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    #16
    There is no doubt that I have missed the cheapest time to borrow money in my farming career.

    Nothing like lazy capital. Land cost inflation/appreciation has taken a bite out of any resources kept to purchase new land.

    If the right opportunity presents itself maybe its not too late..... other than being alot more expensive to purchase the asset(it's cost).

    Schtoopit.....

    Comment


      #17
      Originally posted by wiseguy
      Why are u saving ??

      Better to borrow than to save !

      A kid with zero savings paid 525,000 / quarter this past spring !

      He says he has nothing to loose !
      For:

      The right stuff
      The right place
      The right time

      Otherwise. I don't care.

      The next land I buy might only be a burial plot and then maybe not.

      On a per acre basis burial plots are very very expensive....lol.

      Take care wiseguy.

      Comment


        #18
        Why are you saving.. Because there comes a time you cant do or dont want all that work,then you become that hated species,,,,the LANDLORD.
        Nice to finaly have a bit of a bankroll in your pocket,instead of a mortage that needs paid.

        Comment


          #19
          Originally posted by Oliver88 View Post
          $1285 per acre debt and $1666 per acre debt seems like a banker might be asleep at the wheel?

          In your opinion what is an acceptable debt/acre or debt/equity ratio?
          This is what is on my corporate financial statement package.

          Working capital ratio - At least 50%.

          Target goal of debt to equity would be less than 40%

          % owners equity - greater than 70%

          I think all of these measurements depend somewhat on ones age and level of comfort. My accountant tells me that he has a number of clients that farm 1500-3500 acres that consistently put up accrued net income earnings of $125-175 per acre and 8000-10000 acre farms that can't get close to that. That being said, accountant also claims they work with large farms that manage the business very well and profit margins are consistent or even better proving the economies of scale debate.

          Size doesn't always matter, its all management which is a broad term. Imo, its a slippery slope with every increasing technology and sales pitch to drive the latest and the best. Many farms don't have enough annual earnings to support the spending. Its only a matter of time before more and more fall.
          Last edited by Richard5; Jul 31, 2020, 13:28.

          Comment


            #20
            Originally posted by farmaholic View Post
            For:

            The right stuff
            The right place
            The right time

            Otherwise. I don't care.

            The next land I buy might only be a burial plot and then maybe not.

            On a per acre basis burial plots are very very expensive....lol.

            Take care wiseguy.
            Very, very expensive, but you have to acknowledge that it is, relatively speaking, a lasting investment...

            And one that you will never see depreciate.

            And that's a fact.

            Comment


              #21
              Originally posted by burnt View Post
              Very, very expensive, but you have to acknowledge that it is, relatively speaking, a lasting investment...

              And one that you will never see depreciate.

              And that's a fact.
              With all due respect, I bought land in 1986 and prices fell. Bought land like it in 2004 for same price.
              18 years, for many of those years I wouldn't have been able to sell it for what I paid. Something tells me we might be there again.

              Timing and time better be on your side with a farmland purchase in the past AND now.

              Comment


                #22
                Originally posted by farmaholic View Post
                With all due respect, I bought land in 1986 and prices fell. Bought land like it in 2004 for same price.
                18 years, for many of those years I wouldn't have been able to sell it for what I paid. Something tells me we might be there again.

                Timing and time better be on your side with a farmland purchase in the past AND now.
                The reference being directed to your burial plot cost -

                Comment


                  #23
                  Originally posted by burnt View Post
                  The reference being directed to your burial plot cost -
                  LMFAO, now it's funny.

                  Comment


                    #24
                    Originally posted by burnt View Post
                    The reference being directed to your burial plot cost -
                    Not o sure about your depreciation comment. Have you ever tried to buy or sell a preowned/used burial plot? Apparently evicting the tenant is frowned upon. Although they did it in Paris and filled the catacombs with the previous tenants.

                    Comment


                      #25
                      Originally posted by Richard5 View Post
                      This is what is on my corporate financial statement package.

                      Working capital ratio - At least 50%.

                      Target goal of debt to equity would be less than 40%

                      % owners equity - greater than 70%

                      I think all of these measurements depend somewhat on ones age and level of comfort. My accountant tells me that he has a number of clients that farm 1500-3500 acres that consistently put up accrued net income earnings of $125-175 per acre and 8000-10000 acre farms that can't get close to that.

                      Size doesn't always matter, its all management which is a broad term. Imo, its a slippery slope with every increasing technology and sales pitch to drive the latest and the best. Many farms don't have enough annual earnings to support the spending. Its only a matter of time before more and more fall.
                      Accountant has seconded that opinion, 2500 acre is sweet spot for family farm. Bigger and machinery gets doubled or increased in size to be timely, depreciable investment sky rockets. More hired bodies, more complication, more risk and sh*t happens. Ritchie's has some of that business. If not 2500, go for 10-20,000, the scale seems to cancel costs.

                      Comment


                        #26
                        Originally posted by fjlip View Post
                        Accountant has seconded that opinion, 2500 acre is sweet spot for family farm. Bigger and machinery gets doubled or increased in size to be timely, depreciable investment sky rockets. More hired bodies, more complication, more risk and sh*t happens. Ritchie's has some of that business. If not 2500, go for 10-20,000, the scale seems to cancel costs.
                        I think that number is somewhat area dependent. We combine 4500 acres per combine. I can see 3500 working but 2500 would be skinny.

                        But remember our goal is to reach slum of the ghetto status.

                        Comment


                          #27
                          Originally posted by LEP View Post
                          I think that number is somewhat area dependent. We combine 4500 acres per combine. I can see 3500 working but 2500 would be skinny.

                          But remember our goal is to reach slum of the ghetto status.
                          For sure area dependent, here we have usually dependable land and likely pretty decent net returns compared to lots of areas, but are definitely limited by environmental conditions. Not really too many operations over 2500acres here and in your comparison 2500 acres is really pushing a combine, pretty well anyone with those acreage will be running 2. Kinda amazes me when you sask and southern AB guys talk about the 10s of thousands of acres. Overall just different scenario I guess.

                          Comment


                            #28
                            Originally posted by AlbertaFarmer5 View Post
                            Not o sure about your depreciation comment. Have you ever tried to buy or sell a preowned/used burial plot? Apparently evicting the tenant is frowned upon. Although they did it in Paris and filled the catacombs with the previous tenants.
                            That plot is more of a long term commitment than an investment.

                            Comment


                              #29
                              Originally posted by LEP View Post
                              I think that number is somewhat area dependent. We combine 4500 acres per combine. I can see 3500 working but 2500 would be skinny.

                              But remember our goal is to reach slum of the ghetto status.
                              You really should aim for Outstanding Sandbox Farmer in the Slum of the Ghetto, I've been vying for it for years, even decades, and bring home the trophy every year! Not much of an honor anymore.....and pissing off the neighbors too.

                              Comment


                                #30
                                Originally posted by farmaholic View Post
                                That plot is more of a long term commitment than an investment.
                                If you are not too claustrophobic, could always sublet and make some income for eternity.

                                Comment

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