Farmers Advised to Think Long Term on Land Prices
St. Jean Baptiste recently hosted a Farm Days presentation from Dan Caron, a farm profitability expert. During his presentation, Caron advised farmers to “adopt a long-term view” when deciding whether or not to purchase new crop land.
“We have to start making decisions based on longer-term averages, not looking at the year before,” said Caron, according to a recent article in the Western Producer. “What happens if we look to the year before? Well, we end up with $4,000 per acre land and $9 canola.”
Caron went on to explain that land debt and related payments need to be assessed with an eye on long-term sustainability, and not just on what last year’s prices could command at market. By not planning for the long-term, Caron cautioned, farmers could be setting themselves up for marginal land returns. According to the Producer,
Caron acknowledged that it is difficult to figure out an affordable price for land. Some farmers might regret not buying land a few years ago because they thought it was too expensive, but since then, returns have been exceptional and land values have soared.
While Caron was talking predominantly to an audience of Red River Valley Farmers, his advice holds true for farmers here in the Parkland. If you’re a farmer here in the Parkland, what do you think of Caron’s advice? Let us know!