Trading your farm in for a bigger model.

But if your sure its going to be 20k in the future why not borrow and buy as much as you can ?

Because youve still got to pay for it haven't you and my point all along has been buying land at these prices and farming it cant pay for it so whats the point. If you have the cash sat their doing nothing then I would buy at these prices for sure.
 

Elmsted

Never Forgotten
Honorary Member
Location
Bucharest
why not do like Elmsted 2 week work in the spring and 2 weeks work in the harvest , (y)

After last winter we have had reached conclusion same as someone I met at Kinsey conference farm North hemisphere and south keep ones self busier.And a bit of teeth grind if two weeks for planting, two weeks growing and two weeks harvesting. Then that = 6 weeks. Reality check needed. Takes 6 months working and six months trying to keep warm and dry.

Land yes totally but Gold ? cant eat it, make bugger all with it, just a historic view that it has a worth because its shiny and the ancients used it as currency, thats why I said it was a worry when he puts his money into land that takes time to sell etc rather than stocks, futures etc that can be traded in seconds. I would say buy land if you can afford for the price to drop 20/30%, the price will rise over the long term but who amongst the farming community can ride a big fall on borrowed money

Motive simple like carpetbaggers you can pick it up and run with it when sh!t comes to shove. Whereas difficult to put a hectare in the bag. Fluctuations of 20% so what it is the consistent long term that counts. Same as land.
Buffet knows better than most that stocks, shares and even printed cash ultimately has no more worth than the recycling value of the paper they are printed on

Land, gold etc are real and finite - they have real value and ALWAYS will do regardless

Spot on. And as long as Buffet, Dyson and other like minded individuals & Companies take the same view least I get a job along with others running their toys investments. Which keeps the refrigerator full
 

Clive

Staff Member
Arable Farmer
Location
Lichfield
Because youve still got to pay for it haven't you and my point all along has been buying land at these prices and farming it cant pay for it so whats the point. If you have the cash sat their doing nothing then I would buy at these prices for sure.

you can pay for it - if you have a asset you can borrow against you can get the cash to buy no problem and the cost of tat cash is MUCH lower than the potential uplift in capital value you thing are possible - what you can make out of it farminh it is almost irrelevant here. Farming and land ownership have no relation to one another at all

principle is the same

If your SURE its going to be 20k and you can buy today for 12 and borrow that for say another 1 over the period of the loan you will make 7k/ac

I would say the real reason your not buying like most is in truth there is no certainty it will be 20k per ac just a feeling and a felling is not enough to take risks over really
 

Daniel

Member
you can pay for it - if you have a asset you can borrow against you can get the cash to buy no problem and the cost of tat cash is MUCH lower than the potential uplift in capital value you thing are possible - what you can make out of it farminh it is almost irrelevant here. Farming and land ownership have no relation to one another at all

I could borrow a million quid against the farm to buy a classic Ferrari that appreciated in value if I wanted, but given the farm nor the Ferrari would generate the sort of cash needed to finance the repayments on it, to all intents and purposes I can't PAY for it.
 

Clive

Staff Member
Arable Farmer
Location
Lichfield
I could borrow a million quid against the farm to buy a classic Ferrari that appreciated in value if I wanted, but given the farm nor the Ferrari would generate the sort of cash needed to finance the repayments on it, to all intents and purposes I can't PAY for it.

I would think your more likely to be able to farm to pay the interest on a loan over 20-25yrars than you are to be able to pay some of the rents I have heard of recently ?

And if you already have 100ac say to borrow against to buy another 100ac you have income from 200ac total to help you make the repayments
 

will l

Member
Arable Farmer
But in other countries is there a relationship between land price and farming? Can farming the land actually pay for it abroad?
eg
France; 13 tonne mais ha @200euro tonne after drying charges,
hard wheat 7 tonne ha @270 euro tonne,
these are actual averages not bulls**t
land cost 4000-8000euro/ ha
allow 2000euro ha more for drainage irrigation installation,
ie =3.500GBP/ac,

turnover of 20% of purchase price
now do the same for england !
 
I would think your more likely to be able to farm to pay the interest on a loan over 20-25yrars than you are to be able to pay some of the rents I have heard of recently ?

