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Well put Vikki and spot on. Also from what I see around here land price =
increases have nothing to do with the profitability or otherwise of =
dairy farming. If you were to be realistic about land prices for dairy =
farming they would need to be about half what they are now.
As for Tim's point on cattle prices rising, I think he needs to get out =
to a few more dairy sales. I have been dairy farming for the past 9 =
years and I have never reared any of my own replacements I always =
purchase what I need generally 2yr old heifers. In those nine years I =
have paid an average of between $600 - $750 a head for my replacements. =
In other words the price of cattle hasn't changed much in those 9 years. =
Sure you can go to some dairy sales and pay $1500 a head for cows and =
people think the dairy cattle market is on fire. But the reality is =
somewhat different, like I said in my last email, it all comes down to =
averages.=20
Just for the record in case people are wondering, I have always made a =
profit from my dairy farm. But I pity any young person trying to make a =
start in the industry. Anyone who sits down with a calculator will soon =
realise that any profit you make from dairying will barely be enough to =
meet all you repayments as well as living costs, and forget about =
improvements around the farm.
Trevor Mills
----- Original Message -----=20
From: vikki templeton=20
To: vicdairy-l@unimelb.edu.au=20
Sent: Thursday, February 02, 2006 6:59 PM
Subject: Re: Land and cattle prices.
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
=20
=20
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<DIV><FONT face=3DArial size=3D2>Well put Vikki and spot on. Also from =
what I see=20
around here land price increases have nothing to do with the =
profitability or=20
otherwise of dairy farming. If you were to be realistic about land =
prices=20
for dairy farming they would need to be about half what they are=20
now.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>As for Tim's point on cattle prices =
rising, I think=20
he needs to get out to a few more dairy sales. I have been dairy farming =
for the=20
past 9 years and I have never reared any of my own replacements I=20
always purchase what I need generally 2yr old heifers. In =
those nine=20
years I have paid an average of between $600 - $750 a head =
for my=20
replacements. In other words the price of cattle hasn't changed much in =
those 9=20
years. Sure you can go to some dairy sales and pay $1500 a head for cows =
and=20
people think the dairy cattle market is on fire. But the reality is =
somewhat=20
different, like I said in my last email, it all comes down to averages.=20
</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>Just for the record in case people are =
wondering, I=20
have always made a profit from my dairy farm. But I pity any young =
person trying=20
to make a start in the industry. Anyone who sits down with a calculator =
will=20
soon realise that any profit you make from dairying will barely be =
enough to=20
meet all you repayments as well as living costs, and forget about =
improvements=20
around the farm.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Trevor Mills</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dvtempleton@iprimus.com.au=20
href=3D"mailto:vtempleton@iprimus.com.au">vikki templeton</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dvicdairy-l@unimelb.edu.au=20
=
href=3D"mailto:vicdairy-l@unimelb.edu.au">vicdairy-l@unimelb.edu.au</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Thursday, February 02, =
2006 6:59=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: Land and cattle=20
prices.</DIV>
<DIV><BR></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: Arial">Hello =
all,<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: Arial">Just =
on Tim=92s=20
point on land values and cattle prices.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: Arial">The =
higher=20
price of land has allowed a lot of farmers to at least walk away from =
the=20
industry with some money in their pockets. It also means that the new =
owner of=20
that property has to also get another 30% return on his investment =
from the=20
same farm that the last fella struggled to justify keeping on <SPAN=20
class=3DGramE>it=92s</SPAN> value.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: Arial">That =
is for a=20
$1,000,000 farm to be viable against bank <SPAN =
class=3DGramE>interest,</SPAN>=20
it needs to generate at least $60,000 return at 6%. The new farmer, =
same farm,=20
now worth $1,300,000 has to generate a return of investment of =
$78,000. Pretty=20
hard task when costs keep rising no matter how efficient the new =
farmer is,=20
for that farm to generate another $18,000 to justify its worth as a=20
business.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: Arial">In =
regards to=20
cattle prices lifting, is probably due to the lack of replacements, =
thanks to=20
the export job.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: Arial">What =
is going=20
to happen when that nice little side order is no longer going to be =
available=20
as an income prop?<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: =
Arial">Thanks<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: =
Arial">Vikki<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 150%"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; LINE-HEIGHT: 150%; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
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style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial"><SPAN=20
style=3D"mso-spacerun: =
yes"> </SPAN><o:p></o:p></SPAN></FONT></P></DIV></BLOCKQUOTE></BODY>=
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