LAND!!

[Beef11]

It seems that real estate prices have been driven up all over the country by people retiring to the country or investing in real estate due to the lackluster performance of the stockmarket over the past 5 years. This along with favorable interest rates and creative financing such as interest only and ARMs has caused many to wonder about the sustainability of the current trends but that is neither here nor there. The problem that ag people both young and old face is how to acquire land for their many enterprises. However i'm sure that many of you have heard me sound off on land as an investment as should be held accountable for a return on investment. As many of you are well aware ranches have been steadily climbing in value over the past few years. I was recently looking at ranches for sale and most fell in the 4-6k per AU. Now if you figure this out with just leasing pasture to cattle either yours or others and figure 8 months at $15 you end up with $120 per AU which cost you 4-6k which gives you about a 2-3% return on your investment minus your costs for upkeep. Not really a sound investment especially if you are paying more than 2-3% in interest. Using this logic it would be cheaper to lease ground for your cattle.

Now here comes the question. How can we extract more return out of an investment in order to make it equitable? I want some out of the box thinking. As of late hunting rights has been huge as far as bringing in income. Intensive grazing can up production while fixed costs stay relatively the same. ole Mike C. raises catfish any other ideas?

 

[MikeC]

Switchgrass, Hemp, Sisal, and Lawn Sod.

Hemp ain't legal yet but might be one day. It would put the pulpwood business out though.

I checked into raising Bullfrogs one time. Can't be done they say.

If we had more Chinese Restaurants I could raise more cat's though. ;-)

 

[Texas Ranch Man]

Wild flower and other type of flower seeds. Bluebonnet seeds are $300.00 lb.

 

[Beef11]

I checked into raising Bullfrogs one time. Can't be done they say.

Horse plop it can be done. I know a guy that raises them. from tadpoles to adults that weigh 550 grams. He says its a new industry and has a very strong market for them. $25 each they are grain fed and neat looking critters. It seems that aquaculture is a natural fit for cattle operations. I want to raise tropicals in my stock tanks.

It is surprising how much aquaculture is in Idaho, they have everything from trout to gators and bullfrogs, not to mention tilapia and catfish.

 

[MikeC]

I checked into raising Bullfrogs one time. Can't be done they say.

Horse plop it can be done. I know a guy that raises them. from tadpoles to adults that weigh 550 grams. He says its a new industry and has a very strong market for them. $25 each they are grain fed and neat looking critters. It seems that aquaculture is a natural fit for cattle operations. I want to raise tropicals in my stock tanks.

It is surprising how much aquaculture is in Idaho, they have everything from trout to gators and bullfrogs, not to mention tilapia and catfish.

Some guys are raising shrimp here too! They are those huge "8 count" ones and are great.

 

[Beef11]

No shrimp out here that i know about. That would be a bad deal for me i'm sure i'd eat most of them. Lately i've been thinking about starting into the dog breeding alittle heavier. Its a tough deal if you don't do your homework. Like anything i guess. I want to get me some of those bullfrogs as they are so danged cool. The way people are doing all these things around here is with geothermal water. I need a hotspring and i'd be set. then pump the spent water on your corn and you'd wonder what happened. Ideally i would have a place where one enterprise produced a bi product that supplied a major need for the next enterprise over and over. Utilizing my resources several times instead of once or twice per cycle.

 

[Beefy]

I want to raise tropicals in my stock tanks.

such as?

 

[Beefy]

Wild flower and other type of flower seeds. Bluebonnet seeds are $300.00 lb.

holy crap, batman! what other weeds sell well?

 

[Beef11]

I ran livebearers last summer, mollies and fancy guppies and had great success. This summer i want to run a few thousand mollies and Dwarf albino bristlenose plecos. I also would like to try some corydoras i think that they would do well. Endlers and swordtails are also on my list. As well as about 3 other strains of mollies.

 

[Beefy]

ok dont laff at me but when you say stock tank are you talking about a pond or a water trough? if you are talking about a pond what size is it? i thought about throwing some angelfish in to see what would happen but havent had the guts to do it. i imagine they would just die in the wintertime.

 

[Beef11]

ok dont laff at me but when you say stock tank are you talking about a pond or a water trough? if you are talking about a pond what size is it? i thought about throwing some angelfish in to see what would happen but havent had the guts to do it. i imagine they would just die in the wintertime.

i'm talking about 100-800 gallon troughs. i don't know how cold you get in the winter but angelfish prefer it warm. I would think that spawning them would be difficult in a pond but it might work. I model my operation after a beef stocker operation. I breed them all year and feed the fry (fish calves) enough to get by then when summer rolls around i put them in the troughs and they explode then 4 months later i go gather them up and put them inside and pick out some for breeding and start selling the rest. Its a very low key deal and isn't time consuming all summer. The breeding requires some paying attention but is fun for me. I was going to get about 20 different types of fish but they are so different that i decided it was best to pick a few and do them really well in quanity. I'd like to get into trout but that will require serious fish infrastructure where as tropicals take a few aquariums and live with the cows.

