Farmers

Perhaps it's easier to lease a dairy farm? In fact I'm sure it would be? The public perception is that it is bloody hard work. Getting up early in the frost and wet and not being able to take holidays. So I could well imagine that a dairy farmer who's getting on in life, say 50 years old, has a 10 million dollar asset in land and dairy, payed off and debt free, and has had enough of it, would lease to some young bloke who would make a go of it, and deservedly so.

It is simply a far easier lifestyle in grain growing. My dad who's 75 could have retired 25 years ago if he wanted to, but he just wants to continue. Mind you, him and mum have been in Europe for 6 weeks and are due home soon and they holiday all the time, so they are not missing out. I look at all my neighbours and it's the same. Next door, the dad is 83! He still helps with the planting and harvest, bloody hell, he's just driving a machine up a row with auto steer! But he spends half his time on the coast or overseas and just helps when it's busy, just like my dad.

Just saying, but perhaps that's why there's not much leasing going on around here?

See ya's.

 

Wow. Funny you should mention that. He's just bought [and I'm talking last week] a cattle farm only 6 ks from me. Only worth 2 million! Mostly arable though but I think he's going to grow fodder for his horse studs?

Seems strange though that he'd buy something that small?


See ya's.

 

Sure sounds good to be 75 and free like that to come and go . My own father turned 74 only two days ago and is in similar position . They travelled a lot several years ago but don't go too far now .

I agree , dairy can be a tough gig . However , the pace of change in technology with robotics and automation is making the sector a far cry from what it once was . It's very challenging to do well but I suppose you could say the same for a lot of things .

From an owners point of view , I would see a reasonable amount of risk in leasing in dairy , but it is common . Good operators to lease to are hard to find .

 

From an investment point of view , I see dairy as a hard one for most investors . Much trickier than say , beef , grain or other broad acre enterprises . Management is going to be key and if you get it wrong there then , you know what happens ..

Which is why I suppose deep pocketed investors like Gerry and Gina try to partner with successfully managed operations with a decent track record and tie them in to the general business risk ?

Before the GFC a few farms down our way were sold to corporates and I think Macquarie bank was one ? They paid top of the tree prices and mostly got less than ideal management . Some were a disaster . A few lessons must have been learned .

There is supposedly talk of at least one listed dairy business coming into the area and purchasing 50-70 farms . It's been talked about for over a year now . Investors from China were supposedly involved , funny how that's all gone quiet !

 

How much land for 2 mil ?

I guess if he's looking at land near you you might see him come up the drive with the agent soon with the written offer that you can't refuse , ha ha !

 

Well actually I'm only guessing it went for 2 million? Might have bought more? That's about what I'd reckon it would have been worth? It was about 600 hectares I think? But not the prime black soil plains that's worth the most around here though, it was all lighter country, mostly arable, but some with trees and rocks and worth not much. No house or buildings or any infrastructure besides cattle yards.

See ya's.

 

Hi T.C,

I'll dig out and read your old farming threads on Somersoft. How much return Gerry would get from his $2m farm? Sorry about my ignorance but are yields in farming businesses (not hobby farming) calculated as other commercial operations e.g. should be aimed to at least 8%?

 

Many primary producers wouldn't get an 8% return . I know they probably should be but in reality I don't think a very large % make it . Lot of reasons like droughts , debt loading , terms of trade , management mistakes and even bad luck .

I would imagine Gerry would be more interested in how his horses go and if TC is right he can maybe save a fair bit by growing his own horse feed and not get screwed over buying it in at inflated prices . Just a guess .

Good quality farmland seems to grow in value over time so I would think it might make it a good long term investment , maybe .

 

I would imagine a $2m farm for Gerry would be a hobby or life style thing. Returns on farm land vary greatly, you can have high input high returns, or lower risk lower input lower returns. Even if you do little more than break even you and earn living expenses you should get CG average of 8% p/a. 5% of land value is considered a fair price for lease, but of course it depends on demand, or a 25% share of the produce if you want to share farm, which may be able to be negotiated up to 33% Farmland can be an excellent investment overtime, its better than negative geared blue chip residential investments. My farmland is much better than the crap Micheal Yardney pushes.

 

I have known some farmland to be on the market more than ten years even 15 . Not unreasonably priced . That's hard if you want to retire into town and do a bit of travel etc .

I've also seen well developed property's with good shedding , housing and well established agronomic potential sell for not much more for the bare block next door !

 

I'd very much doubt it would be anything to do with hobby or lifestyle farm? As far as Gerry would be concerned, this block of dirt is out the back of nowhere. It's not particularly attractive, not on a river, not near the city, it's at least 50 ks from the famous horse studs of the Hunter Valley or 150 ks from the famous vineyards of the Hunter.

I reckon Pursefattener is correct. Just a fodder farm for his horse studs. But he's moved far enough away so that he's buying the land at real farm values, not inflated values that you'd pay being where his horse studs are, as in not far from the big smoke and near more closely settled vineyards and what not.

See ya's.

 

Do you think other investors take much notice of where the rich invest or do you think there's more interest or not when someone like that invests in farmland ? Perhaps none ha ha ..

All the mumbo jumbo about foreign investment doesn't help the market generally IMO .

 

I wouldn't take much notice. It's just a plaything for them. Jerry has probably not seen the land he bought. It's possible he wouldn't even know about it. Probably just some manager of his horse stud assets has just done his job because an accountant who works for Jerry said it was a good idea?

See ya's.

 

Interesting read >http://adf.farmonline.com.au/news/n...-news/farm-production-to-hit-57b/2743369.aspx

 

I thought this was interesting.

http://www.fwi.co.uk/arable/photos-world-record-wheat-yield-harvest.htm





"The world wheat yield record was broken on Saturday high on the Lincolnshire Wolds with a bumper crop of 16.5t/ha, and Farmers Weekly was there to witness the event.

The yield on Tim Lamyman’s farm beat the five-year-old record set by Mike Solari, who grew a 15.7t/ha crop in New Zealand, and it was 2t/ha above Mr Lamyman’s previous UK record achieved last summer."


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The highest yield I've ever got from wheat was 8 tonne per hectare. And that would be about the highest possible yield it could ever go with the climate I have. To get 16 tonnes per hectare you need to be in the right latitude. So that would be about Tasmania, Southern NZ, or England. To get 16 tonnes per hectare the wheat has to grow for 10 or 11 months of the year. Where I am in northern NSW my wheat grows for 5 or 6 months.

See ya's.

 

I work for a company that buys a bit of grain (circa 1M tonnes I think) - that sort of yield would put some smiles on dials

 

There's a bit going on in agriculture at the moment with some not bad prices getting paid for the odd farm down our way . Interesting reading about the VDL company in North west Tassie going for about 250 Mil !

Also a new company with deep pockets has options on 50 -60 farms in our area and in the process of raising capital to build factory's . If or when that comes off it will be a game changer IMO .

Lots of money to be made if you're smart enough .

 

ooooo - something we looked into recently that might suit ... snails ... good old garden snail breeding and growing for a desperately undersupplied restaurant trade.

We did look into this ourselves, but decided we didn't need "another" job on top of the 5-6 we have already.

just google "snail farming Australia" or have a look at www.snailfarming.net

 

We have a snail farm here on the sunny coast hinterland

Have a looky here. Apparently it is pretty lucrative Glasshouse Gourmet Snails