How much debt to take on poll!

[Bossfarmer]

money is cheap just now and it seems if I'm ever going to upgrade facilities on the farm/buy additional land now would be the time to do so, this will take substantial investment but could look like money well spent by the time its paid off with inflation, I'm looking for a bit of bare land if that doesn't come up then new sheds and an increase in cattle numbers with rotational grazing/extra silage cuts to allow for the extra number, just wondered what everyone on here thinks regarding debt and how much is a comfortable level, the poll is anonymous,

 

[7610 super q]

A zero box to tick would be nice.

 

[Spud]

Pointless threat boss man.
Every farm/situation is different.
If you can justify the investment in your holding and see a payback, crack on - it matters not one jot how much borrowed brass anyone else has

 

[Bossfarmer]

A zero box to tick would be nice.

Added, is that wise when interest rates are so low though? In 10yrs time they could be up over 5% and we all wish wed taken some of this cheap money

 

[Bossfarmer]

Pointless threat boss man.
Every farm/situation is different.
If you can justify the investment in your holding and see a payback, crack on - it matters not one jot how much borrowed brass anyone else has

I was bored, interesting to see others thoughts regarding debt though

 

[DrWazzock]

Just patching up and make do and mend till retirement here. With buyers getting ever larger and more contractual I am not sure I’ll even be able to sell my relatively low volumes of non contracted produce within a few years time.
But if you are young and enthusiastic and think you can expand your way to bigger profits then crack on. I’m over that hill, thankfully.

 

[7610 super q]

Added, is that wise when interest rates are so low though? In 10yrs time they could be up over 5% and we all wish wed taken some of this cheap money

Cheap money still has to be paid back, as does the original purchase. Looking back, most who have expanded have done well, but not all ( Too young to remember the Barclays kerfuffle in the mid 80's ? ). Produce prices still stuck in the 1970's, costs 21st centuary, and rising. Wacky enviro schemes seem to be all the rage for the future. Count me out.

 

[Spud]

Just patching up and make do and mend till retirement here. With buyers getting ever larger and more contractual I am not sure I’ll even be able to sell my relatively low volumes of non contracted produce within a few years time.
But if you are young and enthusiastic and think you can expand your way to bigger profits then crack on. I’m over that hill, thankfully.

Your 52 man, hardly over the hill yet!

I'm 44 and taking the view that the next ten yrs is more important than the ten after that. Build infrastructure now to provide resilience later.

 

[neilo]

As @Spud posted, every situation is different.
There is a very strong argument to batten down the hatches at the moment, particularly if you are a tenant. However, I’d be very happy taking on a million pound debt if I already had £10m of assets sat there and a good business plan.

Would I borrow heavily to buy land at current prices.... not on your nelly. A correction is due again over the next couple of years.

 

[Muddyroads]

I knew someone who used to say that you’re not worth what you have in the bank, you’re also worth what you can borrow. Not sure I entirely agree with the philosophy, but it certainly got me thinking.

 

[Bob the beef]

Take on as much as you can afford and pay back in a sensible timespan, but not so much that it keeps you awake at night

 

[Formatted]

Does anyone actually know Bossfarmer in real life? I just imagine he's some guy with 20 acres on a hill in Wales with a leaky slurry pit full of silage wrap and scrap metal

 

[Bald Rick]

When I see the bank manager approaching ...

 

[Derrick Hughes]

Low interest rates have f c d farming up
A licence to get big and spend your life on a treadmill you can never get off

 

[Spud]

Low interest rates have f c d farming up

Why do you say that Derrick?

 

[Derrick Hughes]

Why do you say that Derrick?

Read my edit
How many 2000 cow herds if interest was 17%

 

[Worsall]

Poll should be Debt to Net Worth ratio. That would be interesting, but means nothing otherwise I'm afraid.

 

[d williams]

I was bored, interesting to see others thoughts regarding debt though

nothing wrong with debt as long as it shows a return and be repaid
Everyone I know that’s made proper money have all used someone else’s money

 

[Spud]

Read my edit

I've just done that. You often comment on your father's achievements - how did he do that without having vision and taking a chance?

Stand still, go backwards.

That's not to say that relentless expansion is the way forward, there's more to building business resilience than farming more acres, but investment is nonetheless required.

 

[Derrick Hughes]

I've just done that. You often comment on your father's achievements - how did he do that without having vision and taking a chance?

Stand still, go backwards.

That's not to say that relentless expansion is the way forward, there's more to building business resilience than farming more acres, but investment is nonetheless required.

Low cost milk production .
And living in your means. Not passing a x amount of millions on interest only to your grandchildren
Were have all the Rex Patterson gone