And if you already have 100ac say to borrow against to buy another 100ac you have income from 200ac total to help you make the repayments

This is the same method used by guys nowadays to justify paying high rents, "ah sure, I spread my costs over more acres so it must pay!".

Works for buying land but not renting!
 
you can pay for it - if you have a asset you can borrow against you can get the cash to buy no problem and the cost of tat cash is MUCH lower than the potential uplift in capital value you thing are possible - what you can make out of it farminh it is almost irrelevant here. Farming and land ownership have no relation to one another at all

principle is the same

If your SURE its going to be 20k and you can buy today for 12 and borrow that for say another 1 over the period of the loan you will make 7k/ac

I would say the real reason your not buying like most is in truth there is no certainty it will be 20k per ac just a feeling and a felling is not enough to take risks over really

That does not make sense. Just because you have an asset to borrow against does not mean you can pay for it. You have to repay the borrowed money which at current land values around here over 50 yrs was £500/ac which is effectively a rental equivalent price to be in the same boat except in 50 yrs time you own it.

Just because it increases in value during that 50 years does not mean you can pay for it either and the increase in value is only relevant if you want to sell.

My point is at present values of £12k/ac is not enough for us to sell. I want more - simples.
 
That does not make sense. Just because you have an asset to borrow against does not mean you can pay for it. You have to repay the borrowed money which at current land values around here over 50 yrs was £500/ac which is effectively a rental equivalent price to be in the same boat except in 50 yrs time you own it.

Just because it increases in value during that 50 years does not mean you can pay for it either and the increase in value is only relevant if you want to sell.

My point is at present values of £12k/ac is not enough for us to sell. I want more - simples.

Also if you were to sell, what would you do with the money?
 
Also if you were to sell, what would you do with the money?

Personally I would buy more acres in Lincs and let it on a contract farming basis. I would not move local to the farm though as I would want to stay around here.

I have quite often thought about selling up and then taking it back on a 25 yr lease though and then using the money to buy land elsewhere to let out as I would having a living off the land I am farming myself. The rent that the land I bought generated would be left in the pot and reinvested in more land as and when it came up to buy.

That way I get to carry on farming the land we know but get to expand on the owned acres in another county.

HOWEVER it always comes back to the fact that whats the point in owning a farm in another county then not living there yourself.
 
Personally I would buy more acres in Lincs and let it on a contract farming basis. I would not move local to the farm though as I would want to stay around here.

I have quite often thought about selling up and then taking it back on a 25 yr lease though and then using the money to buy land elsewhere to let out as I would having a living off the land I am farming myself. The rent that the land I bought generated would be left in the pot and reinvested in more land as and when it came up to buy.

That way I get to carry on farming the land we know but get to expand on the owned acres in another county.

HOWEVER it always comes back to the fact that whats the point in owning a farm in another county then not living there yourself.

I assume land in Lincolnshire is much cheaper than where you are now then?
 
Christ lads stop. You sound like the irish did a few years ago with houses. The house down the road was worth X last year and is now worth X plus 20% this year so in future it will be worth 2 times X and any way money is cheap so you would be mad not to buy it. And yeah it might drop a bit but long term it will be worth 3 times X.

CRAP CRAP CRAP

Houses, land, gold whatever are only worth whatever the next guy is willing to pay and so much of it has to do with confidence of the next guy that the market won't drop. If the next guy in to the market starts to see a drop in prices he will hold off purchasing and if enough hold off you starts to see this blip on the never ending price rise to start to become a "soft landing". Thats when the highly leveraged among you are put under pressure by your banks to start to off load non core asset pieces of land. Then the banks won't lend as much to the guys buying land and the soft landing becomes a crash. I should know cause I have been badly burned by this.
Every one in ireland wanted to own more houses than there own one in 2007 even though they gave a rental return of 2% now after the crash you can buy houses in for 30% of there previous value and they can get 8-12% rental return yet no one wants them.
Sounds very much like UK land prices doesn't it. Its fashionable and tax advantageous to buy land. But both can be changed at the stroke of a pen. If the government change its tax system that would take a lot of the heat in the market and a long with it land becomes an unfashionable investment that gives a crap return. And forget about the saying "well they aren't making anymore land" not much solace if you paid 12k an acre and its worth 4k today.
The only thing keeping the land market going in Ireland is farmers buying it and most have sold sites or devlopment land in the boom and were lucky enough to have held on to it.

