Trading your farm in for a bigger model.

£100 invested in the dow jones in 1940 would be worth £100000 today and that is not counting dividends which if reinvested would have compounded that growth to probably over a million today.

For example, if you bought one share in Coca Cola when it went public in 1919 for $40 and reinvested all the dividends that stock would now be worth $9.8 million today! Historically there are better investments than farm land!
 
£100 invested in the dow jones in 1940 would be worth £100000 today and that is not counting dividends which if reinvested would have compounded that growth to probably over a million today.

For example, if you bought one share in Coca Cola when it went public in 1919 for $40 and reinvested all the dividends that stock would now be worth $9.8 million today! Historically there are better investments than farm land!

Of course there is. I dont think anybody is saying farmland is the best thing since sliced bread from an investment point of view, but many of us are using the word 'safe' and your guaranteed an increase in value over longer periods of time.

Many would then argue you get that with houses. Yes you do, but they are not as safe unless you take a very long term view.
 

Optimisticfool

New Member
Thanks for the PM warksfarmer, interesting read. Some of the sales seem like the value would have been uplifted by the property giving a more realistic 9k and below for the land, but the bare land does seem overpriced in your area. It is a problem for farmers wanting to expand as they seem to be priced out of the market, seems like the only option is silly rents!

Where is this 210acre block for sale, it will be interesting to see if it makes the 12.5k asking price?
 
Thanks for the PM warksfarmer, interesting read. Some of the sales seem like the value would have been uplifted by the property giving a more realistic 9k and below for the land, but the bare land does seem overpriced in your area. It is a problem for farmers wanting to expand as they seem to be priced out of the market, seems like the only option is silly rents!

Where is this 210acre block for sale, it will be interesting to see if it makes the 12.5k asking price?

Rents seem very variable though and not consistent with land prices. Land thats rented behind closed doors seem to be sub £100/ac but then the landowner keeps the SFP, while public tendered rents make £150/ac but the tenant then gets the SFP, so ultimately they are about the same and the bare naked rental price is roughly £70-£80/ac without subsidy.
 

snowhite

Member
Location
BRETAGHNE
£100 invested in the dow jones in 1940 would be worth £100000 today and that is not counting dividends which if reinvested would have compounded that growth to probably over a million today.

For example, if you bought one share in Coca Cola when it went public in 1919 for $40 and reinvested all the dividends that stock would now be worth $9.8 million today! Historically there are better investments than farm land!
if you picked the right share stock , so many have lost there 100 pound
 

Clive

Staff Member
Arable Farmer
Location
Lichfield
the stock market never fed anyone !

and for every man who has made his millions from trading bits of paper there is another who lost his

I don't think there is much of an argument that the stock exchange is a safer investment than land unless you have a crystal ball that will give you the marvelous benefit of hindsight demonstrated in a few of the above posts
 
the stock market never fed anyone !

and for every man who has made his millions from trading bits of paper there is another who lost his

I don't think there is much of an argument that the stock exchange is a safer investment than land unless you have a crystal ball that will give you the marvelous benefit of hindsight demonstrated in a few of the above posts

I'm not stating that the stock market will feed anyone, just making it clear that land is not some magical investment. After all there has been many a bubble in history ranging from the south sea company in England to tulips in Holland to property in well, everywhere!

The price of farmland has gone down a lot in Northern Ireland. Recently there was land sold for £5000 an acre where as 4 -5 years ago that would have made 20k plus an acre!
 
Land prices in the U.S. have seen some spectacular increases over the last several years, as in the U.K. its' usually farmers who are buying and around two thirds are paying cash rather than taking out a loan.

Prices are all over the place but its tied to the production capabilities of the land and not the house aspect.......after all its the land that is going to pay for it..?

So if you want to pay $80k ac in California or $18k in Iowa its all relative.
 

Clive

Staff Member
Arable Farmer
Location
Lichfield
The value of anything only matters on 2 days - the day you buy it and the day you sell it

As i'm not likely to be a seller the value of land I already own doesn't matter to me at all I guess, as others that have also contributed to this thread say they are not sellers either I'm not sure why they are concerned about its value either other than if they are SURE it's going up and the have ability to fund purchase why not logically buy more ??
 

Sussex Martin

Member
Location
Burham Kent
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.

Thats why I have just purchased my small place, way more than it's worth, but what the market demanded. It has been rented by the family since 1964 and the ashes of some have been scattered there, so what is emotional attachment worth? This land has not been sold since the 1800s and will probably now stay with my family way after my ashes have been scattered there.
 

snowhite

Member
Location
BRETAGHNE
The value of anything only matters on 2 days - the day you buy it and the day you sell it

As i'm not likely to be a seller the value of land I already own doesn't matter to me at all I guess, as others that have also contributed to this thread say they are not sellers either I'm not sure why they are concerned about its value either other than if they are SURE it's going up and the have ability to fund purchase why not logically buy more ??
yes it is only a licence to work
 

Elmsted

Never Forgotten
Honorary Member
Location
Bucharest
Just to stir the pot a bit if you did not need to borrow Lee or others what would you do. My drivel on the subject inward investors to agriculture are unconcerned with farming returns except to cover at present a nominal rate of interest which they have locked in to or for fiscal tax motives. Hence the farming needs only to cover cost of funds deployed. In harvest to harvest on the ground activity.

