Paying it off

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By Dwain Duxson dwaind@farmtender.com.au

Paying it off - In this newsletter yesterday, we talked about how in the 50's when economic conditions for Farmer's were blissful and how many in the Eastern part of the Riverina paid for Land they bought in 1 year on the back of inflated Wool and Clover Seed prices. We have heard many a story over the years of a Farmer that got lucky or, through good management, paid for the Land they bought in the first production year. 

We also spoke a couple of weeks ago about how the Farmers in the Yarrawonga Mulwala area started buying cheap Land in Central NSW, and some of them paid for it in 1 or 2 years.

It got me thinking. Are the days of buying Land and paying for it through production in a short period of time long gone? The logical answer is yes. I'd go so far as to say that some, within a generation, won't ever pay for the Land they bought. And that's not to say that Farmer's won't be in a stronger position equity-wise. The last couple of years has transformed the equity stakes to a level never seen before in Agriculture. It's now an equity game, more so than ever. 

Production systems that rely on commodity price-taking models (which are most) and the imbalance between Land price rises mean those heady days of paying Land off in a short period of time are now a pipe dream. But young guys with ambitions for Land ownership must not lose faith. The glass-half-full, clever ones with plenty of get-up-and-go will always find a way. I read the other day that 50 percent of the Land in the US will change hands in the next 10 years (purchase or generational). If it's similar here, therein lies the opportunity.

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