Spot on!

Land is an asset and can just as easily go down as well as up! main drivers to this mad price increase are the liquidity available from our friends the banks as they seem to believe farming is a safe place to lend into (and we know how excellent their predictions have been in the past) Individuals with capital looking for a 'safe' place for it - and what safer place than an asset that has steadily increasing in value over the last 10 years or so???? Well go back to 2007 and that would have been commercial property!! not so good for the past few years! Lastly possibly inheritance tax - well all that takes is a little change in the law (unlikely yes I know) restricting the total relief given to agricultural land to say the first million and over that its 40% !

Saying all that if next door came up for sale would I move heaven and earth to buy it ??? ....... err yes! and that is probably the problem isn't it o_O
 
Spot on!

Land is an asset and can just as easily go down as well as up! main drivers to this mad price increase are the liquidity available from our friends the banks as they seem to believe farming is a safe place to lend into (and we know how excellent their predictions have been in the past) Individuals with capital looking for a 'safe' place for it - and what safer place than an asset that has steadily increasing in value over the last 10 years or so???? Well go back to 2007 and that would have been commercial property!! not so good for the past few years! Lastly possibly inheritance tax - well all that takes is a little change in the law (unlikely yes I know) restricting the total relief given to agricultural land to say the first million and over that its 40% !

Saying all that if next door came up for sale would I move heaven and earth to buy it ??? ....... err yes! and that is probably the problem isn't it o_O

I disagree. Land will blip, thats for sure, but the general theme is rise. Look where it was in 1940 to where it is today. That rise will continue over the coming years.

It has got nothing to do with domestic or commercial property because we can build as much of that as we like which is why it collapsed. We cannot build more new land though. We are an island and unless you can reconnect us to mainland Europe then land in the UK will become more and more sought after as our population grows.

Something that nobodies mentioned is that irrelevant of recession there are hundreds of thousands of people out there with money. Many of those people are thinking about 'owning their own bit' of the british countryside. The rational behind that is two fold ..... 1. its deemed 'safe' and 2. the idea of owning their own bit of land keeps niggling at them.
 
I am not really disagreeing with you that land is probably a very good investment and of course if you keep it long enough it will rise in value - put £100 in the stock market in the 40s and that would be worth a few more pennies now too! My argument is only that the main drivers at present are banks very willing to lend money for agricultural land, capital looking for a safe place to ride out the current financial turmoil and possibly IHT mitigation. Take those away and I can't see land prices increasing at their current rates. Of course it will rise in value over a long period of time but so should most other assets - one thing is sure though, much better bet that having money sat in a bank account for the next 20 years!!
 
I am not really disagreeing with you that land is probably a very good investment and of course if you keep it long enough it will rise in value - put £100 in the stock market in the 40s and that would be worth a few more pennies now too! My argument is only that the main drivers at present are banks very willing to lend money for agricultural land, capital looking for a safe place to ride out the current financial turmoil and possibly IHT mitigation. Take those away and I can't see land prices increasing at their current rates. Of course it will rise in value over a long period of time but so should most other assets - one thing is sure though, much better bet that having money sat in a bank account for the next 20 years!!

My point with this has always been long term though so maybe were are crossed wires slightly. However the people around here that bought in the early 90's at £5k/acre are now sat on land worth £12k/acre. Problem is they are not selling to realise the uplift because they were all farmers.

Now though the buyers are not generally farmers and I disagree about the banks because the people buying at £12k/ac have the money from outside of ag, so they are not borrowing and farmers that are buying are rolling over cash.

A national land agent at the moment is looking for up to 1000ac of land with buildings around here and is quoting £11k/ac minimum. I rang them up and said its not enough and the reply was its just a starting point and we will pay more for the right property. In that particular case it was for a private trust fund. I said jokingly £15k/ac is my starting point and the reply was we need to visit and take a look. I declined.
 

SFI - What % were you taking out of production?

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  • 100% I’ve had enough of farming!

    Votes: 7 3.7%

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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