Is anyone in here involved in farmland investing? ie AgCapita Partners LP, Bonnefield, Assiniboia Capital Corp. etc. What have your experiences been?
In the majority of cases, this is correct, but there are exceptions. My grandparents owned the freehold mineral rights to their farm in Alberta and when they sold the farm, they were smart enough to retain the mineral rights. I know that because my brother and I have been collecting royalties on natural gas being producted from that property for the past four years, and the production company told me recently that they expect the well to last for another few years.In Canada land owners do not have mineral rights.
True some mineral rights were grandfathered in but nearly always they are separate.In the majority of cases, this is correct, but there are exceptions. My grandparents owned the freehold mineral rights to their farm in Alberta and when they sold the farm, they were smart enough to retain the mineral rights. I know that because my brother and I have been collecting royalties on natural gas being producted from that property for the past four years, and the production company told me recently that they expect the well to last for another few years.
The following is a brief explanation of mineral rights in Alberta that I found in a google search:
Most land in Alberta has two owners and two sets of rights. The owner of the surface rights (the landowner) has control of the land’s surface and the right to work it, in addition to any sand, gravel, peat, clay or marl which can be excavated by surface operations. The owner of the mineral rights has the right to explore for and produce oil, gas and other minerals. The mineral rights for approximately 81 per cent of the province are owned by the Alberta Crown and managed by Alberta Energy. The remaining 19 per cent of the mineral rights in the province are referred to as freehold minerals or non-Crown rights and are owned privately by individuals, companies, national parks or First Nations reserves.
Yes the extraction on mineral rights always means some compensation for the landowner but for the average well/pipeline we are normally talking about 20-50k and sometimes much less.And the chances of your land being mined without you making some $$? They need right of way, space for equipment etc unless they're tunneling in
Where I grew up farming the neighbors demanded compensation just from noise pollution of trucks hauling material in from Irving pulp and paper plants, I can't imagine a mine under your land without some form of compensation.. I also know farmers with Nat gas under their land in NB, they certainly weren't too upset about it
There are many things you can do with open land if the opportunity comes up some day. I think it's underrated
Warren BuffettYou could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?
Thanks for your response.If I may, the topic has shifted from farmland investing, i.e. AgCapita to ownership of mineral rights.
I too have been looking into AgCapita and they don't have mineral rights; they buy land, rent the land, take 2% for management expenses, invest the surplus rental income into other land (if any available), hold the land until a predetermined date and then sell (try to sell) for a capital gain, 80% goes to the investors and 20% to the partners.
Farmland likely will increase, but how and when it does sell and then will it sell at the date they want to sell it by are considerations. Your investment is tied up for 4 years with a plan on capital gain - no guarantee.
In a loaf of bread only 5% of the grocery store price is for the wheat grown by the farmer on his farmland. The rest is for the miller, distributor, packaging, advertising, retail store costs and so on. For oatmeal it is something like 2%.100% agreed. The other consequence is the price of food will be driven up as a result.
Well it's a figure of speech but you know what I mean. When you can't sell 2000+ acres of mixed hayfields, forest, and grassland on a lakefront with multiple residences for the same price as a house in Vancouver you know something is wrong.Argo please message me if you're trying to give away land