Farmland

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ca4cy

Well-Known Member
Dec 6, 2009
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North Central IA
I find it hard to give farmers any sympathy on bad years when so many are sitting on the kind of cash or land value they own...like have tbey forgoyten they are millionaires?

These are two entirely different things. If they have grain held over from the previous operating cycle, or cash from grain sales then they are sitting in a strong position to weather down cycles. If they are borrowing annual inputs they are substantially more susceptible to market volatility.

There is definitely such a thing in the ag sector as being asset rich but cash poor and if the bulk of your equity is in land, the only way to convert that to cash quickly is to sell it or borrow against it.
 

Tre4ISU

Well-Known Member
SuperFanatic
SuperFanatic T2
Dec 30, 2008
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Estherville
I find it hard to give farmers any sympathy on bad years when so many are sitting on the kind of cash or land value they own...like have tbey forgoyten they are millionaires?

I don't really think sympathy is justifiable anyway but this is such a shallow look at what goes on.

Anyway, the original question. It's a long term investment. It's not a get rich quick scheme. It will be very stable. I'm not sure how to feel about the CRP. It certainly stabilizes it even further but it could keep returns low if markets turn around.
 

BoxsterCy

Moderator
Staff member
Sep 14, 2009
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Minnesota
Bet on the future. Soybeans, man. Soylent red and soylent yellow are going to be yuge money makers until they get supplanted by soylent green.
 

Iastfan112

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Apr 14, 2006
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Land is a hedge against inflation. Depends on how much money the farmer has. I thought the prices back when land was bringing $12,000 per acre were insane. Lots of farmers threw away a lot of easy money they got when corn prices doubled for a couple years. Can’t lose money any faster than paying $12,000 per acre and lose about $1,000 per acre of equity every year from the inflated price.

A lot of them had a historic amount of cash available to them though and there's a good chance that land might not be available again in your lifetime makes for a tempting proposition.
 

dafarmer

Well-Known Member
Mar 17, 2012
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SW Iowa
What is the CSR on the land. Then you can tell if it will appreciate in value. Also most CRP contracts now pay out over $300 /acre. Corn Suitability Ratings.
 

CYKXBUT

Active Member
Jul 21, 2006
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We have 108 acres of farmland (undeveloped) that is located in west end of the city of Dubuque. Developed lots of 1/4-1/3 acre on a neighboring farm are going for $55k each. We've had some developers sniffing around some, but haven't really advertised it much either. (no realtor). Currently rent out land for $250/acre. Not sure a farmer would be interested in this property as it is worth much more for development. But investing has its risks too, but I would say land is less risky over the long haul.
 

SoapyCy

Well-Known Member
Oct 10, 2012
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grundy center
We have 108 acres of farmland (undeveloped) that is located in west end of the city of Dubuque. Developed lots of 1/4-1/3 acre on a neighboring farm are going for $55k each. We've had some developers sniffing around some, but haven't really advertised it much either. (no realtor). Currently rent out land for $250/acre. Not sure a farmer would be interested in this property as it is worth much more for development. But investing has its risks too, but I would say land is less risky over the long haul.

This is the only type of land I would buy as an investment. If I bought rural land it would be for recreation only. The exception would be in a trust for my kids before I died.

What's your asking price per acre for your land?

I invest in farmland through LAND stock. Pays 7% dividend on specialty crops. Row crops are bad investment today.
 
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xr4ticlone

Well-Known Member
Oct 1, 2006
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Texas
Farmland is gold with a rent check...

At this point I'm not sure what the real upside is on land right now as far as value...I'd guess not a lot.

I wouldn't go broke or put myself in a bind buying farm land...to me there are much better options. It's a safe cash park for those with too much money.
 
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Stormin

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Apr 11, 2006
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What is the CSR on the land. Then you can tell if it will appreciate in value. Also most CRP contracts now pay out over $300 /acre. Corn Suitability Ratings.

Going forward CRP payments are capped at a maximum of $300 per acre. The days of $350+ payments are done.
 

Stormin

Well-Known Member
Apr 11, 2006
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i believe that there is a way to break crp contract if land changes owners?

If all previous payments from previous years for that contract are repaid then the CRP contract can be broken. Otherwise it is my understanding that the contract follows the land and the new owner assumes the contract.
 
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SoapyCy

Well-Known Member
Oct 10, 2012
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grundy center
It took me a decade to ask this question of myself, but what is the purpose of the investment? If it's the emotional attachment to owning land or buildings, thats one thing. If the goal is to make money, then there may be better investments out there. You could take that same half million dollar investment and double your return in another investment. If you want the emotional connection to owning land the investment return shouldn't matter.

It boils down to this: what is the goal?
 
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