Whereas much of this thread is looking from an perspective, namely to generate from farming the capital employed to purchase the asset. It is return on working capital which is the yardstick surely. As Clive writes and I have posted for a long time. Mixing land ownership with farming is a fatal flaw the two are disparate.
IMHO
 

Bill the Bass

Member
Livestock Farmer
Location
Cumbria
Rents seem very variable though and not consistent with land prices. Land thats rented behind closed doors seem to be sub £100/ac but then the landowner keeps the SFP, while public tendered rents make £150/ac but the tenant then gets the SFP, so ultimately they are about the same and the bare naked rental price is roughly £70-£80/ac without subsidy.

As for the 210 acres its a private deal which I believe has been offered initially to local farmers so I cant say, as it specifically says for it to remain private. I would think it will go public when the asking price is not achieved though. I was asked on monday if I was going to make an offer by the solicitor handling the sale and I think he got the message when I offered £4k/acre as thats the price it needs to be so farming it can pay for it, in its own right as a stand a lone 210ac farm.

What little land comes up for rent round here is usually in excess of £200/ac some with some without SFP. It just doesnt stack up even on dairy units which historically demand a higher rent. Madness
 
Just to stir the pot a bit if you did not need to borrow Lee or others what would you do. My drivel on the subject inward investors to agriculture are unconcerned with farming returns except to cover at present a nominal rate of interest which they have locked in to or for fiscal tax motives. Hence the farming needs only to cover cost of funds deployed. In harvest to harvest on the ground activity

As said many times over the last few years farming land has nothing to do with its value. So as already mentioned in this thread if I had a pile of cash sat doing nothing I would buy land because for me its safe and a good long term purchase. However borrowing money, even at current interest rates of sub 2.5% to me is crazy because farming it cant pay for it, so whats the point. Might as well sit on what youve got and watch it rise and let everybody else keep pushing the price up locally. That way our asset value rises thank you very much.

All this discussion is hypothetical though because how many of us are land traders? I'm 5th generation I think descending from Cheshire I believe and have the next generation to think about.
 

Walterp

Member
Location
Pembrokeshire
Thats why I have just purchased my small place, way more than it's worth, but what the market demanded. It has been rented by the family since 1964 and the ashes of some have been scattered there, so what is emotional attachment worth? This land has not been sold since the 1800s and will probably now stay with my family way after my ashes have been scattered there.
Heck! I don't know whether to congratulate you or commiserate with you, because it's nice to have but not so nice to have been obliged to pay over the odds for it.

Maybe the old test is best: if you can afford it, and it makes you happy, that's all you need to know. So well done, anyway!
 

Sussex Martin

Member
Location
Burham Kent
Heck! I don't know whether to congratulate you or commiserate with you, because it's nice to have but not so nice to have been obliged to pay over the odds for it.

Maybe the old test is best: if you can afford it, and it makes you happy, that's all you need to know. So well done, anyway!
Thanks Walter, it was my father in law that rented it since 64 and his and the mother in laws ashes scattered there so the wife is very happy at the moment. Me, I could have walked away and kept the money that was in the bank and not had the mortgage, I would though regret that every time I drove past the place!
 

Clive

Staff Member
Arable Farmer
Location
Lichfield
Just to stir the pot a bit if you did not need to borrow Lee or others what would you do. My drivel on the subject inward investors to agriculture are unconcerned with farming returns except to cover at present a nominal rate of interest which they have locked in to or for fiscal tax motives. Hence the farming needs only to cover cost of funds deployed. In harvest to harvest on the ground activity.

Whereas much of this thread is looking from an perspective, namely to generate from farming the capital employed to purchase the asset. It is return on working capital which is the yardstick surely. As Clive writes and I have posted for a long time. Mixing land ownership with farming is a fatal flaw the two are disparate.
IMHO

Thanks for posting that - its what I have been trying to get across in my previous posts but not as well as its put there by you
 

JP1

Member
Livestock Farmer
Thats why I have just purchased my small place, way more than it's worth, but what the market demanded. It has been rented by the family since 1964 and the ashes of some have been scattered there, so what is emotional attachment worth? This land has not been sold since the 1800s and will probably now stay with my family way after my ashes have been scattered there.

Excellent news for you Martin. Congratulations and it must be a good feeling to know the herd you retained now has a safe home nd you can build up with certainty. Made up for you
 

SFI - What % were you taking out of production?

  • 0 %

    Votes: 81 42.2%
  • Up to 25%

    Votes: 68 35.4%
  • 25-50%

    Votes: 30 15.6%
  • 50-75%

    Votes: 3 1.6%
  • 75-100%

    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 7 3.6%

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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