Is your farm in the realty business?

[Mufferaw]

In light of the Broadacres-Wigmore fiasco came across this link on a Twitter feed an hour ago.

http://www.realagriculture.com/2014/11/reasons-sell-land-lease-back-toronto-fund-managers-pitch/

[SASKFARMER3]

Why if you own it would you want to rent it back, once it's paid for cost per acre is taxes. Not sending a check to Toronto. Wtf

[Guest]

Sask Land Bank back or what ? They probably wont rent this out for not much more than taxes like land bank did though . Its all about taking control of farms and there are many different ways contol is being lost , this will just be one of them

[hobbyfrmr]

by selling the land you get cash you can send on newer more efficient machinery and inputs. There was a farmer of the year about 6? years ago who sold his (Dads?) land to assinaboia land corp, used the cash to rent something like 5000 acres with really modern machinery. That business model won them farmer of the year. They did have some one of alignment with Wigmore a few years back. According to the Ritchie Brothers they had lost rental contracts to other investor types so they had an auction sale a couple of years ago. It was 2 sets of new farm equipment. So that's pretty good, millionaires at 40 yeas old. Or maybe not. I really don't know the end result.
Go big for 10-15 years, scoop some cash and assets long the way then get out. Still young enough to do other work or be a chemical rep or consultant.

[furrowtickler]

Hobby , was that Norm Schoemaker?

[hobbyfrmr]

Yes I believe so. I went to university in the same time.

[Braveheart]

Wasn't part of the plan to invest some proceeds of the farmland sale into mutual funds? That would be prior to 2008?

[hobbyfrmr]

I never followed it too closely. I didn't understand it too well. Which takes us back to the original question. I think it's a matter of different business styles. My style has always been start from scratch and keep scratching!

[Richard5]

S3, the cost of land owned is a bit more than just taxes, its is also the opportunity cost of using that cash somewhere else - That's a big unknown

I do agree with why someone would do this if the financial strength of the business is in place.

What I can't figure out is why those who are not in the greatest finances keep spending or why the lenders keep lending.

Some farms need to learn the basic principles of our for-fathers.

a)If you don't have the cash you don't buy
b)If you do buy you better have a minimum of the 25%, a guidline that used to be enforced

Still to easy to get money in today's world

[SASKFARMER3]

Yes Richard I agree.

[bgmb]

Good way to ensure you wont be farming for much longer

[lakenheath]

How old are you hobbyfarmer?

[hobbyfrmr]

Lake, I am 44 today.
Good for nothing and hard on food!

[parsley]

A solid mighty land base is essential for a culture to survive. pars

[farmaholic]

What did you say hobby? Good hard on and food for nothing? Oh no, I forgot, thats conventional farming. (That's your last sentence a little jumbled up)