Future in Farming

mantua

I'm currently farming with an uncle of mine in which we farm around 40 acres of average to poor land and have 22 sucklers! my uncle lives on his own and i tried to help out as much as possible and he has mentioned to me before that the farm and house is to be giving to me in his will! I also have another uncle about 5 mile over the road who farms a fairly big farm of 115 acres of good to average land and 55-60 sucklers and has two daughters that don't want anything to do with the farm! for the past year or so i've being thinking towards the future when he retires from farming what will happen to the farm! my plan was to maybe rent it off him for a few years to see how i would get on with running a large farm and if start to make a good return i would consider trying to buy it because his daughters would only sell it if they got the chance and deep down I know he would like to keep the land in our name and have someone of the family running it!! Any opinions on a price of an 115 acre farm with slatted accomation in roscommon!! 40 acres of it would be good meadow and the rest can be rough enough in places but better than most around!!
Thanks for reading!!

towzer2010

Hi mantua

The farming indo says the average price for Connacht and Donegal was €7,036/ac in 2010 so depending on where you are in Roscommon that could be a good bit more. That would make it over the €800000 mark so you'd want to be doing very well to make enough to pay it back. As well as that could the girls decide to put it on the open market? That could make it even more expencive if some local farmers wanted it and it was offered in lots. Then you'd still have to talk to the bank and good luck with that.

I'd say if you could get it leased for a five year term to see what happens you'd be better off.

irishh_bob

mantua wrote: »

I'm currently farming with an uncle of mine in which we farm around 40 acres of average to poor land and have 22 sucklers! my uncle lives on his own and i tried to help out as much as possible and he has mentioned to me before that the farm and house is to be giving to me in his will! I also have another uncle about 5 mile over the road who farms a fairly big farm of 115 acres of good to average land and 55-60 sucklers and has two daughters that don't want anything to do with the farm! for the past year or so i've being thinking towards the future when he retires from farming what will happen to the farm! my plan was to maybe rent it off him for a few years to see how i would get on with running a large farm and if start to make a good return i would consider trying to buy it because his daughters would only sell it if they got the chance and deep down I know he would like to keep the land in our name and have someone of the family running it!! Any opinions on a price of an 115 acre farm with slatted accomation in roscommon!! 40 acres of it would be good meadow and the rest can be rough enough in places but better than most around!!
Thanks for reading!!

115 acres is not a large farm , its a medium sized holding , i imagine a farm of that size with slatted accomodation is worth around 6 - 8 k per acre depending on how much local demand thier is for it , imo , the farmers journal tends to focus on the higher priced farms in its reports

TUBBY

even Earleys in Roscommon are saying it is tough to get 7K an acre especially for anything over 20 acres.

It depends a lot where it is I suppose (and if there would be anyone else interested) but if only 40 acres of it is good meadow land and the rest is middling, I would say 5K an acre would be a good starting point. Depends how much reclaimation you would have to do and if there is water, well fenced etc.

Also, think of how much it is worth to you. How long will you be suckling to get back any portion of the price. People were paying way over the odds for too long for very bad returns.

Dont forget to factor in Stamp Duty too and solicitors fees.

mantua

TUBBY wrote: »

even Earleys in Roscommon are saying it is tough to get 7K an acre especially for anything over 20 acres.

It depends a lot where it is I suppose (and if there would be anyone else interested) but if only 40 acres of it is good meadow land and the rest is middling, I would say 5K an acre would be a good starting point. Depends how much reclaimation you would have to do and if there is water, well fenced etc.

Also, think of how much it is worth to you. How long will you be suckling to get back any portion of the price. People were paying way over the odds for too long for very bad returns.

Dont forget to factor in Stamp Duty too and solicitors fees.

The land is all well drained and fenced and 5k an acre wouldnt be a bad price! i'm sure i would get it cheaper aswell as im a nephew;)!! Once heard a man say that the only way you'll make anything in farming is going big but the way you go about becoming a bigger farmer is the key to making it!!
Thanks for your reply!

Dazzler88

towzer2010 wrote: »

That would make it over the €800000 mark so you'd want to be doing very well to make enough to pay it back.

this is what is wrong with farming.land is way overpriced and no young people can get involved.Theres not a bank in the country that would give you a loan of this size,unless you were on a TD's wage.

tommylimerick

there are economics of scale advantages in almost every business
i don t know all that much about suckler farming or economics for that matter
if you pay 5k a acre don t you have to pay interest and beat inflation at the same time?
you borrow money from a bank and when you are paying back the money you mainly pay back interest first and principal later
are there some tax advantages to this in the first couple of years?
will you have to pay a higher % of income to reduce outstanding principal?
if land is trading at 5k a acre in 10 years have you lost interest + inflation?

reilig

I think you're way under valueing it Mantua. If the land is left to the girls or sold on their behalf, they will want the full value of it. Are you that close to your uncle or cousins that you could get the land at €200k less than its value??? In my experience, it would be different if your uncle had no children and you were working on his farm. Land values will depend on what type the land is. If its rushy and wet north Roscommon land, you could expect to get it for €7k an acre but land anywhere from Elphin in the North to Ballinasloe or Athlone in the South is of very high quality and could command up to €10k per acre depending on the location, amount of sheds and facilities and land quality. Don't bank on getting it on the cheap - you will most likely end up being disappointed.

Muckit

One thing is for sure, you'd want to be a fortune teller at times to predict the price land will make.

As always there's so many factors that decide land price. On top of these in these financially uncertain times I think land value is now more than ever dependent on the amount banks are willing to lend to individuals.

Unless you've a big lump sum of cash under a mattress somewhere. Which some lads probably have on the back of all the motorways that were built:rolleyes:

irishh_bob

Muckit wrote: »

One thing is for sure, you'd want to be a fortune teller at times to predict the price land will make.

As always there's so many factors that decide land price. On top of these in these financially uncertain times I think land value is now more than ever dependent on the amount banks are willing to lend to individuals.

Unless you've a big lump sum of cash under a mattress somewhere. Which some lads probably have on the back of all the motorways that were built:rolleyes:

what determines the price of land more than anything ( apart from interest rates ) is local interest , if a dogfight develops between two neighbours over a farm in cavan or monaghan , it can beat the price of a ranch style farm in meath which no one local is interested in

Muckit

irishh_bob wrote: »

what determines the price of land more than anything ( apart from interest rates ) is local interest , if a dogfight develops between two neighbours over a farm in cavan or monaghan , it can beat the price of a ranch style farm in meath which no one local is interested in

You can't buy without money though

poor farmer

you had better pray that one of your your uncles knockout daughters doesn't fall in love with some land hungry farmer

mantua

reilig wrote: »

I think you're way under valueing it Mantua. If the land is left to the girls or sold on their behalf, they will want the full value of it. Are you that close to your uncle or cousins that you could get the land at €200k less than its value??? In my experience, it would be different if your uncle had no children and you were working on his farm. Land values will depend on what type the land is. If its rushy and wet north Roscommon land, you could expect to get it for €7k an acre but land anywhere from Elphin in the North to Ballinasloe or Athlone in the South is of very high quality and could command up to €10k per acre depending on the location, amount of sheds and facilities and land quality. Don't bank on getting it on the cheap - you will most likely end up being disappointed.

Ya i suppose your right in what your saying! the land is rushy in most but about 40 acres of good meadow! 4 bay double and 4 bay single nd fairly good handling facilties!! I'd be fairly close to him because i'm always helping him!! and close to my cousins aswell!! I suppose no point talking about it now because its still a few years down the road!!
Thanks for all yer replys:)