who want to start..its close on impossible...niche market always make the news..for everyone who makes it 10 fail so its not all roses. We have 1970 commodity prices coupled with 2018 land prices and expenses...

I am not interested making it to full time farmer anymore...i will be happy to be working home next year and play around with an operation that stands on its own two feet financially...

I get cattle this year which will be a nice change, just trade steers to fatten and boot and go again...

I wonder if a slump in prices will occur in some areas, smaller holdings that arent premium - more challenging land i believe may slump...when you take out a group of buyers things change.

Ant...
 

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I wouldn't say there aren't any young farmers using the oil patch, etc. to start/ subsidize their farming habits. I'm not sure though how many first generation farmers there are though. I know there are some but most of the kids I know that go off to the oil patch to start farming have a family operation to come back to. It seems lately, or maybe it's just the stories that make the magazines, the stories I read about starting farmers aren't focused on grain/ oilseed farming but rather concentrating on what to do with less land, such as growing vegetables and selling direct to consumer, greenhouses, that sort of stuff. Like Jazz mentioned prior there seems to be a resurgence in the homestead idea as well, people buying a quarter and living off the land.
Regarding the oil patch I think that there are just less young people going there in general. I think some of the ideas that have been implemented in the oil patch here have been to the detriment of the industry, mainly speaking of the Rig Tech Apprenticeship program, that coupled with a few slow winters hasn't attracted the hands that it used too. From my own point of view it seems more young people are focusing on the trades to start their farming careers, and lots that come from farming families are going to University to study Ag to bring that back to the operation.
The other point I would like to hear about on land values, as someone speculated to me in a conversation awhile ago, is that some of this land is being bought free and clear by older established farms/ farmers. That may be and I'm sure in some cases is entirely true, so I guess my question/ comment is at what point does a person like that decide to sell. If they're buying it from the standpoint that land values are continuing to rise then the bubble bursts, I can't see a lot of them waiting it out, paid for or not, to try to dump land. If they have the opportunity to pull their money out of there and put it somewhere else that has a higher rate of return I can't see them holding on, speaking mainly about retiring farmers with no one to take over that may not live long enough to see another rise in land prices. The same goes for investment companies, it's an investment, if it's not making a return that shareholders are happy with it's going to have to be dealt with. I don't buy into the rhetoric that we had all better buy land now because they're not making any more of it. It seems that land prices cycle and there is always going to be land changing hands.
A lot of farmers like farming and owning land more than money. The ones buying land with cash late in their careers mostly fall into this category and aren’t going to sell if prices drop. They will probably just buy more.

The land can’t go higher crowd should all be sold out of land if this isn’t true. Most of the land is too high crowd owns farmland. Weird.
 

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I don’t think the price of any of the farm product sales is capable of supporting a farm operation, with the cost of everything right now, and I am not even talking about land. Even using cheaper equipment it seems tough, so much infrastructure is required. Looks like 10+ year payoff on assets, just to do your job. No other industry would allow this. But it is fun and a good lifestyle. Off farm job is the norm here. Land appreciation is the only end game from what I can see.
 

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Discussion Starter #40
Land appreciation is the only end game from what I can see.
Thats an interesting statement. The land appreciation game relys on a large number of people who think they can win the commodity vs cost game.

If land here in sask really did appreciate 10% last year, thats more money than I made in 5 years growing commodities. Plus tax free too.
 
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