Land prices

Help Support CattleToday:

I sort of disagree. Some land has not been taken care of. People constantly pulling out and not putting back. You know the type of place I am talking about. No improvement or little improvement. People expecting more after they have neglected it. The land has less earning potential than what it would have if it had been left fallow. For this reason earning potential has merit. Practically all pastures can be improved. You have to maintain them once you get them there.
 
Bigfoot":30paqdea said:
To answer your question, no cattle will not pay for that land. Unfortunately, land is now valued beyond its productive value.

Tobacco ground is leasing for $600 an acre here next year. That will be interesting to watch as well.

Does that include barn space?
 
john250":2ny9n314 said:
Bigfoot":2ny9n314 said:
To answer your question, no cattle will not pay for that land. Unfortunately, land is now valued beyond its productive value.

Tobacco ground is leasing for $600 an acre here next year. That will be interesting to watch as well.

Does that include barn space?

No, it doesn't. But, that land would be close proximity to something you could irragate from. Either a large pond, or big stream. Renter would provide irrigation equipment, and owner the water.
 
OklaBrangusBreeder":s2o4x4md said:
hurleyjd":s2o4x4md said:
Can any one justify paying upwards of $3500 an acre to raise cows on. I for one cannot. Also the person you are leasing from cannot afford to charge less than $175 per acre this equates to a 5 percent return on their assets. Would you balk at paying $175 an acre for lease for the land. Also at what point will land get to high to buy. I have heard statements that land will always go up. If you are depending on the land to generate your source sole income. Then can you survive a drought that last for several years. The only reason that I can keep going is because of other investments and pensions.


I've come to believe the following...

* Land is an investment unto itself. Your ownership of land should not be based on "earning a return" on it as it likely will appreciate during owndership. You don't expect a stock you purchase to "pay for itself" over time. You buy a stock, it hopefully goes up, and the gain you make during ownership will reward its ownership. Same thing with land. It does not have to pay you back for the initial purchase.

* What you earn from cattle/crops should be considered the "dividend" on your investment. For me, what I can earn on the land is a better and more consistent "return" than having the cash invested in the land in other financial assets (savings account, stock, mutual funds, etc). Plus, I find the effort of farming the land to rewarding and enjoyable. So, it is a "win-win" for me.

I guess is my point if you are trying to "justify" the purchase of land by strictly what you can earn on it, you'll probably never make a land purchase ever again. However, if you look at the land more as a seperate investment from the farming operation it might calculate out more appealing.

As a general rule I agree completely. That said, there are still some bargains out there but you may not have any amenities such as power. Last farm I bought I paid $350/acre for the dirt. Its more than paid for itself and then some but you aren't going to carve this up and sell house lots on it unless you spend a fortune running power to it. Surprisingly, a realtor had it listed for three years before I bought it.

I know of another farm that has a terrible sticker shock on it but if you do some homework on it its really not a bad deal at all. Just gonna take a lot of money to buy it.
 
Land here goes for about $1200 per cultivated acre and $400 per bush acre mostly for crop land, grazing land goes for less as not as good or frosts early.Land rent goes for $60 ac for really good crop land to $20 ac for grazing land that is not the best for crops. The only crops growing here are canola,dry peas,wheat, barley,oats. At these prices it still will make it a long time to pay for the land and make a living. Land prices and rent seem to have leveled out and don't seem to be climbing any more some rent in the higher prices have even came down a little.
 
Bigfoot said:
To answer your question, no cattle will not pay for that land. Unfortunately, land is now valued beyond its productive value. quote]

"Investors" do drive up land prices in some locations, but we can not control that. We can control productivity to some extend - - since productivity is based on land quality and land management.

It is pretty easy to double the productivity of most grazing land w/ very little purchased inputs. Sometimes even triple the productivity. Once the pasture is improved you can then run a higher value animal. Think bred heifers or stockers. They can cash flow land here. Even cows cash flow land at current calf prices. :cboy:
 

Latest posts

Top