Damian. be keen to hear your thoughts on farmland ownership - in particular the ever increasing bucket of cash of pension-fund & hedge-funds. Where is ownership going, does it cease at some point, it's effect on farm asset price, rental price, etc. Do we eventually get to an English feudalistic type of arrangement...
Yeah, that's a bit of an issue but it's not new. Outside money has been invested in Ag land for a long time. Usually it dries up when we have an Ag downturn, which is happening now.
@@DamianMasonChannel Agree with all that, but to clarify my question :- Maybe different in the Mid-West, but I've heard you quote land values at about $20k p.acre Land wasn't always that price. It's an incremental increasing value asset; dare I say an inflation hedge. Pension funds amalgamating farmland as a safe store of value for their expanding funds under management. At some point, extrapolating current trends, they eclipse family farm ownership. Hence the "fiefdom" thought. Any thoughts?
@@eatingamandarin It could be an issue of "new Ag fiefdom" or it could just be marketplace reality -- it's hard to make money on Ag production doing about anything so at some point I see large capital not playing in this sandbox. Returns are better elsewhere.
@@DamianMasonChannel Yes, you're 100% correct on Return on Capital - very low in Ag. and irregular. However, the capital appreciation of land assets is another matter. Your own land has appreciated in value in your lifetime. Nothing like the S&P 500, but I'll guess it's been more than bank interest.
The Land Owner gets 4% ROI (say) on their land value as rent, plus capital appreciation. Land being a hard asset, semi-liquid and 100% secure. Going forward, who are the buyers when the children sell their family's 5000 acres of midwestern soil? Who has $100mill,,,? Other families or Managed Pension Funds?
Damian. be keen to hear your thoughts on farmland ownership - in particular the ever increasing bucket of cash of pension-fund & hedge-funds.
Where is ownership going, does it cease at some point, it's effect on farm asset price, rental price, etc.
Do we eventually get to an English feudalistic type of arrangement...
Yeah, that's a bit of an issue but it's not new. Outside money has been invested in Ag land for a long time. Usually it dries up when we have an Ag downturn, which is happening now.
@@DamianMasonChannel
Agree with all that, but to clarify my question :-
Maybe different in the Mid-West, but I've heard you quote land values at about $20k p.acre
Land wasn't always that price. It's an incremental increasing value asset; dare I say an inflation hedge.
Pension funds amalgamating farmland as a safe store of value for their expanding funds under management.
At some point, extrapolating current trends, they eclipse family farm ownership.
Hence the "fiefdom" thought.
Any thoughts?
@@eatingamandarin It could be an issue of "new Ag fiefdom" or it could just be marketplace reality -- it's hard to make money on Ag production doing about anything so at some point I see large capital not playing in this sandbox. Returns are better elsewhere.
@@DamianMasonChannel
Yes, you're 100% correct on Return on Capital - very low in Ag. and irregular.
However, the capital appreciation of land assets is another matter.
Your own land has appreciated in value in your lifetime. Nothing like the S&P 500, but I'll guess it's been more than bank interest.
The Land Owner gets 4% ROI (say) on their land value as rent, plus capital appreciation.
Land being a hard asset, semi-liquid and 100% secure.
Going forward, who are the buyers when the children sell their family's 5000 acres of midwestern soil?
Who has $100mill,,,?
Other families or Managed Pension Funds?