leasing a dairy farm

tommyc123

Hi.

If a man was thinking about leasing a fully operational dairy farm , with about 70 cows. Complete with parlour, land, slatted sheds etc.. I wonder what sort of money he'd be looking at. ??

freedominacup

tommyc123 wrote: »

Hi.

If a man was thinking about leasing a fully operational dairy farm , with about 70 cows. Complete with parlour, land, slatted sheds etc.. I wonder what sort of money he'd be looking at. ??

Think of a number and double it. Then add ten. And be prepared to be blown out of the water.

frazzledhome

freedominacup wrote: »

Think of a number and double it. Then add ten. And be prepared to be blown out of the water.

By Jeepers you've nailed it. The expectation of land owners and the lack of basic arithmetic among dairy farmers is staggering.

I've crunched this to death and turned down 3 to date. The only way this can work is sub €200/acre for top land, turn key. If you pay more get a job in McDonalds and work all the hrs you'd spend milking, I'd wager you'd be better off

Sam Kade

tommyc123 wrote: »

Hi.

If a man was thinking about leasing a fully operational dairy farm , with about 70 cows. Complete with parlour, land, slatted sheds etc.. I wonder what sort of money he'd be looking at. ??

Very little

Dawggone

frazzledhome wrote: »

By Jeepers you've nailed it. The expectation of land owners and the lack of basic arithmetic among dairy farmers is staggering.

I've crunched this to death and turned down 3 to date. The only way this can work is sub €200/acre for top land, turn key. If you pay more get a job in McDonalds and work all the hrs you'd spend milking, I'd wager you'd be better off

Buildings, roadway's, the lot?
Tillage will win on that playground.

Dawggone

Sam Kade wrote: »

Very little

You could be right on that.
However if the land is good enough for tillage then it won't be very little.

Grueller

Dawggone wrote: »

You could be right on that.
However if the land is good enough for tillage then it won't be very little.

Think he means very little money left in his own hand to look at.

tommyc123

freedominacup wrote: »

Think of a number and double it. Then add ten. And be prepared to be blown out of the water.

Thanks
I got €10k.

Sam Kade

Grueller wrote: »

Think he means very little money left in his own hand to look at.

You're on the ball that's exactly what I meant

tommyc123

Dawggone wrote: »

Buildings, roadway's, the lot?
Tillage will win on that playground.

Ya, the lot. Top class farm

Sam Kade

tommyc123 wrote: »

Ya, the lot. Top class farm

You could always ask the man that's leasing it.

tommyc123

frazzledhome wrote: »

By Jeepers you've nailed it. The expectation of land owners and the lack of basic arithmetic among dairy farmers is staggering.

I've crunched this to death and turned down 3 to date. The only way this can work is sub €200/acre for top land, turn key. If you pay more get a job in McDonalds and work all the hrs you'd spend milking, I'd wager you'd be better off

Have you actually looked into it?? What do u mean by "turned down 3"??
€200 per acre per what??

frazzledhome

tommyc123 wrote: »

Have you actually looked into it?? What do u mean by "turned down 3"??
€200 per acre per what??

Yes in very great detail
I mean I've been approached to lease 3 farms and have turned them down
Don't understand last question

I'm not saying its not for you, rather its not for me at >€200/acre/year

Bullocks

Should be an interesting thread , with a fully well setup dairy farm I'd say it might be easier to share farm or partner up with the existing owner rather than lease if both partners were agreeable.

tommyc123

frazzledhome wrote: »

>€200/acre/year

Interesting.

Ya, McDonald job sounds good!!

tommyc123

frazzledhome wrote: »

Yes in very great detail


I'm not saying its not for you, rather its not for me at >€200/acre/year

You being the farm owner, who would be receiving the €200/acre/year, correct???

darragh_haven

tommyc123 wrote: »

You being the farm owner, who would be receiving the €200/acre/year, correct???

