Wealthy investors are turning to a new kind
of diversification: ranches and farms.
Posted on 10/20/2004 7:17:22 AM PDT by OESY
...Bank of America Corp. and J.P. Morgan Chase & Co. are among the major players pitching working farms and ranches as an alternative investment. The idea is to buy the land and then let a private bank or trust company manage the cattle, corn, soybeans and almond orchards.
Bank of America says its private bank unit now manages more than two million acres of ranch and farmland....
JPMorgan Private Client Services says it now manages about two million acres of land. A handful of trust companies and other banks, such as Wachovia Corp., also manage ranches and farms for high-net-worth clients.
This isn't hobby farming. These are investments just like any other real estate, but instead of profiting from apartment rentals and store leases, farm and ranch investors are reaping what is sown in the field.
In many of these cases, the farmer who sold the land stays on to run the daily operations, reporting to the bank or trust company. The farmer then either shares a part of the crop's proceeds with the investor or leases the land back from the investor. Crop sharing offers greater reward, but with greater risk. If pests or severe weather hits a crop -- such as the four hurricanes that slammed Florida's citrus industry this year -- the harvest and the profits shrivel. A bumper crop, however, can provide big windfalls. With a lease, an investor simply pockets a set payment, while the risk and reward stays with the farmer.
Interest from investors has been mainly focused on cropland in the Midwest, where corn and soybean farms dominate. Cattle ranches in Texas are also popular, as are permanent plantings in California, like almond, walnut and fruit orchards.
This interest in ranch and farmland mirrors the broader interest in real-estate investing....
(Excerpt) Read more at online.wsj.com ...
Wealthy investors are turning to a new kind
of diversification: ranches and farms.
If I was a billionaire... I'd probably build a castle out in the middle of nowhere, then lease all the land around it to the big farm managers. =) Just imagine that scene.... ;-)
Knowing how things just don't always go my way, I'd probably get a pig farm upwind from the castle.
They get great tax breaks, and land always goes up in value.
When you see money that normally would go into new businesses and new R&D instead flowing into land, then you know that the American dream is beginning to die.
What on earth is newsworthy about this? This is the way we have run our family farm for more than 60 years.
...used to be call sharecropping?!?!?
http://greystonecastle.com/
It used to be call Elk Mountain Castle.
lol, actually I was thinking of something with more defensive value. =) Tall walls, towers, a big gate... a moat. Large enough to hold a small town... on a hill.
What's the use of a castle if it can't be used to fend off an attack of angry liberals?
Nothing new here, this was done in the 1970's.
Well...it does sit on top of a hill and has 4000 ac. As Interstate 20 works its way around the lower elevations, you can see it 3 miles away from the west and one mile from the east.
Maybe you just need some firearms that shoot farther or practice your long-range skills with what you got.
Umm . . . it still is.
This concept of absentee landlordship has reared it's ugly face many times throughout history, usually with dismal and disastrous consequences for society.
The Age of George III: Land-holding in Ireland 1760-1880
The property of this country is absolutely concentred in a very few hands, having revenues of from half a million of guineas a year downwards. These employ the flower of the country as servants, some of them having as many as 200 domestics, not laboring. They employ also a great number of manufacturers and tradesmen, and lastly the class of laboring husbandmen. But after all there comes the most numerous of all classes, that is, the poor who cannot find work. I asked myself what could be the reason so many should be permitted to beg who are willing to work, in a country where there is a very considerable proportion of uncultivated lands? These lands are undisturbed only for the sake of game. It should seem then that it must be because of the enormous wealth of the proprietors which places them above attention to the increase of their revenues by permitting these lands to be labored. I am conscious that an equal division of property is impracticable, but the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree, is a politic measure and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise. Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labor and live on. If for the encouragement of industry we allow it to be appropriated, we must take care that other employment be provided to those excluded from the appropriation. If we do not, the fundamental right to labor the earth returns to the unemployed. It is too soon yet in our country to say that every man who cannot find employment, but who can find uncultivated land, shall be at liberty to cultivate it, paying a moderate rent. But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state.
-- Thomas Jefferson to James Madison, Oct. 28, 1785 -- PROPERTY AND NATURAL RIGHT
The facts on farming: In 1976 I bought corn for $2.25 a bushel, Today corn is $1.68 a bushel. A new tractor was 15,000, Same tractor today= $100,000. Do the math
BTTT!!!!!!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.