investments

[jac]

Been reading a lot in the papers over here of “investors” buying up farms because the returns are better than the intrest rates at banks.. This is making it very hard for folk that want to farm properly to get a start because the prices these “investors” can pay is more than agriculture can stand.. Just wondering if the same scenario is happening with you guys over there??..
John

[Stable-Man]

Not with farmland that I know of, but it probably is happening. An uncle of mine lives in CO and the houses in that little town were bought cheap 15 years ago and the owners just leave them vacant while the people that actually live in the town have to build economical housing because all the investment and interest in the community drove up rent/property taxes. In general land is just going up due to subdivisions. A popular thing around here is for rich people to buy decent sized acreage, build their mansion on it, and stable some horses. I’d like to see more of that land in production.

[mitchmaine]

john, maine would be just fine if it wasn’t for that danged ocean! people drive up, fall in love with the place and decide to retire up here someday, so in the meantime , buy the biggest best peice of farmland and out of some sense of guilt, decide to grow christmas trees or something. they’re all for perserving the open space, until you show up with a truckload of hen manure. “this can’t be farming” “no one i know would put THAT on their land” “it has to be toxic”. i could go on for hours, but i think i made my point. unfortunately, an investment is rated in dollars and cents, and no one can quite decide when they have “enough” so they keep doing what they do well (make money) and land is a keen way so they eat it up and spit it out like tap water. i wish land here was as spare as it is in scotland, maybe someone would value it more and use it the way it was intended. i love to rant. i think i will go on for hours. i heading off to rant some more. best wishes, mitch

[OldKat]

@mitchmaine 18461 wrote:

john, maine would be just fine if it wasn’t for that danged ocean! people drive up, fall in love with the place and decide to retire up here someday, so in the meantime , buy the biggest best peice of farmland and out of some sense of guilt, decide to grow christmas trees or something. they’re all for perserving the open space, until you show up with a truckload of hen manure. “this can’t be farming” “no one i know would put THAT on their land” “it has to be toxic”. i could go on for hours, but i think i made my point. unfortunately, an investment is rated in dollars and cents, and no one can quite decide when they have “enough” so they keep doing what they do well (make money) and land is a keen way so they eat it up and spit it out like tap water. i wish land here was as spare as it is in scotland, maybe someone would value it more and use it the way it was intended. i love to rant. i think i will go on for hours. i heading off to rant some more. best wishes, mitch

Same situation here, except that the draw is “country life” rather than the ocean. No one would be attracted to the water in my part of the world, even if it were not filled with BP’s oil. Harry S. Dent, who wrote The Great Boom Ahead in the late 1980’s and The Roaring 2000’s Investor in the late 1990’s predicted outrageous increases in land prices within 100 miles or so of any major city in the US as technology made working from home possible and the “baby boomers” started buying their trophy / retirement homes. I don’t agree with every premise that he has advanced, but he hit the nail on the head regarding real estate. I wish I would have believed him at the time and acted upon it, because now I am priced out of the market in my area.

I had wanted to retire by now, but as my retirement account has gone “tilt” over the last couple of years I am now considering staying in the work force and putting in for a job with my employer in another state, where land prices are much more manageable.

[reb]

@mitchmaine 18461 wrote:

john, maine would be just fine if it wasn’t for that danged ocean! people drive up, fall in love with the place and decide to retire up here someday, so in the meantime , buy the biggest best peice of farmland and out of some sense of guilt, decide to grow christmas trees or something. they’re all for perserving the open space, until you show up with a truckload of hen manure. “this can’t be farming” “no one i know would put THAT on their land” “it has to be toxic”. i could go on for hours, but i think i made my point. unfortunately, an investment is rated in dollars and cents, and no one can quite decide when they have “enough” so they keep doing what they do well (make money) and land is a keen way so they eat it up and spit it out like tap water. i wish land here was as spare as it is in scotland, maybe someone would value it more and use it the way it was intended. i love to rant. i think i will go on for hours. i heading off to rant some more. best wishes, mitch

This is so true, I grew up and live on the coast of Maine. Because of “people from away” buying up all the land, not just the little bit of good farm land it has driven the price way out of reach for most young working families. Now don’t get me wrong, I understand that these same people from away provide income to many, including myself and 2 of my brothers as we are all carpenters. So I don’t know what the answer is, but it kills me to go to work every day remodeling/adding on/or tearing down the old Maine farms and seeing all the fields left to grass so the new owner can mow it once a week on his new $45,000 John Deere. Well I guess I have gone on long enough ranting(maybe ranting is a Maine thing)

[near horse]

“They’re everywhere!” I just visited a guy near Spokane raising beef doing some form of MIG (mgmt intensive grazing) and his couple hundred acres was surrounded by 2000 owned by a local heart surgeon. Same type of thing – he puts a handful of cows on the 2000 acres, sells them at whatever the market is (losing money is of no concern) and he qualifies as a “farmer” – deduction city. Meanwhile, as Old Kat says, land prices w/in a reasonable distance of a city/town of any size is outrageously priced and thus, small farmers either are too far from good sized markets or have huge land costs (and taxes) for very small parcels.

A local anesthesiologist built on top of a hill a few hundred feet high in the middle of a wheat field. He cut a drive way that wrapped around the hill to spiral up to the top probably 1/4 to 1/2 mile long – AND PAVED THE WHOLE THING. Just a sad waste of good palouse farm soil.

