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Red River Valley | Seems that some posters got into a Pretty good discussion on land values below so I will add a little ( most likely very little ) lol
Through the years one can see that land values tend to move mostly upward, but not in a linear fashion but mostly they stay flat to slightly very slightly higher for long periods of time with a boom and bust cycle every so often.
Land almost never will Pencil out I have through the years purchased 16 Parcels of land with only 2 of them that would pencil out using that days prices and that years yields 3 other parcels would have penciled using that days pricing with normal or avg. yields. As near as I can tell that is far better than most buyers have had a chance at. The key is to be lucky enough or smart enough to know wear one is in the land cycle ?
In the boom cycle everybody will figure a way to justify or pay what ever it takes to own a parcel they want - In the bust cycle nobody will bother to try and figure out what they could possibly squeeze and pay for land.
I have watched land be advertised for sale for more than 9 months at a price that was to high and nobody would pay the wanted price only to have the owners put it on and "Absolute Auction " and get 10% over their Advertised sale price. The only thing I can conclude from that is that at auctions people don't really know what something is worth but are willing to bet that the other buyer does and since I'm a better farmer than him I can justify paying more than the other guy.
As to what is land worth it is whatever a buyer and a seller agree to, but as with many things that is a snapshot in history and can change the very next moment.
the value of land is yet another thing and just as the cost of production is figured many different ways so to can the value of land be figured many different ways.
lastly after the last month the one thing I am certain of is that grain prices will have to be a lot lower than they were at the lows in Jan. for any land to sit Idle as so many were proclaiming it would back then.
should be Interesting to watch how this all unfolds over the next 4-5 years.
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Land Values and how to pay for it
