Menu
Forums
New posts
Search forums
What's new
New posts
New media
New media comments
New profile posts
Latest activity
Media
New media
New comments
Search media
Members
Current visitors
New profile posts
Search profile posts
Log in
Register
What's new
Search
Search
Search titles and first posts only
Search titles only
By:
New posts
Search forums
Menu
Log in
Register
Forums
Cattle Boards
Beginners Board
making a living ranching
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Help Support CattleToday:
Message
<blockquote data-quote="Goodlife" data-source="post: 888046" data-attributes="member: 17226"><p>This post has me thinking. It is interesting forst to consider why they are willing to lease this land for such a small amount? If it is $55k to lease and fertilize, and you are assuming $25k of that is fert, then they are basically asking $30k to lease 386 acres or less than $100 per acre. I obviously made some of these numbers up tryint to be conservative based on what I have read so far. If land is worh $4000, and it is worth twice that for good pasture here, that is less than 2.5% on the value of the land. Add the cattle and buildings etc... and they may be looking at CD like returns. Why hang on to it at those prices? Perhaps they are looking for you to continue to improve the land for them so they can sell it when the market makes some recovery? That means if you do end up leasing it, be sure it will be guaranteed available next year, and the next to get a reasonable return on your investment. That is if you can find a way to make a profit here. </p><p></p><p>I played with some numbers and it seems you must sell somewhere in the range of $150,000 worth of cattle to cover the $55K plus other expenses, and have anything left to come close to a living income. Looks like this goes to show what has been discussed many times on this board...you cannot cover the land cost with your cattle income. That is a separate investment you hope to recover with some gain some day (or at least your kids be able to).</p></blockquote><p></p>
[QUOTE="Goodlife, post: 888046, member: 17226"] This post has me thinking. It is interesting forst to consider why they are willing to lease this land for such a small amount? If it is $55k to lease and fertilize, and you are assuming $25k of that is fert, then they are basically asking $30k to lease 386 acres or less than $100 per acre. I obviously made some of these numbers up tryint to be conservative based on what I have read so far. If land is worh $4000, and it is worth twice that for good pasture here, that is less than 2.5% on the value of the land. Add the cattle and buildings etc... and they may be looking at CD like returns. Why hang on to it at those prices? Perhaps they are looking for you to continue to improve the land for them so they can sell it when the market makes some recovery? That means if you do end up leasing it, be sure it will be guaranteed available next year, and the next to get a reasonable return on your investment. That is if you can find a way to make a profit here. I played with some numbers and it seems you must sell somewhere in the range of $150,000 worth of cattle to cover the $55K plus other expenses, and have anything left to come close to a living income. Looks like this goes to show what has been discussed many times on this board...you cannot cover the land cost with your cattle income. That is a separate investment you hope to recover with some gain some day (or at least your kids be able to). [/QUOTE]
Insert quotes…
Verification
Post reply
Forums
Cattle Boards
Beginners Board
making a living ranching
Top