AgTalk Home
AgTalk Home
Search Forums | Classifieds (10) | Skins | Language
You are logged in as a guest. ( logon | register )

Buying land economics
View previous thread :: View next thread
   Forums List -> AgTalk CafeMessage format
 
regularben
Posted 1/12/2026 05:06 (#11506472 - in reply to #11506274)
Subject: RE: Buying land economics


coup - 1/11/2026 20:26

regularben - 1/11/2026 08:31

LOL. 85% of farmland in the crown jewel of the corn belt (Iowa) is debt free. No debt, none.


85% of paid for acres in a farm operation that would own 3000 acres doesn't = a pile of cash to buy the last 15% without borrowed money.

You can LOL all you want. While there is a lot equity in farm operations currently , there is not the kind of cash it takes to buy several hundred acres @ current prices in the majority of farm operations. Liquidity in a lot of farm operations was better 2- 3 years ago than what it is currently.

3000 acres x 85% = 2550 debt free acres Say.the last 450 acre bought cost $7 million. How many farm operations are setting on $7 million cash?

To get $7 million after tax $ , would require paying income tax on around $1 million per year for 14 years. How many farm operations have paid taxes on $1 million for 14 years?


No kidding? You think the guys who are buying land today have piles of cash sitting around, earning at best 2-3%? Of course not. Look at the returns over the last 10 years in the SP 500, a taxable brokerage account(with 100% liquidity) is a prudent to park cash while waiting on the next piece to come up for sale.

I really don't understand why this concept is so out of left field for you. You seem to be saying it is impossible. But, if it were impossilbe, why are guys doing it?

As for your last question about the million $ per year for the last 14 years, my asnwer is a smiple, " more than you know".
Top of the page Bottom of the page


Jump to forum :
Search this forum
Printer friendly version
E-mail a link to this thread

(Delete cookies)