No. Frazzled would be paying out the €200/acre to the landowner.
He's saying it's not financially viable fro him to do this as his profit for hours worked would equal flipping burgers in macdonalds.

tommyc123

darragh_haven wrote: »

No. Frazzled would be paying out the €200/acre to the landowner.
He's saying it's not financially viable fro him to do this as his profit for hours worked would equal flipping burgers in macdonalds.

Okay. I get you now, sorry.

That makes sense

Farmer Pudsey

freedominacup wrote: »

Think of a number and double it. Then add ten K. And be prepared to be blown out of the water.

Corrected that for you


Biggest issue in Ireland in any business where property is involved ( this is the same for Pubs, resturants, shops etc) those that lease to you want you to run a business work 80+ hour weeks for 5-800/week. If you are lucky enought to develop the business to a stage where it is making you more than this they will rise the rent/lease at the next review to bring you back down to the 5-800/week.

The biggesty problem is there are too may idiots willing to do this. I have seen this continiously. A pub I know that is/was leased one previous owner had to get a generator as they could not afford the ESB, present incumbent lease is for renewal had develop the business again owner wants a substancial rine in rent 30+% is my understanding.

A similar with a small cafe leasee threw it up as after developing it into a viable buisness owner demanded a 50% increase. Farming is no different most owners want SFP+DA and 100+/acre. Then they do not want to give you a lease ratrher a year to year contract

Cow Porter

frazzledhome wrote: »

Yes in very great detail
I mean I've been approached to lease 3 farms and have turned them down
Don't understand last question

I'm not saying its not for you, rather its not for me at >€200/acre/year

What milk price did you project?
All paid labour? If it was a young buck starting out perhaps the labour figure could be kept out to get the wheels going??

Brown Podzol

Anyone leasing out their farm for these inflated rents and availing of the tax concessions would want to be very careful. What happens if the business goes bust 3 or 4 years into lease. All the tax will have to be paid on the previous lease amounts.

White Clover

Brown Podzol wrote: »

Anyone leasing out their farm for these inflated rents and availing of the tax concessions would want to be very careful. What happens if the business goes bust 3 or 4 years into lease. All the tax will have to be paid on the previous lease amounts.

Why would the leaser be responsible ?

kowtow

Farmer Pudsey wrote: »

Corrected that for you


Biggest issue in Ireland in any business where property is involved

+1000

I see it every day. It is almost *always* about the property, not about the business in it. I have known asking prices (for a restaurant / hotel for example) which - with a straight face - are explained by adding the assumed value of the going concern business to the "potential" value of the property as a residential conversion. When you explain to the vendor that it cannot possibly be both - at the same time - you get nothing but a blank look.

When property was almost valueless - or realistically valued, perhaps if you choose to see it that way - successful little pubs and restaurants, shops etc. survived and sometimes thrived because they were run like a farm - all paid for and reliant only on sensible management through good and bad years. They didn't make many people rich but they fed a lot of families.

The problem comes when you inflate property prices and *then* try and run subsistence businesses in them. We see exactly the same in dairy farming today, as this thread shows. The Irish dairy model is perfectly sound, as far as it goes, which at today's land prices (or a €300+ lease which reflects them) is precisely as far as the ditch of the land you inherit / farm as a family.

tomwaterford

frazzledhome wrote: »

By Jeepers you've nailed it. The expectation of land owners and the lack of basic arithmetic among dairy farmers is staggering.

I've crunched this to death and turned down 3 to date. The only way this can work is sub €200/acre for top land, turn key. If you pay more get a job in McDonalds and work all the hrs you'd spend milking, I'd wager you'd be better off

The first bit of common sense I've seen posted in a long time

tommyc123

Anyone out there know anyone who's doin it?

Timmaay

My next door neighbour. Mustn't be doing too bad a job of it, won the farmer of the year afew weeks back! He started with nothing, and now owns 90cows, all the followers, whatever machinery, and the farms income supports his family with 3 kids. Recently resigned the lease, 12years this time.

tommyc123

Timmaay wrote: »

My next door neighbour. Mustn't be doing too bad a job of it, won the farmer of the year afew weeks back! He started with nothing, and now owns 90cows, all the followers, whatever machinery, and the farms income supports his family with 3 kids. Recently resigned the lease, 12years this time.

