Selling land

While it may seem counter-intuitive, selling land can be an option to manage financial risks and grow the farm.  Land is an investment.  While it is critical to the farm, it must also be benchmarked versus other investments.  Land also locks up a lot of capital, capital that could be used to build on-farm refrigeration, purchase a harvester or invest in a processing facility. 

Being “mortgage poor” is an expression that is often used to describe homeowners who are paying so much in monthly house payments that they can’t afford do furnish or enjoy the house.  The same scenarios can be true for farmers, with most of the capital and off farm income going to cover the mortgage, little money is available for farm operations whether it be necessary equipment or working capital to make it through the months between planting and harvest.

A decision to buy, sell or hold land could also be influenced by time committment (maintenance like fence repairs or mowing), business directions (focussing more on processing) and conscious land stewardship decisions. 

While the purchase and ownership of farmland is laden with romance and emotion, decisions require thorough analysis and assessment of alternatives.  Determining “how much” you require is a critical management decision.  Making informed decisions is critical to maintaining control.

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