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Idea share: Short term profit

 
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Just a small game to maybe give each other some good ideas.

You can borrow money, but in four or five years, you've got to somehow turn a profit. What do you do with the land?
 
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I don't know a single way to get that much money from land without totally wrecking it.
 
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Assuming the land is fenced, in a desirable climate for all year production, and well graded:

1. Maximum benefit is usually achieved by being a developer, getting Council approval for construction, and building or on-selling the proposal - minimal initial outlay for potentially a huge profit. (This is not necessarily anti-Permie)

2. Buy inexpensive weaned calves and fatten them up for sale. (With the drought here, a lot of Farmers are destocking, and it's Spring)

3. Plant the three sisters: corn, beans and pumpkins, and other crops on a rotational basis - organic crops to maximise space and market potential.

4. Preferred option: Fence off a percentage and do both (2) and (3) above - organic meat and veg.
 
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Market gardening, chickens, eggs, dairy...

Getting orphaned lambs and calves (or excess dairy calves) for free and raising them on goats milk.

Renting out plots to tinyhouses and campers.

Avoiding debt and unnecessary spending. Living somewhere on the land rather than paying for housing elsewhere.
 
pollinator
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Maja Gustavsson wrote:Just a small game to maybe give each other some good ideas.

You can borrow money, and buy land with it. But in four or five years, you've got to somehow turn a profit. What do you do with the land?



The profit includes paying off the land? I can only talk about where I live but the normal price of land here (all prices converted to USD) is $14000 per hectare, agricultural land is rarely sold in less but lets say you did manage to find an acre up for sale and you already owned a farm so you could buy it. that's $7000 plus the land registary fee so $7500 I'm going to do everything over 5 years to make the maths easy for myself.

Land $7500
$150 per year land tax = $750
Subsidies available $220 per year =$1100

Money needed to be earnt before tax (Sales tax at 25%) in order to turn a profit on year 5 = (7500+750-1100)*1.25 = $8937 or $1787 per year

Solution..
Year 1 buy 2000 strawberry plants and mulch to put them in, price $1470 harvest on the first year 600 punnets equaling $2200 income. ($700 profit)
Year 2 do the same but harvest will now be 1500 earning $5500 and earning (3910 profit)
Year 3 take runners from your plants and replant 2000 these will not produce this year, production from year one and two plants now at 1700 punnets profit $6030
Year 4 again replant runners. production from the 1st year plants in their last year year 2's and the first set of runners should be up around 2000 punnets turning a pretax profit of $7000 per year from here on out.
Year 5 pull up oldest year plants plant new runners...

I'm on year two of this system, I cannot go as high as these numbers as I only sell from my front gate and there is a limit to how many people want to buy strawberries! but I do half these quantities which would still be enough in the hypothetical question asked, the price of mulch and containers is included in the numbers, but not water as I don't need to water my strawberries. This system will take up a maximum of half an acre. There are NO labour costs put in in this calculation, 6000 strawberry plants is possible for one person to do but it will take a full time person to harvest that many plants.







 
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For the most part, I try to be positive, and be very encouraging, but when it comes to questions like this, I also have to remind people that large landownership is very complicated.

The biggest thing is, there are many large landowners, and we all have the same problem: how to make money with what we have. That creates the biggest problem because competition is fierce. I know for those with limited acreage it is easy to fall into the mindset of: if I had one hundred acres, I would..."

Raise sheep
Raise small grains
Raise pigs

Etc

but it is never that easy. When you actually pencil out those thoughts in a fiscal way, reality really hits home.

I own hundreds of acres of land, and want to convert to a new type of farm, but what? At first glance, hops seems to be great since the micro-brews cannot get enough of them here, but hops costs $6000 an acre to start, and it requires an expensive harvester. And it is not enough to grow hops, it means harvesting them at just the right time too. This is a problem since I do not have the hundreds of thousands of dollars to do get into growing hops, and either do most landowners. And few lending institutions will loan money for a start up operation, especially for one doing something new for the area; the risk is enormous. So that is why there is such a shortage of hops in Maine. And that is just one such example, insert really any idea here.

And then there is the issue of what the land can profitably raise. Just because a person might want to raise a particular crop, does not mean the land they buy can support that without going into serious debt to make the land really what it is not. For instance, I have grown lemon trees in Maine, but I could never grow enough lemons to support a Maine based lemonade company. Growing in scale really presents a problem, from soil amendments, to harvesting in scale in a timely fashion, to storage issues, and even to marketability.

The other caution is, be wary of what people do not say. Like I can state with truth that I can get $100 profit per lamb sold, and my land here can support 10 lamb per acre, so theoretically I can make $100,000 with 100 acres. Well it is not that easy because I have to have barn space, winter feed, equipment, and handling equipment to manage 1000 sheep. So it is what I am not saying, that really changes things. In agriculture, this is called INFRASTRUCTURE and that is what makes or breaks a farm. It has to be in place.
 
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