.........reasonable valuation.

[farmaholic]

Warren Buffet, of Berkshire Hathaway was reported to have said:

"Berkshire Hathaway will only do a deal at a reasonable valuation"

I wonder if this is advice farmers should heed when buying farmland.

What ROI can be earned to determine a reasonable asset valuation. 2,3 or 5%, 7%?

What about the assets ability to generate enough income to pay for it's purchase.

What about the assets ability to appreciate, over what time frame.

Do Buffet's investments require subsidization to make sense? (Oxymoron to the max)

Does Berkshire Hathaway buy bubbles?

[blackpowder]

Your competition for that land next door isn't a publicly traded company whose execs all graduated from the same business school.
Eventually the better question might be; At what age do I want to be debt free? Or, what does my retirement look like? Or, what does my kids future on this land look like?
Still trading at $3500-$4500 here.

[bucket]

blackpowder

At those levels retirement looks pretty good...no?

[Bowerpower]

blackpowder

At those levels retirement looks pretty good...no?

Depends if you want the next generation to farm?

[iceman]

At the end of the day it is a productive asset and it will all depend if you are thinking of leaving a generational asset or putting it into cash.

Nothing wrong with putting it into cash but cash is easily spent by heirs on nonproductive assets.

Iceman Out

[AlbertaFarmer5]

Keeping that in mind, Warren Buffet's son owns ( and oversees, not clear what that entails ownershipwise) farmland and is actively farming in Decateur Illinois. Perhaps reasonable valuation doesn't apply in this case, or it is reasonable to him?

[farmaholic]

Keeping that in mind, Warren Buffet's son owns ( and oversees, not clear what that entails ownershipwise) farmland and is actively farming in Decateur Illinois. Perhaps reasonable valuation doesn't apply in this case, or it is reasonable to him?

AF5, I posted and deleted a long post showing, at fixed rental rates(90, 70 and 50 $/ac) and at differnt expected ROIs(3.5,5 and 7%) what the purchase price of the land should be(for a cash investor) . It showed you had to spend alot of money for a meager return based on fixed rental rates...when rental rates dropped it got ugly(land was definitely overpriced). It was an interesting exercise but who the **** cares, too many hungry producers willing to make it worth investors while.

Then a snap shot of reality for a producer to purchase and pay for land after a 25% down payment and 15, 20 and 25 year terms at 5% interest and the yearly payments and those payment costs per acre....there too, I think I was only pointing out what everyone already knows. ..so who cares.

[farmaholic]

She all went 50 ! No need for sask crop insurance employees !

50 x 12= 600 Hun an acre !

+ 500 000 or + 120 !

Reasonable valuation !

Sure, OK... not here. Maybe once in a lifetime.

[farmaholic]

Are u buying that land or u waiting for doomsday ??

Define "doomsday":

...Never

...Correction

...Crash

...tomorrow

...next week

...next year

...yesterday....

[sumdumguy]

Just resurrect the CWeiner Board and watch land values tank.

[SASKFARMER3]

Wow wise you just seed canola canola your some genius. Club root here we come.

It’s a long term thing.

I’ll still wait and not really caring if land goes up some more. If it drops we go to plan A and buy if not it’s plan B steady as it goes half wheat half canola or just a little variation.

But land at 400 or 500 a quarter in areas thy if it gets dry won’t grow back shit makes no Sence.

If I farmed in these areas I would liquidate the whole farm and sit back three years and then triple my farm size.

Those that think it can’t happen or won’t hahaha I say I seen it twice in my farming life watch history does repeat.
And now with huge debt levels by farmers it will happen sooner than later.

[bucket]

Buy at these prices and worse case you might have to ask for a write down. ..

Some guys here bought land years ago at like 40K a quarter....had it written down to pennies on the dollar....barely made it....and are now back at it with the next generation to do it all over again...

Buy the land. If there are two guys bidding there will always be a sale.

[biglentil]

Lets see land was $30 an acre in the 50's now its $3000. Geeze can anybody see a trend?

[farmaholic]

Lets see land was $30 an acre in the 50's now its $3000. Geeze can anybody see a trend?

You better have the time(on your side) and resources to ride the roller coaster named "Trend". Most roller coasters I've seen don't only climb... This one is a looooong ****ing ride.

[SASKFARMER3]

Wow and my home was 240 new and now close to a million? Who cares we all need a home same with land you need some can’t rent it all even if some BTOs think they can.

Land was 200000 in our area in 1981 then 56000 and now 400000 and your point.

It can drop and it can go down watch if your I. A dry year for three in a row. The BTOs disappear when the big boys from Toronto (TD RBC BofM BofN) call the shots and cut them off.

To big to fail hahahahah ahh