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Cost vs Return of Farmland, Opinions please
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NDCat99
Posted 6/13/2022 13:25 (#9703376 - in reply to #9703167)
Subject: RE: Cost vs Return of Farmland, Opinions please


E ND
You have to start with the easy math. Have you talked to a banker and looked at the actual $$ per year on the note taking into account the sale and any equity from your old place? Will they look at the option of splitting off the home and/or facilities from the land note? This may give you some different financing options and longer terms on part of the deal which helps the annual cash outlay.

How much of the new setup do you need to create the same revenue you have today? How much revenue will those new facilities allow you to generate and will the market sustain that level of production?

Do you need all 155 acres of land base to run your operation? If not and it's parceled out in a way that works you can look at year to year cash renting pasture or cropland to help with cash flow OR I'd recommend adding some commercial production to your plan, possibly in the cow/calf side. That would help spread the costs over more sales and give you some flexibility in the way you market that product with some fall-back (at a lower margin) way to move inventory you don't need.

Hunting leases, mineral (gravel?) deposits, timber, hay are all potential opportunities for additional cash flow depending on the location, type of land, your interests, etc.
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