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Thread: Land Rents

  1. #1
    woodywellingtons
    Guest

    Land Rents

    Just a quick thanks to the guy who paid over 200 for that land at Blenheim.
    Every agent in the country is now using the figure for rent reviews.
    Just been served notice to quit an FBT so they can advertise next year, they want 225 an acre with no sps......and this is not cambs/lins/hereford type soil.....grade 3 , 3 tonne land.:cry:
    Makes my previous 55/acre look miserly.

    Main point though, how do I farm the land this year?
    Looking to maximise GM without contributing to future fertility as I normally do.

    PS
    My other landlord has appreciated the way I have managed his farm, and kept it in a good state, so we have agreed a sensible mutually agreeable price.

    PPS
    What is SPS entitlement worth?

  2. #2
    Johndeere
    Guest

    Re: Land Rents


  3. #3
    woodywellingtons
    Guest

    Re: Land Rents

    Did you get the farm near you at Swindon, JOHNDEERE?

  4. #4
    Minesapint
    Guest

    Re: Land Rents

    I,m in the same situation on a small block, notice to quit next year because the agent wants silly rent and SFP, on what is cold and wet clay which will do 3t in a good year! Have always farmed it properly, looked after P&k etc, but it is marginal land with limited crop options. The Blenheim block has set a precedent unfortunately, but I will happily walk away and let some fool lose money.
    I was going to try OSR this year which would have been a big gamble, but was thinking of a nice early wheat entry next year. I will now put it into winter barley (3rd cereal), grow it as cheaply as possible and walk away graciously, wishing the next man all the very best of luck!!

  5. #5
    Johndeere
    Guest

    Re: Land Rents

    Quote Originally Posted by woodywellingtons View Post
    Did you get the farm near you at Swindon, JOHNDEERE?
    No my friend, do you know who did?

  6. #6
    TDW
    Guest

    Re: Land Rents

    You should have a record of condition, this should include any value in fencing or soil fertility which you have invested in, and you should be compensated for it.

  7. #7
    oxonfarmer
    Guest

    Re: Land Rents

    Quote Originally Posted by Johndeere View Post

    your the one who bid over 200 at woodstock

  8. #8
    Johndeere
    Guest

    Re: Land Rents

    Quote Originally Posted by oxonfarmer View Post
    your the one who bid over 200 at woodstock

    Thanks for reminding me, we better get the cultivator out!

  9. #9
    wellingtonfarmer1
    Guest

    Re: Land Rents

    Some bloke in Herefordshire just paid 260acre for 5 year fbt, ground that you can only plant 70/100 acres in potatoes. There were 3 other bids over the 200 quid mark.

    If he can make money at that he is a better farmer than I am...

  10. #10
    Croker
    Guest

    Re: Land Rents

    I've always thought that for FBT a variable rent would suit landowner/contractor bext in the long term set at about 1T wheat worth maybe plus 10/20 ac. So at the moment I would be happy to bid 170/ac inc SPS. Doesn't look like I'll be expanding in the nesr future does it? Did buy 80 ac last year, best thing i've done for a while it's my pension pot!

  11. #11
    NeilO
    Guest

    Re: Land Rents

    Quote Originally Posted by Johndeere View Post
    Quote Originally Posted by oxonfarmer View Post
    your the one who bid over 200 at woodstock
    Quote Originally Posted by Johndeere View Post
    Thanks for reminding me, we better get the cultivator out!
    Ooooh goody, we have access to one of 'them'.

    Now it's a done deal (for considerably more than 200/ac), do you mind explaining how you would justify that tender? T'is a serious request btw.

  12. #12
    bri
    Guest

    Re: Land Rents

    Heard of about 5 recent FBT rents going for over 200/acre and as you say it seems to be setting a precedent however this are exceptional cases and you cannot expect all land to achieve this value although i guess land owners will like to think so.

    Some farms that are large and have many AHA and FBT type tenancies may well be farming land for very low rents therefore add in rent at 200/acre plus then it is possible to have an average rent across all farms on various tenancies to be well below 200/acre and they get economies of scale on the larger area.

    The worry is that with prices at this level we will see many more smaller farms being taken on by larger farms and making it even more difficult for new entrants to get in and expand.

  13. #13
    aardvark
    Guest

    Re: Land Rents

    Sensible landowners and agents are not always taking the highest tendered rent for land though.
    They are not all stupid, so know that some farmers tender high rents expecting to negotiate it down in the first few years (I know this was not the case with Blenheim as it's index linked).

    We all know these rents are silly but some semblance of normality will be restored when increasing costs bite home.

    I hope this is the case when I renegotiate next year. Anyway, fingers crossed.

  14. #14
    Badshot
    Guest

    Re: Land Rents

    Quote Originally Posted by bri View Post
    Heard of about 5 recent FBT rents going for over 200/acre and as you say it seems to be setting a precedent however this are exceptional cases and you cannot expect all land to achieve this value although i guess land owners will like to think so.

