Is agricultural land a good investment?
Discussion
Well, we've been farming crops for a while, it's not like we ever stopped....
If you are looking to make a big gain, you've probably missed the boat. Arable prices have already risen over the last few years, with a combination of scarcity (no-one is selling) and grain prices the reason. As a safe haven, land has always been a good place to be - they don't make any more of it. However the returns from it, even with grain values doubling, are not great - all the other cost inputs are going up too.
As the safest possible element of a range of investments, good idea. Otherwise, unless you are rolling your sleeves up yourself and driving your John Deere, you might be disappointed by what it earns you.
If you are looking to make a big gain, you've probably missed the boat. Arable prices have already risen over the last few years, with a combination of scarcity (no-one is selling) and grain prices the reason. As a safe haven, land has always been a good place to be - they don't make any more of it. However the returns from it, even with grain values doubling, are not great - all the other cost inputs are going up too.
As the safest possible element of a range of investments, good idea. Otherwise, unless you are rolling your sleeves up yourself and driving your John Deere, you might be disappointed by what it earns you.
Leithen said:
Well, we've been farming crops for a while, it's not like we ever stopped....
If you are looking to make a big gain, you've probably missed the boat. Arable prices have already risen over the last few years, with a combination of scarcity (no-one is selling) and grain prices the reason. As a safe haven, land has always been a good place to be - they don't make any more of it. However the returns from it, even with grain values doubling, are not great - all the other cost inputs are going up too.
As the safest possible element of a range of investments, good idea. Otherwise, unless you are rolling your sleeves up yourself and driving your John Deere, you might be disappointed by what it earns you.
Well...If you are looking to make a big gain, you've probably missed the boat. Arable prices have already risen over the last few years, with a combination of scarcity (no-one is selling) and grain prices the reason. As a safe haven, land has always been a good place to be - they don't make any more of it. However the returns from it, even with grain values doubling, are not great - all the other cost inputs are going up too.
As the safest possible element of a range of investments, good idea. Otherwise, unless you are rolling your sleeves up yourself and driving your John Deere, you might be disappointed by what it earns you.
I was thinking of the land as a background investment to augment income that could be produced from the land. I was thinking predominantly of equestrian use - mainly livery, and help my little sister get her racehorse retraining enterprise off the ground.
I could also run several other elements alongside - Riding Lessons, Coffee shop, maybe even move my cab business onto the land to save on rent etc...
You grow crops, I take it... What do you grow and how do you sell your produce? Are there still massive subsidies to stop you using the land, or can you ignore these if you don't take the payments?
KingRichard said:
I was thinking of the land as a background investment to augment income that could be produced from the land. I was thinking predominantly of equestrian use - mainly livery, and help my little sister get her racehorse retraining enterprise off the ground.
First thoughts - if it's livery and grazing you are thinking of, then you don't need good arable land - grazing can be substantially cheaper, if still hard to find. You will however need to look into all the planning requirements for such an enterprise in detail. Not just stables etc, but road access, utilities....KingRichard said:
I could also run several other elements alongside - Riding Lessons, Coffee shop, maybe even move my cab business onto the land to save on rent etc...
Again, you need to take advise on the land use side of planning etc.KingRichard said:
You grow crops, I take it... What do you grow and how do you sell your produce? Are there still massive subsidies to stop you using the land, or can you ignore these if you don't take the payments?
We have a mixed operation, producing beef and arable, but this is a relatively large concern (although not of the scale of some southern arable farms that have several thousand acres). The word of the last few years has been de-coupling. This means subsidies are no longer production related. So we now have the Single Farm Payment that gives a decreasing amount of the historic subsidies farmers have received. This is meant to gradually wean the industry off support. The Scottish and English versions are different, but it sounds that you would be much more likely to be looking for business related subsidies, grants etc to help whatever you are trying to do with your Sister. If you invest in land surplus to requirement, you would probably be best to look to find "marching" farmers who might rent the ground off you.What's the best way to get my hands on some land then? I need to go and buy a house in the next year or so anyway (been waiting for this market to drop for three years!). Maybe I can raise the money for a house with some land.
Is it possible to get an agricultural mortgage that will take account of income from land?
Is it possible to get an agricultural mortgage that will take account of income from land?
Agri land for conversion into a riding school will require power and buildings and planning, if theres a hope of getting these then you wont be able to buy the land at agri prices.
If you're buying land as an investment, you're probably best off leasing to a an arable farmer to grow on, rather than doing it yourself, unless of course you know what you're doing with arable.
If you're buying land as an investment, you're probably best off leasing to a an arable farmer to grow on, rather than doing it yourself, unless of course you know what you're doing with arable.
Plotloss said:
Agri land for conversion into a riding school will require power and buildings and planning, if theres a hope of getting these then you wont be able to buy the land at agri prices.
If you're buying land as an investment, you're probably best off leasing to a an arable farmer to grow on, rather than doing it yourself, unless of course you know what you're doing with arable.
Arable farming? Not a fIf you're buying land as an investment, you're probably best off leasing to a an arable farmer to grow on, rather than doing it yourself, unless of course you know what you're doing with arable.
king scooby... 
It's not really so much a matter of investment... it's really me just wanting to know if land prices are set to go up over the next 10-20 years. I'd like to set up the equestrian business anyway but with an emphasis on using the land as productively as possible - which I guess is tougher because of all the planning laws etc.
dcw@pr said:
KingRichard said:
dcw@pr said:
In south Cambs agricultural land has gone from £3k to £7k per acre in the last few years. You can lease it to a contract farmer for ~£100/acre plus a share of profit
£100 an acre per... month/year?edb49 said:
dcw@pr said:
KingRichard said:
dcw@pr said:
In south Cambs agricultural land has gone from £3k to £7k per acre in the last few years. You can lease it to a contract farmer for ~£100/acre plus a share of profit
£100 an acre per... month/year?edb49 said:
dcw@pr said:
KingRichard said:
dcw@pr said:
In south Cambs agricultural land has gone from £3k to £7k per acre in the last few years. You can lease it to a contract farmer for ~£100/acre plus a share of profit
£100 an acre per... month/year?Is agricultural land a good investment? Yes (in my biased opinion) but probably not in the UK. The costs (land/labour/fuel/fetilizer/taxes) make it prohibitive. You’d probably need 1,000 hectares for it to be worthwhile in the UK.
We’ve got 60,000 hectares in South America and Europe and are achieving 15-20% annual yields for our investors.
You’ll have seen rising food prices are in the news on a daily basis – it’s the same worldwide. Many countries are buying up farm land overseas to secure food supplies. Factor in the East getting richer and eating more/switching to protein based diets and throw in climate change/subsequent crop damage and you get demand out-stripping supply.
It’s also being seen as a safe bet in this current economic climate. You’re not going to see the West eating less as their economies downturn and populations become poorer - they’ll consume the same volume of food but just buy cheaper versions of it eg. Shopping in Aldi instead of Tesco.
I see Schroders is launching another agricultural fund, only a few months after closing its £3 billion agriculture fund due to excessive investor demand.
Grebbo said:
Bubble! UK agricultural land has been driven up by speculators/funds etc.
Yes, funds and foreign investors have been getting back in recently. Not sure you need all that much to make a living, given SFP etc.Grebbo said:
We’ve got 60,000 hectares in South America and Europe and are achieving 15-20% annual yields for our investors.
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