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N FLA | Do you think some of these could be explained by farm ownership vs farm rent? I have absolutely no idea of the stats, but
you said that canadian farms have 4-6x more debt than american farmers, I would think this could be explained by a larger portion having mortgages on land. And Equity to income in Ontario was 293 to 1. I dont think this means that a farmer is spending 586 per acre to make a 2 return, but that their must be alot of owned land to have this level of equity. I would easily believe someone has 5860 per acre in land and is making a 20$ return, especially if as you say, P/E has skyrocketed. Price of land (Equity) has probably gone up, earnings have maybe gone down a little or unchanged.
Just throwing it out there, because I work with some operations that do not own a thing, all rented, and would have little debt, You can plant alot of acres for 1 million operating loan, but it doesnt buy much land. | |
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In the next downturn