    Some farms that are large and have many AHA and FBT type tenancies may well be farming land for very low rents therefore add in rent at 200/acre plus then it is possible to have an average rent across all farms on various tenancies to be well below 200/acre and they get economies of scale on the larger area.

    The worry is that with prices at this level we will see many more smaller farms being taken on by larger farms and making it even more difficult for new entrants to get in and expand.

    I still cannot see this argument as making any sense at all, all they are doing is reducing their profitability on their existing acres and working them or their staff and machinery harder for little return on capital invested in the 'new' acres. Busy fools indeed.

  15. #15
    mbsrhol
    Guest

    Re: Land Rents

    Quote Originally Posted by Badshot View Post
    I still cannot see this argument as making any sense at all, all they are doing is reducing their profitability on their existing acres and working them or their staff and machinery harder for little return on capital invested in the 'new' acres. Busy fools indeed.
    +1

  16. #16
    oxonfarmer
    Guest

    Re: Land Rents

    Quote Originally Posted by NeilO View Post
    Ooooh goody, we have access to one of 'them'.

    Now it's a done deal (for considerably more than 200/ac), do you mind explaining how you would justify that tender? T'is a serious request btw.

    The tender can not be justifyed on that land, grade one in lincs maybe or spud ground

  17. #17
    static_discharge
    Guest

    Re: Land Rents

    Surely the justification is "I wanted it and I can afford it."

  18. #18
    dragonfly
    Guest

    Re: Land Rents

    Quote Originally Posted by static_discharge View Post
    Surely the justification is "I wanted it and I can afford it."
    This is VERY, VERY, TRUE!
    And with the current high prices, there are quite a lot of people ABLE to afford it.
    Some are putting the extra money in a pension or "some form of saving for a rainy day", some are spending money on new kit (even if not completely necessary!) and some are paying high rents - simply because they want more land, usually for no other reason than - Boost their ego!

  19. #19
    pig fighter
    Guest

    Re: Land Rents

    Quote Originally Posted by static_discharge View Post
    Surely the justification is "I wanted it and I can afford it."
    I don't believe it is ego at all. Simple numbers.......you may be making 100 per acre on 1000 acres and decide to expand to 2000 acres where over the combined area you would be very happy to accept just 60 per acre margin or an increase in your net margin/ money into bank of from the original 100 000 to 120 000. As for being busy fools you will find scale brings capital efficiency with the large operations running dedicated harvest and cultivation teams who are actually a lot less "busy" than the smaller business trying to juggle labour and machinery amongst all the jobs.

  20. #20
    walter melon
    Guest

    Re: Land Rents

    200/ac with sfp is not that silly because the actual rent is about 115/ac. If your growing 3.5t/ac of group 1 milling then thats 630/ac. Sell your straw for another 40.
    Inputs last year cost 180/ac leaving 375/ac. Get a contractor in on a stubble to stubble arrangement for 150/ac and your still left with 225/ac to cover your fixed costs.

  21. #21
    RmarkV
    Guest

    Re: Land Rents

    Well price is one thing, but when you find out that certain farmers are been offered better terms then you when trying to rent ground how can you ever have a fair chance of renting said ground

  22. #22
    TartanFarmer
    Guest

    Re: Land Rents

    Water Melon, I couldn't agree more that if you get 3.5t/ac and if you get the milling premium them you will make a sensible margin from a stupid rent like that. However a few things to think about - you can't grow 3.5t/ac of Wheat as an average across land like that, your inputs for rent (it's 244ish by the way) less SFP, variables and stubble to stubble give you an outlay on 400ac of approx 195k per year. Let's be realistic about budgeting for a minute an assume a sale price on wheat of 150 and a yield average of 2.75t/ac plus the straw (if you can get 40/ac around the south east then please let me have the number of the guy who is prepared to pay it) Your return for a 195k spend is 181k. Now lets drive the 30 miles to the farm to do any work, factor in a drying cost (there are no facilities on that farm I hear) and oh yes, put a rotation in that will sustain a yield average of something close to a realistic 2.75t/ac. Where has your profit, sorry, loss gone now?

  23. #23
    static_discharge
    Guest

    Re: Land Rents

    Quote Originally Posted by TartanFarmer View Post
    and stubble to stubble
    Most taking on extra land will be stretching existing machinery, which may well be rented machines anyway. So really just extra diesel and a bit of wages. And even if we said that the actual margin was 100, thats still a darned sight better than putting money in the bank, which is the basic benchmark of expansion.

    Would I buy land at 5000/ac? Probably. Would I rent some at 200/ac? Probably would too. On a 3yr "deal", and with existing kit, I know which on paper is the best/worst deal. And I also expect that this land "down south" would probably fetch well in excess of 5k.