Fair play to him. That's encouraging so. And is he leasing a complete operational farm of someone else, ya?

freedominacup

frazzledhome wrote: »

By Jeepers you've nailed it. The expectation of land owners and the lack of basic arithmetic among dairy farmers is staggering.

I've crunched this to death and turned down 3 to date. The only way this can work is sub €200/acre for top land, turn key. If you pay more get a job in McDonalds and work all the hrs you'd spend milking, I'd wager you'd be better off

What would a block which joined two of your own blocks be worth. Where it increased the size of your holding by thirty percent and your grazing block for cows by 80? You have water at both ends of it and it only required around 400m of roadway to get you started. No extra labour required to run it.

Farmer Pudsey

freedominacup wrote: »

What would a block which joined two of your own blocks be worth. Where it increased the size of your holding by thirty percent and your grazing block for cows by 80? You have water at both ends of it and it only required around 400m of roadway to get you started. No extra labour required to run it.

But it is only worth extra to you it is unlikly that it will be joining two blocks belong to another dairy farmer. While it may be sensible to pay a little extra it not advisble to go way over the top. Too may lads get caught up in what it is worth to them while not looking at what it market value is wheather at sale or renting time.

kerryjack

A lad down our way started off as a farm labourer/ manager on a decent size dairy farm owner married an accountant and went all high and mighty and went in to property game labourer started buying a few cows and startes renting bits of land the lad was a slave milking 2 herds of cows 6 miles apart farm owner goes bust banks take over labourer buys farm of the bank

Sam Kade

kerryjack wrote: »

A lad down our way started off as a farm labourer/ manager on a decent size dairy farm owner married an accountant and went all high and mighty and went in to property game labourer started buying a few cows and startes renting bits of land the lad was a slave milking 2 herds of cows 6 miles apart farm owner goes bust banks take over labourer buys farm of the bank

labourer turns into an old man before his time, I've witnessed it down through the years men that work like slaves when they are young end up crippled in their 60's.

Deepsouthwest

freedominacup wrote: »

What would a block which joined two of your own blocks be worth. Where it increased the size of your holding by thirty percent and your grazing block for cows by 80? You have water at both ends of it and it only required around 400m of roadway to get you started. No extra labour required to run it.

It's worth a fortune to u, but everyone else knows that as well. Could turn into a real game of poker.

tommyc123

With the way milking is gone now id say there will be a lot of the smaller farmers (40 cows) looking for some solution if they don't want to borrow big for expansion. Leasing the whole lot out may be way to go for them

Timmaay

Deepsouthwest wrote: »

It's worth a fortune to u, but everyone else knows that as well. Could turn into a real game of poker.

Is it actually? Anything above 7k/acre and in my view all your doing is either praying land prices will inflate, or simply buying it for the next generation. Taking frazzs figure of 200/acre for long term leasing, 7k/acre is a minimum of 50years worth of leasing, before you even consider tax on the capital etc. If your paying 15k+ then all your doing is thinking with your heart instead of your head.

freedominacup

Timmaay wrote: »

Is it actually? Anything above 7k/acre and in my view all your doing is either praying land prices will inflate, or simply buying it for the next generation. Taking frazzs figure of 200/acre for long term leasing, 7k/acre is a minimum of 50years worth of leasing, before you even consider tax on the capital etc. If your paying 15k+ then all your doing is thinking with your heart instead of your head.

It's a lease I'm talking about. Does frazzes 200 change much?

Deepsouthwest

freedominacup wrote: »

It's a lease I'm talking about. Does frazzes 200 change much?

Like I said in a recent post to somebody in a similar situation, can u afford not to take it?

keep going

Deepsouthwest wrote: »

Like I said in a recent post to somebody in a similar situation, can u afford not to take it?

I think that might have been me, did a deal last week, id like to pay less but still happy enough with it, similar to freedom it joins up my places and hax a good water supply which I need and changes the ratio of landacross a road from 50 50 to 70 30 which helps with labour