So you grow profitable crops but your neighbour grows houses

It is not the people who are considered to be "good farmers" - people who grow profitable crops and run an efficient crop production business - who grow their business and are successful over the years.

I was talking to a friend the other day who is in the process of selling around 100 acres of prime development land for something in the region of £900,000 / ac. He did not have to be a great farmer to make this money, rather he stands to become far wealthier than any of his neighbours simply by an accident of location. He could have been producing 1 t/ac wheat with stratospheric costs for the last 20 years whilst his neighbour could have been producing 4 t/ac every year with as low a costs as anyone in the industry and it would not have made jot of difference to the likely future trajectory of the two farms. In the long run the 1 t/ac farmer will subsume the better farmer next door.

The story is far from unique; the majority of the largest landowners near us are those who have at some point sold off land for development. They are the people with 5000 acres and not because they won the Farmer of the Year award.

Now of course the smaller farmer next door doesn't have to sell his land just because the person next door has money to spend but I think it would be naive to think that wealthy neighbours have no effect. You only need a few people like this who are determined to buy land and suddenly your farm becomes worth a lot more were it to be put up for sale. You are a farmer with a son and two daughters; the son would like to farm but the daughters would like their money out. The higher the value of the land relative to the rate of return on the invested capital the less likely the son is going to be able to farm. He might be a damn good farmer but that will alter the rate of return only slightly in the face of land values at 12k/ac. The likely outcome is that the farm is sold to house grower next door.

The income from selling land for development is so disproportionate compared to 'normal' farm income streams that people who just grow wheat, barley etc. cannot hope to compete in the long term. Discuss.
 

Walterp

Member
Location
Pembrokeshire
There is another, more positive way to look at this conundrum -the three steps to Heaven are:

1. welcome the uplift in values, and;

2. sell the place for more than it's 'worth' to wealthy neighbours, and;

3. and buy a bigger, better, place somewhere that has no such uplift.

There. Everyone's happy.

So why are you complaining?
 
There is another, more positive way to look at this conundrum -the three steps to Heaven are:

1. welcome the uplift in values, and;

2. sell the place for more than it's 'worth' to wealthy neighbours, and;

3. and buy a bigger, better, place somewhere that has no such uplift.

There. Everyone's happy.

So why are you complaining?

Firstly, I am not complaining. Did I say that I was the good farmer next door? No, I didn't.

Secondly, the problem I see with your point 3 is that there's no requirement that the house grower has to only be interested in the land next door. He / she can purchase another farm on the other side of the country, as too can the person who builds vacuum cleaners or someone who has a rather large construction business. Maybe, as Elmsted has written elsewhere, we should all sell up and move to Eastern Europe.
 

franklin

New Member
Once that 100ac becomes houses, the farmer next door to that will be next in line for the windfall.

Many of the bigger farmers may not be farmer of the year, but if they got big without grandad buying a load of land in the 30s, then they have probably done it by being good buinessmen.

Daughters wanting "their" money out is the bigger threat to farms. Or the other son who doesnt want to farm but expects a payout.
 
Once that 100ac becomes houses, the farmer next door to that will be next in line for the windfall.

Many of the bigger farmers may not be farmer of the year, but if they got big without grandad buying a load of land in the 30s, then they have probably done it by being good buinessmen.

Daughters wanting "their" money out is the bigger threat to farms. Or the other son who doesnt want to farm but expects a payout.

In your experience how many of the larger farmers near you fall into the 'grandfather's 1930's purchase' category and how many fall into the 'growth by being a good farmer' category?
 

Walterp

Member
Location
Pembrokeshire
Daughters wanting "their" money out is the bigger threat to farms. Or the other son who doesnt want to farm but expects a payout.
Yeah, what's this with "their" money?

It isn't anything to do with them, is it? Unless the children helped build up the business, what's it to do with 'em?

Are we talking spoilt farmers, and their equally spoilt children?
 

franklin

New Member
In your experience how many of the larger farmers near you fall into the 'grandfather's 1930's purchase' category and how many fall into the 'growth by being a good farmer' category?

Most of the large farms here are big estates that are either historic, or bought by the grandfathers. But where did the grandfathers get the money? Not a lot from the farming. I dont know many that grow because of being good farmers. Big contracting outfits seem to be a mix of good farming and good businessmen. Although now it would seem that

In my mind, those farmers who are "farming" the land best are often tenants. No land capital growth for them, so they push harder? Would that be over-general?

Am I a good farmer? Probably not. But getting there. And good enough at business. I think my family have made more from buying right and selling some for houses than all the years of growing crops.

Yeah, what's this with "their" money?

It isn't anything to do with them, is it? Unless the children helped build up the business, what's it to do with 'em?

Are we talking spoilt farmers, and their equally spoilt children?

Two routes for small or middling family farms - you go the Indian way and divvy it up every time someone dies. Or you pick one child and give them the farm. Sit the others down and tell them why, and make sure the one who gets the land is aware of their duty to support their siblings if needs be. Educate your kids and send them on their own way. If no-one genuinly wants to farm, flog it early and enjoy the cash yourself. Thought the old way of one to the estate, one to the military, and one to the clergy worked fine.

I would be very, very upset if all this work to build up for the future was split up and sold off. I'd rather give it to someone not related in its entirety.

And if anyone wanted 100ac for building, I would have that money spent within months on more land. And perhaps some strippers.

Lincolnshire is approximately 1,500,000 acres. So if Dyson has 15,000ac here now, that is 1%. Mr Bourne must have the same. For context the Brocklesby Estate in 1875 was over 60,000 acres. By the end of WW2 it was c30,000 acres. Was any of this from good farming? It took 500 years to build up, and the 1st William Pelham got from 1000ac to 11000ac in 40 years from a military career. I dare say that that is very much similar to both Mr Dyson and Mr Bourne, both who have done well in their business and invested in land. It is a historical pattern of successful businessmen buying land. And always some kind of agent taking a % for centuries.

Plus ca change, and all that.
 

rob1

Member
Location
wiltshire
Have seen a few sell for building, good luck to them , have had several offers over the years for mega bucks never even been tempted to sell, love where I farm and would only sell it if I needed money for medical bills for my kids or grandkids, what they do when im gone is up to them. Not sure that the sellers of land for building are any happier, some of the ones I know arent, and always seem to be desperate to sell the next bit, a bit like lottery winners sometimes. Money does not make you happy, but each to their own
 

smbflame

Member
Location
near bridgnorth
money gives you freedom to do what you like , if i had loads of cash by some land ,hire good farm lads , buy a island in the Caribbean have a great time lol .on a serious note best of look to farmers who cash the land in for building , take it easy
 

SFI - What % were you taking out of production?

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Red Tractor drops launch of green farming scheme amid anger from farmers

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As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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