  24. #24
    walter melon
    Guest

    Re: Land Rents

    Quote Originally Posted by TartanFarmer View Post
    Water Melon, I couldn't agree more that if you get 3.5t/ac and if you get the milling premium them you will make a sensible margin from a stupid rent like that. However a few things to think about - you can't grow 3.5t/ac of Wheat as an average across land like that, your inputs for rent (it's 244ish by the way) less SFP, variables and stubble to stubble give you an outlay on 400ac of approx 195k per year. Let's be realistic about budgeting for a minute an assume a sale price on wheat of 150 and a yield average of 2.75t/ac plus the straw (if you can get 40/ac around the south east then please let me have the number of the guy who is prepared to pay it) Your return for a 195k spend is 181k. Now lets drive the 30 miles to the farm to do any work, factor in a drying cost (there are no facilities on that farm I hear) and oh yes, put a rotation in that will sustain a yield average of something close to a realistic 2.75t/ac. Where has your profit, sorry, loss gone now?
    SFP this year will be about 85/ac. 200 - 85 is a rent of 115/ac. Your variables are high compared to mine and if I averaged 2.75t/ac I would give up that land. Yes 150/t is realistic though but we are talking about today's price.

  25. #25
    Right-arm fast
    Guest

    Re: Land Rents

    Quote Originally Posted by static_discharge View Post
    Most taking on extra land will be stretching existing machinery, which may well be rented machines anyway. So really just extra diesel and a bit of wages. And even if we said that the actual margin was 100, thats still a darned sight better than putting money in the bank, which is the basic benchmark of expansion.

    Would I buy land at 5000/ac? Probably. Would I rent some at 200/ac? Probably would too. On a 3yr "deal", and with existing kit, I know which on paper is the best/worst deal. And I also expect that this land "down south" would probably fetch well in excess of 5k.
    can you still buy bare land for 5k ? I think it might be 7k plus

  26. #26
    jibber
    Guest

    Re: Land Rents

    I didn't think you could claim the SFP unless you were farming the land? So if you are the tenant you have got to have the SFP.

  27. #27
    BasilSeal
    Guest

    Re: Land Rents

    Quote Originally Posted by jibber View Post
    I didn't think you could claim the SFP unless you were farming the land? So if you are the tenant you have got to have the SFP.
    you can claim SFP if you have entitlements and are nominally considered the farmer of the relevant area of land. The bar is set pretty low in order to be considered a farmer by the RPA, you could enter into a nominal contract farming agreement with the 'tenant', and that would be sufficient.

    The idea was that the SFP went to the active farmer, in practise, most landlords would like the rent and the SFP as well.

  28. #28
    static_discharge
    Guest

    Re: Land Rents

    Quote Originally Posted by wurzle_bob View Post
    Land close by, borders a sand quarry so shows type, been in grass for???? almost a rabbit warren........... fetched 210 per acre NO sfp!
    'Kin Bonkers!!
    Turf?

  29. #29
    oxonfarmer
    Guest

    Re: Land Rents

    Quote Originally Posted by TartanFarmer View Post
    Water Melon, I couldn't agree more that if you get 3.5t/ac and if you get the milling premium them you will make a sensible margin from a stupid rent like that. However a few things to think about - you can't grow 3.5t/ac of Wheat as an average across land like that, your inputs for rent (it's 244ish by the way) less SFP, variables and stubble to stubble give you an outlay on 400ac of approx 195k per year. Let's be realistic about budgeting for a minute an assume a sale price on wheat of 150 and a yield average of 2.75t/ac plus the straw (if you can get 40/ac around the south east then please let me have the number of the guy who is prepared to pay it) Your return for a 195k spend is 181k. Now lets drive the 30 miles to the farm to do any work, factor in a drying cost (there are no facilities on that farm I hear) and oh yes, put a rotation in that will sustain a yield average of something close to a realistic 2.75t/ac. Where has your profit, sorry, loss gone now?
    Tartan Farmer there is no way you are from scotland you are a lot more local to oxford to know all that detail!!!!!!!!!!!!!!

  30. #30
    Johndeere
    Guest

    Re: Land Rents

    I love reading about myself on here! I don't need to justify what I paid for this land (which was not 244/acre), their is a lot of bitterness about this Blenheim land but can some of you please just get over it and concentrate on your own business! If it all goes tits up then feel free to say I told you so! If I had not bid what I did then I would not of got the land, the second person was not far behind on the rent and I would not of got it and you could of all moaned about him instead! let's hope there is some nice neighbours at bladon as well because if the locals keep this up I will have to keep wearing my hard hat in my tractor to avoid the missiles launched my way.

    I will not be publicizing my figures on here because that is my business, but to be fair if I had not got the land I would of joined the current bandwagon of that bloke paid to much for it.

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