The Farmers Club

The “Club Notes” for Monday, the 27th of May, 2024.

By Dwain Duxson

Distinct advantage

If you and I wanted to buy a Farm or block of Land, we would likely have to borrow most of the money to do so. This means that our capability to make a profit would be restricted by interest and principal payments. We all understand that. Recently, in our Farm Tender Daily, we wrote about how there is a big wave of money coming from Corporate and Institutional investors into Aussie Farm Land. Read the story here. I have had many replies on this subject, some you will see below, but the overwhelming response is that they are not good for our industry. So, where we compare them is in line with our opening couple of sentences above. We have to go into debt to grow whereas the Corporate, they have no debt and usually an endless supply of funds to operate with. This is a distinct advantage they have. So, no wonder they can pay overs for Land, and no wonder they can renovate what they call distressed assets. That’s the easy bit for them, but some have argued that when it comes to the production side, they struggle. But at the end of the day, the money is made from capital gain, and that can mean they have a distorted view of what Farming is all about. They probably have their place, but you, the Farmer, think they are doing more harm than good. Do you have a view on this?  Reply to [email protected]

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