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Post by Oatking on Oct 5, 2023 6:59:30 GMT -6
Lots of stories now in the news how city folks have negative loan payments. It’s surprising their once 25 year mortgage have ballooned to 40-50 year mortgages!
I remember my dad bought his first half section for 50 dollars an acre on a 35 year term fixed rate.
On my recently purchased section of land I have had to up my original payment to stay in line with my original 25 year variable rate mortgage. I can handle that as it’s just a higher tax write off but I was wondering how city folks manage to come up with the cash as a house makes no income.
I guess , the question I am getting at is , do you think we will see multi generational farm land mortgages or even just homes financed over 50/75 years?
Yeah it’s crazy to think but , it’s hard to think prices will collapse because banks are carrying these monsterous mortgages! If the a lot of people went into bankruptcy wouldn’t that cause the big banks enormous losses just like what happen to some banks in the US and Europe last winter?
Interestingly some land rents are at 200 an acre I heard now. Guys must have given up on the idea of buying and just rent. Lesser of two evils I guess!!!
Hard times coming ! The higher grain prices have sure shielded us from this extra expense,
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Post by OptimallyDismal on Oct 5, 2023 8:36:13 GMT -6
This is what they want, you will own nothing and be happy
Basically you are a renter as your monthly payments amount to life rent scenario.
I think the banks will have very flexible programs, as long as they are collecting enough to make a profit you will keep your property, otherwise you are gone and the next victim takes over.
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Post by jcalder on Oct 7, 2023 6:59:45 GMT -6
People keep paying ridiculous prices, therefore people keep charging ridiculous prices.
It'll all come crashing down eventually.
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Post by Oatking on Oct 7, 2023 8:38:38 GMT -6
People keep paying ridiculous prices, therefore people keep charging ridiculous prices. It'll all come crashing down eventually. I heard 8000 an Acre on three thousand acres in st malo area Calder! That guy has European backing is what I was told! Still if that is true that is a huge farm mortgage! That is good land over there so it should be worth more than our red river gumbo! Strength in numbers is how it won’t collapse! |
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Post by Oatking on Oct 7, 2023 10:46:39 GMT -6
Talked to an older farmer who bought land in the early 80s. He said it is more doable to buy land now than back then! I found that interesting . He said the price of grain back than was hard to gross 80 bucks an acre! Now lots of guys are grossing over a 1000! Every thing is relative. Wheat board made it tough to get full payment when money was needed!
It would be interesting to track interest rates from the 60s up to present times. !
Even this old farmer thought buying land was not out of the question for him at 70!
Some guys say , oh that farm is buying land using old money! Well, it sounds like that old money was hard to come by!!!
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Post by victory on Oct 7, 2023 10:49:10 GMT -6
In general the prices rises are due to inflation. When a certain sector lags the general inflation pace is what can cause trouble. When the powers that be keep interest rates artificially low, that also skews peoples' borrowing thoughts and can get them in over their heads.
I agree with OptimallyDismal that there are many who would like to see government control and next to no personal autonomy. Not sure which book it was, or maybe both, but Animal Farm and 1984 come to mind. We can be thankful for what we still have.
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Post by garyfunk on Oct 8, 2023 7:10:16 GMT -6
People keep paying ridiculous prices, therefore people keep charging ridiculous prices. It'll all come crashing down eventually. I heard 8000 an Acre on three thousand acres in st malo area Calder! That guy has European backing is what I was told! Still if that is true that is a huge farm mortgage! That is good land over there so it should be worth more than our red river gumbo! Strength in numbers is how it won’t collapse! But when does the premium for "good land" become too much? I think I'll just be content with my little farm and stay out of the land baron business, ha. ... And I'm not sure how many farms are grossing over $1000/acre this year. |
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Post by jcalder on Oct 8, 2023 7:21:32 GMT -6
People keep paying ridiculous prices, therefore people keep charging ridiculous prices. It'll all come crashing down eventually. I heard 8000 an Acre on three thousand acres in st malo area Calder! That guy has European backing is what I was told! Still if that is true that is a huge farm mortgage! That is good land over there so it should be worth more than our red river gumbo! Strength in numbers is how it won’t collapse! Holy crap, hadn't heard about that one yet. I must be a cheapskate, I can't see myself paying that kind of money for more work to do. We would net way less money than we do now, it makes no sense. |
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Post by Oatking on Oct 8, 2023 8:49:15 GMT -6
Hard to compete against large investors!
