Farmland Investing

Z

zargor

Member
Hi All

Has anyone looked at investing in Australian farmland, either through an SMSF or other entity?

Through a bit of research, it would appear that most farmland investments are geared towards the big end of town or for those with a few million to spare.

Does anyone know if there are opportunities at the lower end of town for retail investors? I'm aware that there are some managed funds springing-up to cater for this area, however, I'me always gun-shy of managed funds and prefer something leaning towards a more "direct" ownership.

Any ideas, thoughts, experiences anybody has had?

Zargor :)
 
Did you hear about the farmer who won lotto? They interviewed him and asked him what he planned to spend it all on, he said he'd probably just keep farming 'till its all gone.
 
Buy a small lot of land.
1/2/3000 sq ft.

Enough for family & barter of produce.

Get a bunch of hairy freaks to work for free tent space.

Become a land Barron.
 
Hmmmmm, well at least I'm getting some good quotes!

Still, has to be some sort of opportunity with arable land, given population increases in future and middle classes in other countries looking at more protein-rich diets.

Zargor
 
zargor said:
Hmmmmm, well at least I'm getting some good quotes!

Still, has to be some sort of opportunity with arable land, given population increases in future and middle classes in other countries looking at more protein-rich diets.

Zargor
Click to expand...
What price range are you thinking?
 
zargor said:
Hmmmmm, well at least I'm getting some good quotes!

Still, has to be some sort of opportunity with arable land, given population increases in future and middle classes in other countries looking at more protein-rich diets.

Zargor
Click to expand...

Water willbe your number one.

BLUE GOLD.........

Find a location near the main source.

I know of head water source locations in Tassie that are locked and loaded for future use.

Main source is in national parks & also flows in dry times.......

Get the water to get the crops.
 
you could purchase a small farm through your SMSF and lease it to yourself and your wife. The lease payments would go towards the loan along with your superannuation contributions.
Look it up on the net.

In saying that though I reckon youd want to enjoy the simple life from that point on becasue there aint a lot of money in it
 
I've looked at this zagor and unless you're on good water you're really pushin' you-know-what uphill.

There seem to be a lot of prickle farms around at the mo.

Cubby Station couldn't make money growing cotton with Govt Sanctioned water rights.
All the Forestry Schemes went bust a few years ago...couldn't even grow timber trees.
Sugar has gone to pot with the Brazilians taking over the market.
The US is set up for Corn and Beef
Forget about Wheat (I read that without the E.U. holding it back from over production, the U.K. alone could get 6 crops per year in thanx to their wheat strains, climate and modern agroscience techniques (including the down time over winter).
The Argentinians have Beef and Soy sown up ('scuse the pun)
Wine lake (hobby farms and such getting ripped up everywhere)
Milk Ocean (Milk wars killing small dairies)
Do I need to mention Alpaccas or Emu farms?
I saw a segment on Vanilla Bean on landline on the weekend. $5 per bean...but I've never seen such a labour intensive product.

But seriously... AT THE MOMENT... it's probably not the best use of your capital. We are headed for a food crisis...but I think it's too early to get set-up.
 
Clawhammer said:
I've looked at this zagor and unless you're on good water you're really pushin' you-know-what uphill.

There seem to be a lot of prickle farms around at the mo.

Cubby Station couldn't make money growing cotton with Govt Sanctioned water rights.
All the Forestry Schemes went bust a few years ago...couldn't even grow timber trees.
Sugar has gone to pot with the Brazilians taking over the market.
The US is set up for Corn and Beef
Forget about Wheat (I read that without the E.U. holding it back from over production, the U.K. alone could get 6 crops per year in thanx to their wheat strains, climate and modern agroscience techniques (including the down time over winter).
The Argentinians have Beef and Soy sown up ('scuse the pun)
Wine lake (hobby farms and such getting ripped up everywhere)
Milk Ocean (Milk wars killing small dairies)
Do I need to mention Alpaccas or Emu farms?
I saw a segment on Vanilla Bean on landline on the weekend. $5 per bean...but I've never seen such a labour intensive product.

But seriously... AT THE MOMENT... it's probably not the best use of your capital. We are headed for a food crisis...but I think it's too early to get set-up.
Click to expand...

Sugar is near record prices and the Industry exports 80% of the total annual output.

Brazil is only one of Australia's competitors though can not match our productivity and quality.

The net returns using a full sub contractor model ( running by remote control) are from 5.5 to 8% depending on the farm.

These investments are suited to those with NO borrowings.

A SMSF is ideal.

You will need 350-500 K to get a good small sugar cane farm

(http://www.childersfn.com.au/index....onid=1241&MenuItemID=25498&subject=Cane_Farms)

They must be in areas with full underground irrigation and drought proof.

The Bundaberg and Childers region in Qld is one such area.

The Isis Mill that services this major area is also grower owned and not owned by the Chinese or Singaporeans.

I personally think that now is the time to invest in this asset class if you are going to as I think another 5 years will be too late.

I think it also suits those that have an affinity with the land as it does give some intrinsic returns as well IMO.
 
179_sugar.jpg

http://www.indexmundi.com/commodities/?commodity=sugar&months=180

Sugar is high...but not near it's record...and volitility has been increasing due to brazil and increasing use of High Frutose Corn Syrup from the U.S. which is being hitby a drought over there...droughts end.

I'm not saying sugar isn't good now...but the fundamentals don't look good for it's future in Australia.
 
Sorry folks,

You are looking at feeding the masses and investing in something you do not have a y control over.

