Another FBT thread

[No5]

We are currently paying £85/acre on a 1 year FBT for 150 acres of grade 3 very heavy arable land with blackgrass problems. BPS is ours. No buildings or amenities. Currently getting about 2.5t/acre wheat but this is with PK indices of 1-2 so will see some improvement as these are increased. We have been offered a 5 year tenancy but with an increase in rent to £100/acre. Landlord believes this is cheap as he says the going rate should be £130/acre. The added security of the 5 years is attractive but at what price? What do you think the rent should be for this block of land?

 

[beefandsleep]

Clearly not profitable at those yields and current prices so my advice would be to say thanks but no thanks

 

[willy]

This is at least more realistic than many around, I would just be careful of the exit from euro and bps only being paid till 2020, which is effectively end of 2019

 

[Nearly]

Is it worth agreeing a rent at say 'land area payment' plus £40/acre (£100/ha) to cover for future?
I'm looking at similar as landlord.

 

[beefandsleep]

Sounds a very fair approach, £40? Obviously depends hugely on the quality of the land.

 

[Nearly]

Sounds a very fair approach, £40? Obviously depends hugely on the quality of the land.

Just included as a figure. Obviously it's much more than that.

 

[Renaultman]

Some around here are doing at 1/2t of wheat no BPS

 

[grainboy]

Now see why I bailed out last year, was in a 10yr fbt, paying £143 Ac, they then wanted £185 ac, grade 2 average wheat 3.25 ton ac

 

[Beef farmer]

Black grass and 2.5 ton/acre? I'd pay £80 an acre to wash my hands of it. You must be subsidising that with other land?

 

[No5]

Black grass and 2.5 ton/acre? I'd pay £80 an acre to wash my hands of it. You must be subsidising that with other land?

Yes, we own 375acre and contract a further 150.

 

[buffalo_soldier]

100 - 70 = 30
2.5 x 130 = 325
325 - 30 = 295.

The experts think V.C.'s around the £250/ac mark https://thefarmingforum.co.uk/index...-average-cost-to-grow-combinable-crops.16606/

295 - 250 = 45
45 x 150 = 6750

Wow, i agreed with your landlord that it is cheap when i first read it.

45 / 2.5 = 18
18 / 130 x 100 = 14% .

Pass.

 

[gone up the hill]

This is at least more realistic than many around, I would just be careful of the exit from euro and bps only being paid till 2020, which is effectively end of 2019

Imo the BPS will be paid in 2020 as well for the simple reason 2020 there will be a general election in May and for one the Gov will not want to be introducing a new scheme just before an election..

Ref the OP, why doesn't he switch to spring barley?? you need at least 3.5t acre of wheat to be worth bothering with..

 

[The Ruminant]

100 - 70 = 30
2.5 x 130 = 325
325 - 30 = 295.

The experts think V.C.'s around the £250/ac mark https://thefarmingforum.co.uk/index...-average-cost-to-grow-combinable-crops.16606/

295 - 250 = 45
45 x 150 = 6750

Wow, i agreed with your landlord that it is cheap when i first read it.

45 / 2.5 = 18
18 / 130 x 100 = 14% .

Pass.

can you hang some labels on your data please - I've been up since half-four and am too tired to work out what each line of your calculation is showing!
Thanks

 

[buffalo_soldier]

can you hang some labels on your data please - I've been up since half-four and am too tired to work out what each line of your calculation is showing!
Thanks

Haha, sorry. Was only ball parking it out of interest as those rent levels would be cheap round here.

My sums give a £45/ac return after costs assuming a wheat price of £130 with the rent at £100. Probably a bit out as i guess it wont be in wheat for all of those 5 years.
The 14% is the way i would see a safety to variance. If prices dropped or inputs rise by that figure or a combination of both you would be in negative margin territory.

Almost wants grassing down and 500ish sheep putting on.

 

[The Ruminant]

Haha, sorry. Was only ball parking it out of interest as those rent levels would be cheap round here.

My sums give a £45/ac return after costs assuming a wheat price of £130 with the rent at £100. Probably a bit out as i guess it wont be in wheat for all of those 5 years.
The 14% is the way i would see a safety to variance. If prices dropped or inputs rise by that figure or a combination of both you would be in negative margin territory.

Almost wants grassing down and 500ish sheep putting on.

With you! Thanks

 

[Beef farmer]

Haha, sorry. Was only ball parking it out of interest as those rent levels would be cheap round here.

My sums give a £45/ac return after costs assuming a wheat price of £130 with the rent at £100. Probably a bit out as i guess it wont be in wheat for all of those 5 years.
The 14% is the way i would see a safety to variance. If prices dropped or inputs rise by that figure or a combination of both you would be in negative margin territory.

Almost wants grassing down and 500ish sheep putting on.

Are you gambling in straw sales to cover fixed costs?

 

[wasted years]

Are you gambling in straw sales to cover fixed costs?

I would argue that there is no such thing as a fixed cost when looking at bare land on an FBT for cropping.

 

[Beef farmer]

I would argue that there is no such thing as a fixed cost when looking at bare land on an FBT for cropping.

Then the op should sell his own Farm. Just Farm fbt land and have no fixed costs.

Sounds stupid doesn't it?

That's because it is.

No wonder rents are where they are of you think you can take on fbt after fbt and not increase your fixed costs.

 

[Beef farmer]

The grain from your fbt, do you not have to make a phone call to sell it?

Oh you do. So your phone just got used more.

 

[wasted years]

The grain from your fbt, do you not have to make a phone call to sell it?

Oh you do. So your phone just got used more.

Correct,phone use is variable according to enterprise size.