Farmland

Not trolling, serious question.

A family member passed - in his estate he left me farmland (wheat, not irrigated / corn, irrigated). I have been reading about a farmland bubble with the high prices and all - the price per acre has really sky-rocketed and I guess the thought process is that when (if) commodity prices slump / crash (when fed pulls back) that not only will the commodity prices slump, but that farm-land prices will see a dramatic fall.

The land is in kansas and nebraska and is managed by farmers - I just collect a paycheck and send in money for supplies every once in a while. The money is great right now, but I am wondering if anyone has any thoughts as to what I should do? Sell the land / Keep it ???

I can justify in my mind the idea that there is real demand behind the prices ( worldwide shortages, growing population / income levels in China leads to more wheat/corn consumption) but it seems like for every bubble there is a strong argument that there is real demand (everyone will buy everything on the internet, etc etc)......

I am young and have a good job / do not depend on the income. Also there is some oil/gas income, and I think that even if I sell the land I should retain the mineral rights (b/c all these new shale formations cropping up everywhere)

Any thoughts would be wonderful if anyone has an opinion or any experience with this type of thing.

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Comments (13)

May 21, 2011 - 10:58am

How much land are you talking about here? It sounds like a vast area. More information would be helpful.

If I had asked people what they wanted, they would have said faster horses - Henry Ford
May 21, 2011 - 11:22am

interesting story, I put this comment in to keep up on the post.

Get busy living
May 21, 2011 - 12:21pm

Keep the land in all seriousness. You have passive income with no initial investment. I would literally kill to have a nice spread like that. Besides, if you haven't noticed, the real estate market isn't exactly great right now.

May 21, 2011 - 12:46pm

On a personal note, if someone left you that they wanted you to have it to keep you secure for life. To sell it would be an insult, and also if they just wanted to hand you cash, they could have put that in the will too...

My vote, keep the land but do something creative with it, get involved with it. Whats the worst that can happen. Dont literally farm fields with your hands, but try and get to meet the people that work it etc. and do something new.

Youve been handed an incredible opportunity. Make the most of it.

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May 21, 2011 - 2:50pm
trazer985:
On a personal note, if someone left you that they wanted you to have it to keep you secure for life. To sell it would be an insult, and also if they just wanted to hand you cash, they could have put that in the will too...

My vote, keep the land but do something creative with it, get involved with it. Whats the worst that can happen. Dont literally farm fields with your hands, but try and get to meet the people that work it etc. and do something new.

Youve been handed an incredible opportunity. Make the most of it.


Yes. The other thing is this - having built in income frees you up to do what you really want to.....take advantage of this, as 99.999% of people are jealous of you. The other thing is that you are young: develope a plan over time to make the most of this.

Selling it off at the bottom of the realestate markey is probably not the best move.....

Get busy living
May 21, 2011 - 9:58pm
UFOinsider:
trazer985:
On a personal note, if someone left you that they wanted you to have it to keep you secure for life. To sell it would be an insult, and also if they just wanted to hand you cash, they could have put that in the will too...

My vote, keep the land but do something creative with it, get involved with it. Whats the worst that can happen. Dont literally farm fields with your hands, but try and get to meet the people that work it etc. and do something new.

Youve been handed an incredible opportunity. Make the most of it.


Yes. The other thing is this - having built in income frees you up to do what you really want to.....take advantage of this, as 99.999% of people are jealous of you. The other thing is that you are young: develope a plan over time to make the most of this.

Selling it off at the bottom of the realestate markey is probably not the best move.....

If I sold it, I would be hoping to sell near the top of the market (this is farmland, which has substantially increased in value in recent years, not residential real estate...)

May 21, 2011 - 6:22pm

To the OP, DON'T SELL! Particularly as you say you are in a comfortable financial position and have a good job so do not need the money that any sale would bring. Yes agricultural land prices have been been going up, but there is very good reason for this. The trends that you cite with regards to long term demand are very real, more importantly for you, however, is that the US is extremely well placed to supply that demand. There are very few other places which have the quality of infrastructure that the US does when it comes to agriculture (maybe Australia, but it's production is relatively small even though most goes to export). I would give you this advice even if there wasnt the added factor of mineral rights and potential royalty payments from oil/gas. I focus on this market so if you have any other questions PM me...if you really want to sell as well let me know and I'll buy :)

May 21, 2011 - 11:55pm

Keep it; passive income streams give you incredible freedom. There's a commodities bubble, but farmland is not where the bubble is...there are far greater barriers to entry than just buying fertile land (eg massive economies of scale, proprietary strains and chemicals, etc). And doesn't owning farmland generate a tax break, or some sort of subsidy?

Of course, if some oil corp discovers you are sitting on the modern equivalent of black gold, then I really don't know. I would hire a consultant or something in that case.

Actually, you probably should get an independent, professional advisor regardless, as opposed to consulting an online forum. 7000 acres probably generates some serious cash.

May 22, 2011 - 12:03am

Don't sell, I own some farmland too (way smaller than yours though) and was thinking of selling last November. Its just too convenient, even if you have it leased, at that size it should still give you a pretty nice paycheck should something happen to you or your job. Plus, as a friend of mine would say, they're not making any more of it.

People like Coldplay and voted for the Nazis, you can't trust people Jeremy
May 22, 2011 - 12:48am
Please don't make me talk to you like an asshole...
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