Look after you own self and go low key and self managed.
Why put your $$$$ into something you do not control?
 
hiho said:
you could purchase a small farm through your SMSF and lease it to yourself and your wife. The lease payments would go towards the loan along with your superannuation contributions.
Look it up on the net.

In saying that though I reckon youd want to enjoy the simple life from that point on becasue there aint a lot of money in it
Click to expand...
Doesn't this need to be at arms length?
 
Clawhammer said:
http://forums.silverstackers.com/uploads/179_sugar.jpg
http://www.indexmundi.com/commodities/?commodity=sugar&months=180

Sugar is high...but not near it's record...and volitility has been increasing due to brazil and increasing use of High Frutose Corn Syrup from the U.S. which is being hitby a drought over there...droughts end.

I'm not saying sugar isn't good now...but the fundamentals don't look good for it's future in Australia.
Click to expand...

I disgaree.The fundamentals are very sound when you know them all or most of them.

I thought the Graph actually does tell a positive story in a very simple way?

Though not the full story.

Farmers get paid by the Mill on Raw Cut Tonnage not directly to the sugar price though obviously it is important.

Farms in this area I refer to yield from 80-105 Tons of Raw Cut Cane /Ha and currently get paid about $38/ton.

Other countries like Brazil etc would be lucky to get 40-70 Tons/Ha.

The Australian cane also has a very high sugar content due to superior plant management techniques and growing practices .This high sugar yield coupled with the high/ha Raw cane production capacity sets Australia apart from India,Brazil and Thailand that often over cultivate their farms at the expense of yield.

Many farms in these countries don't fallow their land through rotational crops and planting with the consequent deletion of raw cane yield /Ha and sugar content.

Generally they disregard the problems with a monoculture farm and the associated grubs in the cane stools that follow.

Australian Sugar is the most advanced in the World with nearly 80 years of CSIRO research backing it.

There is more to it than a simple price graph.( Just like any commodity)

The point is that even with Sugar price movements consistent high yielding raw tonnage farms can produce very consitant returns over a 5 year cycle.

The area I refer to is world renowned Sugar Cane Agricultural land.

Why do you think the Chinese land weekly in Bundaberg from Brisbane buying up this land?
 
boneyard said:
Sorry folks,

You are looking at feeding the masses and investing in something you do not have a y control over.

Look after you own self and go low key and self managed.
Why put your $$$$ into something you do not control?
Click to expand...
Like Silver?
 
I've looked into this as part of a larger project (and will probably revisit it in a few years).

I'd only really be comfortable investing in this area is if there are a number of complementary components in a traditional mixed farm/agriculture/value-added business.

Buying a massive chunk of land and growing X is way too specific and outside my area of knowledge and expertise.
 
Clawhammer said:
I've looked at this zagor and unless you're on good water you're really pushin' you-know-what uphill.

There seem to be a lot of prickle farms around at the mo.

Cubby Station couldn't make money growing cotton with Govt Sanctioned water rights.
All the Forestry Schemes went bust a few years ago...couldn't even grow timber trees.
Sugar has gone to pot with the Brazilians taking over the market.
The US is set up for Corn and Beef
Forget about Wheat (I read that without the E.U. holding it back from over production, the U.K. alone could get 6 crops per year in thanx to their wheat strains, climate and modern agroscience techniques (including the down time over winter).
The Argentinians have Beef and Soy sown up ('scuse the pun)
Wine lake (hobby farms and such getting ripped up everywhere)
Milk Ocean (Milk wars killing small dairies)
Do I need to mention Alpaccas or Emu farms?
I saw a segment on Vanilla Bean on landline on the weekend. $5 per bean...but I've never seen such a labour intensive product.

But seriously... AT THE MOMENT... it's probably not the best use of your capital. We are headed for a food crisis...but I think it's too early to get set-up.
Click to expand...

Noticed you mentioned the milk ocean in post^^^^..What a sad time it is to see diary farms in Qld going to the walls because of the milk war that rages between woolies and coles..I hate to think what will happen if mad cow disease ever breaks out in Victoria..The milk industry deregulation plan is an absolute disaster and the country area politicians should bow their heads in shame for sitting this happen...Now NZ has a far more efficient diary industry than Victoria so I suppose it will be only a matter of time before there will be no diary industry in Australia.

Agree with your post ^^Be careful if you want to be a farmer!



Regards Errol 43
 
Nedsnotdead said:
hiho said:
you could purchase a small farm through your SMSF and lease it to yourself and your wife. The lease payments would go towards the loan along with your superannuation contributions.
Look it up on the net.

In saying that though I reckon youd want to enjoy the simple life from that point on becasue there aint a lot of money in it
Click to expand...
Doesn't this need to be at arms length?
Click to expand...

I have read examples of small business doing this with cafes, restaurants etc, but not a farm so you may be right, will do some digging
 
hiho said:
Nedsnotdead said:
hiho said:
you could purchase a small farm through your SMSF and lease it to yourself and your wife. The lease payments would go towards the loan along with your superannuation contributions.
Look it up on the net.

In saying that though I reckon youd want to enjoy the simple life from that point on becasue there aint a lot of money in it
Click to expand...
Doesn't this need to be at arms length?
Click to expand...

I have read examples of small business doing this with cafes, restaurants etc, but not a farm so you may be right, will do some digging
Click to expand...

A friend just purchased 100 acres using his SMSF. He's leasing it back to his company, and he intends on living at the property. Not sure how legit the whole arrangement is. Knowing him it probably isn't, but who is going to find out?
 
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