Re: Land and cattle prices.

From: vikki templeton (vtempleton@iprimus.com.au)
Date: Thu Feb 02 2006 - 18:59:14 EST

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Hello all,
Just on Tim's point on land values and cattle prices.
The higher price of land has allowed a lot of farmers to at least walk away
from the industry with some money in their pockets. It also means that the
new owner of that property has to also get another 30% return on his
investment from the same farm that the last fella struggled to justify
keeping on it's value.
That is for a $1,000,000 farm to be viable against bank interest, it needs
to generate at least $60,000 return at 6%. The new farmer, same farm, now
worth $1,300,000 has to generate a return of investment of $78,000. Pretty
hard task when costs keep rising no matter how efficient the new farmer is,
for that farm to generate another $18,000 to justify its worth as a
business.
In regards to cattle prices lifting, is probably due to the lack of
replacements, thanks to the export job.
What is going to happen when that nice little side order is no longer going
to be available as an income prop?
Thanks
Vikki

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Hello =
all,<o:p></o:p>

Just on =
Tim’s
point on land values and cattle prices.<o:p></o:p>

The higher =
price of
land has allowed a lot of farmers to at least walk away from the =
industry with
some money in their pockets. It also means that the new owner of that =
property
has to also get another 30% return on his investment from the same farm =
that
the last fella struggled to justify keeping on it’s
value.<o:p></o:p>

That is =
for a $1,000,000
farm to be viable against bank interest, it =
needs to
generate at least $60,000 return at 6%. The new farmer, same farm, now =
worth $1,300,000
has to generate a return of investment of $78,000. Pretty hard task when =
costs
keep rising no matter how efficient the new farmer is, for that farm to
generate another $18,000 to justify its worth as a =
business.<o:p></o:p>

In regards =
to
cattle prices lifting, is probably due to the lack of replacements, =
thanks to
the export job.<o:p></o:p>

What is =
going to
happen when that nice little side order is no longer going to be =
available as an
income prop?<o:p></o:p>

Thanks<o:p>=
</o:p>

Vikki<o:p><=
/o:p>

<o:p> =
</o:p>

<o:p></o:p>

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</body>

</html>

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Next message: Trevor Mills: "Re: Land and cattle prices."
Previous message: Pam and David Wilson: "Re: Re:Dairying"
Next in thread: Trevor Mills: "Re: Land and cattle prices."
Maybe reply: Trevor Mills: "Re: Land and cattle prices."
Maybe reply: Mrs CAROL LANDY: "Re: Land and cattle prices."
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