Farm Land?

No . The opposite. These returns are achieved in low intensity 11-13 inch, large scale, marginal dry land cropping country Who are your clients ?? 5% has been standard for leasing. Much Higher returns are acheivable for share farming even much more than 8%. The more marginal more achievable a sharefarming agreement is. I had a sharefarming agreement with a Lentil farmer a high risk crop grown for agronomic reasons with the hope of maybe covering costs with subsequent crops getting maybe a 30% yield increase. The crop had timely rain and good prices returned $800 an acre I got a 200% yield for my share.

 

I've got no doubt that higher returns on your capital are achievable with sharefarming because you dont own the land. You're talking return on working capital. This thread is about investing in farmland.

 

I think you misunderstood Wilko. I believe Ruby had a share farm agreement with another party who did all the work on her land. It is very common. You don't really have a clear rea lestate investment then as opposed to having a lease. I think a share farm agreement is more like a partnership with all the risk that comes with it.

 

Either way it doesn't matter. Was the 200% yield based on the value of the property or the contribution to the sharefarming agreement.

 

I do own the land. The thread is about investing not farming ? The Leasee/ partner owns the the working capital they already have debt it is where they get the best use of their capital and may not have, or may not meet servicability requirements to buy land , they may be able to get 30% return spending money on fertilizer. Economy of scale reducing cost per acre, cost per tonne, increases return on fertilizer. The the owner outsources the farming operation because their funds are tied up in the land and they dont have the funds, economy of scale and of more relevance, the agronomic,mechanical, technical or marketing knowledge, desire , inclination or ability to accquire it. They prefer to spend their time doing other things such as nothing, or accquiring knowledge in other lucrative fields.

 

The 200% is based on acquistion cost of $120 an acre, my 25% share of the crop was worth $200 , i rounded up quickly because I couldnt be bothered to work it out exactly and I dont really care how much, as long as I am making more than costs I dont care. The yield on value at the time was about 25%

 

Thats more like it. It's not 200% return it's a 25% return on current value as a one off with a high value crop where everything came together.
Was the crop grown on 100% of the property or only one paddock?
How many failed crops have you had in the last 10 years?
Is there any grazing on the property?
Cherry picking returns is misleading to those who dont understand farming.