[jac]

Reb I can assure you that ranting is not just a Maine thing.. dont get me started on milk prices :D.. Seems you guys have the same problems we do… Just last week a 250 acre farm, that one of the”big” guys had been forced to sell because he got in too deep with the bank . It was bought by a guy that owns a large sports shop chain as an “investment” and promptly rented it back to the guy that nearly went bust !!!!. rather than give someone else a crack at it {me perhaps}…I feel another rant commin on..better cool it before I get to the horses..
John

[mitchmaine]

i have to remind myself that when i bought this place, land and run down buildings, that the price was $27,000. the mortgage was $150. and many months we went without to pay it. now we own it and it seems like nothing, so i have to believe that the math is still the same and even tho’ the figures now have many more zeros, that in 40 years those numbers will seem like nothing and so on. it bothers me that the land is the investment and the easy way to more money. the land is the source of our food and our fuel but we trade it away, like land is being made somewhere every day. i blame it on simple education. children should be taught the importance of clean water, and healthy food, and it ought to be taught in our schools, by US, because no one else seems to want to take up the task. ahhh, i do love to rant. mitch

[dlskidmore]

This is one of the major reasons why I want to farm. I do not want to be one of those guys that buys up elbow room and mows it. Unless you’re coaching a football team, one acre of lawn is a waste of time, money, and land, never mind more acres. I may be guilty of selling low, and doing silly things like overpaying for hay, but I would prefer to be taken advantage of by my neighbor the real farmer, and not get into the bulk markets. (I know I overpay for straw right now, but I’m mostly paying for the guy to be available for an hour when I can drive out there, and would want more straw for the same price if I had a bigger vehicle.)

I’m interested in your comment about renting out the land to the wrong guy. How would you go about attracting and selecting a good tenant if you had more land than you could work yourself? I may find myself in that situation at first. I’d rather not take the route of pasturing three sheep on forty acres.

[Marshall]

Yup, pretty much the same here in Michigan. Our other problem is the Dutch farmers who are not even US citizens. They have 5000 cow dairys and no place to spread manure. They are now paying $6000. per acre just to spread manure. You can’t farm land and pay for it at that rate. I could go on and on but you get the idea.

[near horse]

First, IMO, If you own the land or are paying it off, you need to decide what you want from the agreement. Conventionally, folks always look at $$$ return per acre so how much can I rent this to someone for? But that can and often does leave you with “forty acres” that are in worse shape after say 5 yrs than when you started.

As I mentioned in an earlier post I visited a guy trying some rotational grazing stuff and one thing he showed us was what he/they called “Land EKG” system of evaluating the results of your grazing or other practices over time. (Can google Land EKG). It is a mgmt tool used by proponents of holistic mgmt, and, although I’m not “all in” with HM, I do think the EKG system can really be valuable. Essentially, you run a “permanent” 200 ft line transect in each pasture (just 2 plastic stakes driven into the ground to mark the line). Measure/evaluate the pasture condition at 4 points (every 50 ft) using a 1m cable hoop – take a photo …. Do it once a year about the same time and can see some serious changes. That’s the “nutshell” version.

dlskidmore, after you decide what you want, you can then see how a potential tenant fits in to your goal(s). Perhaps even see other pieces of land they’re using. Good luck.

[dlskidmore]

@near horse 18563 wrote:

First, IMO, If you own the land or are paying it off, you need to decide what you want from the agreement.

I’ve been thinking about this. The usage of the land is way more important than the rent to me. I need to make up my mind if I’m going for the organic licencing someday, and take that into account. With the three year look back on the land, it could matter a lot to me what practices a prior tenant used on it. A multi-year contract would encourage care of the land so it was still worth working at the end of the contract. Perhaps a 20-year farm plan with discounts on rent if they make improvements towards that? (Drainage, fencing, structures, biodiversity…)

The land EKG system sounds similar to a management practice in one of my books. There’s a whole chapter on it. I should figure some achievable benchmarks into the contract. You can measure out the forage density and growth rates, etc…

Although with all this farm planning going into the long term contract, I might have trouble getting that together promptly enough to lease the land the first year. I won’t have any baseline for the land’s productivity, what kind of drainage it needs, etc.. If it’s pasture or a grain field to begin with, I could just have a haying contract the first year?

[PeytonM]

yeah, around where I grew up it was all small farms and now there are 2 guys that fight over land it use to be about 600 an acr. in 2000 now my folks still have the small farm I was raised on and they’ve turned down 4500 and acr. they have 200 with 180 farmable.

It really sucks cause I would like to get the farm and keep it in the family and even though I wouldnt be milking cows like they did I’d like to raise beef and have my horses do some work and have one big tractor for doing like round bails and I already have a small tractor for raking hay. I also have a team I could work also.

they paid 136K for some 30 odd years ago and now its about 750K its nuts what two greedy men can do…

[near horse]

Well – to add some gasoline to the fire, I just read an article that listed off a whole slew of wealthy “non-farmers” who are qualifying for ag tax exemptions. If I remember right, Tom Cruise has some ground (in Colorado I think) that’s worth about 18 million and pays $400 property tax because he has someone run a few sheep on it.

[Author]

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