 

[Beefy]

plecos would be a good idea since they eat the algae and all. but arent they hard to breed?

 

[George]

ok dont laff at me but when you say stock tank are you talking about a pond or a water trough? if you are talking about a pond what size is it? i thought about throwing some angelfish in to see what would happen but havent had the guts to do it. i imagine they would just die in the wintertime.

i'm talking about 100-800 gallon troughs. i don't know how cold you get in the winter but angelfish prefer it warm. I would think that spawning them would be difficult in a pond but it might work. I model my operation after a beef stocker operation. I breed them all year and feed the fry (fish calves) enough to get by then when summer rolls around i put them in the troughs and they explode then 4 months later i go gather them up and put them inside and pick out some for breeding and start selling the rest. Its a very low key deal and isn't time consuming all summer. The breeding requires some paying attention but is fun for me. I was going to get about 20 different types of fish but they are so different that i decided it was best to pick a few and do them really well in quanity. I'd like to get into trout but that will require serious fish infrastructure where as tropicals take a few aquariums and live with the cows.

So who do you sell them to?What do you get for a fish?

 

[Beefy]

how about some koi? they should be easy if you can afford to buy some. dont carp breed like rabbits?

 

[Gliderider]

I have a couple of goldfish in my 100 gallon stock tank and they are about 6 in" long now. They've been in there for a year and a half. I buy them small and resell them when they are about this size.

 

[EIEIO]

Neighbors raise cattle, goats, mustangs, wildflowers (they have some seed coming in at $600 a pound and it's legal!), plus they also raise native grasses. Paid me $250 dollars last year to come over to harvest some broom sedge seed.

They can't keep up with the demand for their goats. They have what I would guess to be right around 1K acres and at least 5 employees so I think they must be doing pretty darn good.

They really follow Kit Pharo and his teachings.

I plan on going to a livestock handeling clinic with them this weekend in Lebanon (Missouri). Anybody else gonna be up that way?

I know I've posted this before but I got friends that raise gomer bulls. Know some others that got into raising goats, pigs, and lambs while their kids were younger and in 4-H. They developed a reputation (good one) and even though their kids are all moved out they still do it for extra income.

Buddy from HS and his dad have around 7K acres in SE Kansas and he makes around 80K a year doing guided hunts. Started out with just rifle and deer but has now gone to also include bow, black powder, and even turkey hunting. I think it was TNN Outdoors even came out to his place once for a filming.

Cousin of mine retired in his 30's and bought a farm near KC and runs some kinda program off it where people buy ahead of time veggies, cattle, and pigs. Then he supplies them through the year. I'll add later what the program is called.

J

 

[OklaBrangusBreeder]

I don't get the line of thinking in this thread at ALL.....!!!

In the original post, the answer to the "increase return" question was given:

"It seems that real estate prices have been driven up all over the country by people retiring to the country or investing in real estate"

By counting ONLY the lease value as the "return" on investment you are not taking into account the increase in the VALUE of the land.

For Example:
Back in "good" days of Walmart as a stock. It was paying probably less than 1% in Dividends. But did that make it a bad investment? NO. Because it was climbing by 25 or 30 percent per year in VALUE. Based on TOTAL RETURN it was making say 25% in value appreciation PLUS 1% in dividend making a TOTAL RETURN of 26%. That was a GREAT stock even though its cash generated earnings was pretty insignificant.

Likewise:
Should you value land ONLY on the lease value for pasture. NO YOU SHOULD NOT! In the initial premise it was stated (which I agree with) that land prices are climbing dramatically. From a TOTAL RETURN viewpoint, you make 2-3% on the lease value/running cattle PLUS the VALUE of the land itself is increasing yearly. So from a TOTAL RETURN viewpoint, the land is doing fine.

If you want to make more money from the use of the land, power to you. But I wouldn't be using the "land has to generate a return" argument to justify the whole notion...

 

[Beef11]

By counting ONLY the lease value as the "return" on investment you are not taking into account the increase in the VALUE of the land.

The lease is the only realized gain on the property until it is sold. Real estate is NOT a sure thing either. many have lost their butts and many more will on land. Just cause things are good and have been doesn't mean they always will be. The idea of this post is how to make land cash flow better. Alternative enterprises instead of conventional non penciling in the box ideas. Land is an investment. I like solid returns on my investments. Many economists are screaming real estate bubble right now. That means land appreciation has exceded real value. If you look at all the tell tale signs they definetly point to something changing in the not to distant future. If that happens your appreciation is turned to depreciation.

 

[denoginnizer]

I have been thinking of raising bass to sell for pond stocking. Or maybe fishing minnows or shad.
Maybe quail or phesaents for the recreatoinal folks to turn loose and shoot. There is a guy down the road from me charging folks to hunt pen raised ducks.

 

[Caustic Burno]

Seems like there would be a market to restaurants for quail or pheasant.