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Post by OptimallyDismal on Oct 8, 2023 9:12:52 GMT -6
I think the future of paying big money for farm expansion like this is corporate farms, that way investors are the key and offshore money can be used to accomplish a lot more than most family farms could ever dream of. As well, being a corporation ensures that the accounting will be more "regulated" as compared to small family farms that sell stuff for cash that may not be declared as income. Here is a "family farm" in Indian Head Sask, I watched a 3 minute harvest video, it looks like a Hutterite colony, with 10 NH combines, 3 carts, lots of trucks. They host "workers" from all over the world if you read the work for us tab. Am I right in thinking this? We are seeing corporate farming all around us here, with teacher's pension etc being the majority shareholders, and straight up investing opportunities with companies that specialize in setting up corporate farms. Also there are the ones that more senior farmers combine their farms, select a farm manager, and go corporate. www.delagefarms.ca/ |
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Post by kenmb on Oct 8, 2023 9:53:58 GMT -6
Lots of unknowns with corporate farms. If there is a downturn then investors are easiest backers to cut and run where as owners are least likely to sell out. And this here is the #1 concern with anyone using net worth as the way to gauge how their business operates. If investors ever cut and run you can be pretty sure there isn't enough old farmers to pick up all the sell offs and stabilize prices.
So we then see if the investors are really legitimate investors or if it another avenue of system control like we see with Evergrande, WeWork, Black rock in real estate and such. Funny how businesses that are loosing propositions keep loosing indefinitely. Corporate farms may be in business when everyone one else has tapped out. So no way to guess how things play out.
But if we take proven history as an example, if corporate farms were a real thing in say 1976 to 1982 and we took historical land values from 1976 to 2005 and looked at the profit/loss statements or return on investment for a corporate farm of that era then it would be no surprise we didn't know of corporate farming in around 2005. There has been a few corporate farms go tits up in recent memory, wasn't One Earth Farms considered such a thing?
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Post by wheatking76 on Oct 8, 2023 11:36:16 GMT -6
ya its real interesting out there and i don't think it the interest rate is settled yet, people seem to still be spending like there's no tomorrow,
talked to a few older farmers over the years an they figured interest rates would only have to go up 1% and the amount of bankruptcy there would be would be crazy well i have seen any of that yet so people are obviously making it or borrowing more also the amount of people told me the 80's interest rates literaly just about finished them, few talks with banks over the last while its still shocking how easy it is to get money outta them, i think were in for very tougher times ahead
We'll never understand some of these corporate farms and how they do it and they'll never tell you either, just interesting to watch, but i figure the ritchie catalog will be full come spring with the older fellas saying screw it i'm out rent it out for a good buck and head for the lake
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Post by cptusa on Oct 8, 2023 12:15:45 GMT -6
I heard 8000 an Acre on three thousand acres in st malo area Calder! That guy has European backing is what I was told! Still if that is true that is a huge farm mortgage! That is good land over there so it should be worth more than our red river gumbo! Strength in numbers is how it won’t collapse! Holy crap, hadn't heard about that one yet. I must be a cheapskate, I can't see myself paying that kind of money for more work to do. We would net way less money than we do now, it makes no sense. $8k won't buy bad ground here. $15K+ for average and up. Saw a land auction in Missouri for short of $35k/acre, two farmers bidding, zero development potential. I just bought a good adjoining 80 for $17k, too high but looks like a bargain. |
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Post by Oatking on Oct 8, 2023 13:15:38 GMT -6
Holy crap, hadn't heard about that one yet. I must be a cheapskate, I can't see myself paying that kind of money for more work to do. We would net way less money than we do now, it makes no sense. $8k won't buy bad ground here. $15K+ for average and up. Saw a land auction in Missouri for short of $35k/acre, two farmers bidding, zero development potential. I just bought a good adjoining 80 for $17k, too high but looks like a bargain. Cpt USA, 3 years ago I bought a couple of red river lot parcels. 6200 an acre. Seemed like a lot and took a ribbon from some neighbours who heard I paid too much. Well now 8000 won’t do it anymore. I was offered more three years ago but gave the buyer the name of a friend who I knew was serious . Yes looking back some nights or times in the tractor I wished I grabbed it all but , I want to have a life too and enjoy bomber season tickets and new farm trucks. If you extend yourself too much the interest alone will clean your clocks . I know my wife doesn’t care if we have a half section more! Our farm is worth more but She makes more than me!!!! Anyways , heard on cbc , 25% of house mortgages are coming due now. Going from 2.5 to 7.5 might be all it takes to break the camels back! I know first hand my land purchase on my variable rate went up 30 grand a year! That was to keep it on pace with the original pay down! Nobody really talks about capital gains exemption . Curious cpt USA . In Canada we have 1 million before being taxed. What is the American rate for an individual?  ?? |
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Post by kevlar on Oct 8, 2023 13:37:56 GMT -6
So with those prices, how do you pay for it.? There is nothing you could grow here that would even pay the interest let alone the principal. A bank wouldn’t even entertain the idea of lending money for something like that. I think Captain must grow a lot better crops than he tells us 😉. I know you guys down south blow our doors off when it comes to yield, but our hunting and snowmobiling is way better! Only that’s another expense.
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