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Top rent price in your area

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So a landlord informed us that a neighbor offered him $130 an acre for his quarter. This isnt the best land at any means. Lets just say we dont seed peas there because of all the rocks. I cant justify it and was wondering what top rent is in other areas currently? I think he is a fool for bidding that high but maybe I am also a fool for not getting out of farming and renting all my land out for that price.
 

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For $130 they can rent mine too, I would guess that there’s not much return on equity with that much budgeted for rent unless they found the formula for 80 bushel canola and 100 wheat.
 

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There is no money left for you the farmer at $130 most yrs. If you have to pay that you might as well own it and pay for it. At $10 canola and input and operating costs you are spinning your wheels for nothing. Wheat is a joke for price. I would let him have it and with our economy the way it is you will likely get it and more back from your neighbor down the road. This pandemic is scarey as to where the grain markets could remain for yrs. Is it that important that piece of land to your operation?
 

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In our area she's a drive to hit a 100,000 acre club. Guys are greedy, and will cross the RM for a quarter if they know they can put their foot in the door in that area. Problem is most everyone has the same idea, and its driving up even marginal land worth $40 acre, to $80. Better stuff is well over a $100, but those guys are being bankrolled by a richer source, sometimes parents or investors. I just look at it and say, go for it!! One guy was belly aching about not making any money, and his spending habits having slowed down a bit, so hard to feel sympathy. Good for the landlord, but honestly ridiculous for the average farmer to grab a few more acres to cover a hired man, or maybe some newer iron. But if your seeding canola....
1. Seed @ $60
2. Burnoff @ $7
3. Fert @ $80
4. Incrop @ 40.....including fungicide
5. Seeding @ $20
6. Sprayer cost @ 15...multiple passes
7. Harvesting @ $20
8. Rent @ $120
9. Misc expenses @ 30
So $412 per acre, and that doesn't include getting it trucked, so average out at 43, and hope the hell you get #1 and get it off, with no heating, and premium shape. You stand to make a whopping $18 a acre!! Now if you get 50, your golden, but average is what I set my farm at, cause I've had some real **** over my course of farming. Last year my best dirt caught a frost, and my canola made 28 with 6% dockage in fines. There was a stand for 50, but that didn't make me feel any better, cause the reality was what was in the hopper.
 

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Perhaps not this year but corn land rent in the Midwest in the past would be way over your poll scale top.
 

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Discussion Starter #9
What would land trade at in this area?
Its around that 5000-5500 an acre.

This isnt a deal breaker for us, if he wants it he can have it. When you take into account the averages for yields in the area, I dont know how some guys are using there pencil
 

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Its around that 5000-5500 an acre.
If the land is truly worth 5000 an acre, and you purchase it 0 down with your own land collateral you would be looking at over a 300 dollar an acre land payment plus land taxes over 25 years. Forget 50 bushel canola you will need 75 bushel canola for that land to stand on its own. 130 is reasonable if the land is good quality and if you don't want to commit to a 25 year mortgage.
Its a tough decision to buy when you are around 50 years old and the land you are renting suddenly is placed on the market for 5000 an acre. I often wondered what is a normal load of farm debt compared to others, especially if you have to compete against Hutterites. Debt to equity ratio is a good gauge how healthy your farm is.
Is .15 to low? I see some neighbours and I would be worried to be at .5 but that's risk management. What is an praire farm average ratio?
I agree with grizzer, those number he listed are a real snap shot of farming canola in Canada, and if you fall below your cost of production it can take years to get back what you lost from rented land.
 

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Any chance your landlord is just fishing to see if you will bite on a little bigger hook? 60 would be a good avg around us, to the north not very far you start seeing 75-80 some a bit more.
 

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Ya very true but I guess I am more curious about prairies rent though.
$130 sounds like corn country. We’re comparing apples to oranges. Then again stuff not far from here is apparently pushing $100 and lots of better ground I know in the $75 range. What it comes down to is partially how productive and sure you’re going to see consistently see good return but my experience is who and how many want it. Most likely some pockets of decent ground around the country that rent reasonable as much as marginal that rents too high. Location location! Wasn’t long ago when land in eastern sask rented for taxes.
 

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Perhaps not this year but corn land rent in the Midwest in the past would be way over your poll scale top.
Thats cheap. If you got a pivot and can grow potatoes or sugar beets think your pushing over a grand
 

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What are the average yields? Ours are around 30 bushel for spring wheat on chem fallow, on a good year, by the better farmers. Cash rent is often around $20/acre for every acre. Half is usually fallow. County average yield is around 20 bushel. So figure $40/acre for cropped acre. That doesn't pencil very well either.
 

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What are the average yields? Ours are around 30 bushel for spring wheat on chem fallow, on a good year, by the better farmers. Cash rent is often around $20/acre for every acre. Half is usually fallow. County average yield is around 20 bushel. So figure $40/acre for cropped acre. That doesn't pencil very well either.
we’re about the same maybe a bit better

35-50 in my area.
 
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