Farmland with trees purchase question - brace yourself!

[ivinsfan]

No activity since a few minutes after the initial post. Probably brainstorming his next big idea.

Or perhaps buying the farm

 

[copyright1997reloaded]

Yes but the softwood lobby convinced Congress (remember when Congress had to approve all tariffs) that they were being hurt by the low prices. The result is higher profits for the industry and a windfall profit for the government. It is good to see how the model worked out because we have no idea how the extensive tariffs proposed now will work out.

A tariff increases the price to the consumer. The net effect is a decrease in demand as it causes a leftward shift in the demand curve. The money from the tariff goes to the country imposing the tariff (in this case the USA). So how does that result in higher profits for the industry (in this case the Canadian timber producers)?

 

[HFWR]

Or perhaps buying the farm

Hopefully literally, and not figuratively...

 

[Texas Proud]

A tariff increases the price to the consumer. The net effect is a decrease in demand as it causes a leftward shift in the demand curve. The money from the tariff goes to the country imposing the tariff (in this case the USA). So how does that result in higher profits for the industry (in this case the Canadian timber producers)?

This is the theory vs practice argument... yes, in theory it does increase the price... but the company does not have to pass that cost along to the consumer...


I saw an interview of the CEO of Harley Davidson who said they were not increasing prices in Europe on the tariffs that they started to charge, but will eat that cost for awhile... they are going to open a factory there to fix the problem...


But, you are right that it does not put money in the Canadian timber industry...

 

[Car-Guy]

If the OP wants to replace trees harvested seedlings can be purchased from a tree farm. If he wants to remove stumps drill holes in the stump top and apply potassium nitrate. Potassium nitrate excellarates the rotting process.

I've actually tried potassium nitrate on a hardwood stump once before, but after a full year, it didn't seem to be doing much of anything. It's been at least 5 years and it's still there although it's stating to go now. At one point, it did occur to me to mix it with the right proportions of charcoal and sulfur and try to blast the thing out, but then I thought again and decided that might not be such a good idea.

 

[kcowan]

A tariff increases the price to the consumer. The net effect is a decrease in demand as it causes a leftward shift in the demand curve. The money from the tariff goes to the country imposing the tariff (in this case the USA). So how does that result in higher profits for the industry (in this case the Canadian timber producers)?

Not Canada. It gives the US tree farmers an umbrella price for them to increase their prices. US government gets the tariffs and the famers are happy. The taxes which are illegal according to several WTC rulings will be returned to Canada but the US tree farmers keep their windfall profits. Rinse and repeat.

I have a buddy who is a lumber broker here so I get all the inside scope.

 

[gstillson]

Not Canada. It gives the US tree farmers an umbrella price for them to increase their prices. US government gets the tariffs and the famers are happy. The taxes which are illegal according to several WTC rulings will be returned to Canada but the US tree farmers keep their windfall profits. Rinse and repeat.

I have a buddy who is a lumber broker here so I get all the inside scope.

There are no windfall profits in trees. 25 to 30 years to get $1000 to $2000 an acre?

 

[COcheesehead]

I've walked logged land. Its a mess. The stumps all remain. Any small trees not desired remain. The land is very uneven. All the broken/cut branches are on the ground. It looks like a battlefield. Could not even imagine how you would turn it into developable plots.

 

[johnhkc]

OP did we scare you off? I do think we pretty much have answered your question

No, I'm not scared. Sometimes when reading the news, I want to get the hell away from all the screwballs. This looked like a great way to do it. But I don't think the numbers will work for me.


I was hoping I could buy the land by selling my house in KC and selling the trees. Then I'd have income from the farm lease which would easily pay all core expenses (~$700/mo). Right now, all investments are stocks, bonds, ETFs, mutuals. I thought maybe this would be a nice downturn hedge.


Obviously, someone needs to invent a tree-sucking, wood-slicing, trump-ripping robot that will make this all possible for me. And at a profitable price point.

 

[ivinsfan]

No, I'm not scared. Sometimes when reading the news, I want to get the hell away from all the screwballs. This looked like a great way to do it. But I don't think the numbers will work for me.


I was hoping I could buy the land by selling my house in KC and selling the trees. Then I'd have income from the farm lease which would easily pay all core expenses (~$700/mo). Right now, all investments are stocks, bonds, ETFs, mutuals. I thought maybe this would be a nice downturn hedge.


Obviously, someone needs to invent a tree-sucking, wood-slicing, trump-ripping robot that will make this all possible for me. And at a profitable price point.

So if you can invent that you will be good for life

 

[happy2bretired]

Or you can create an art park and charge admission. [emoji23]

 

[PoorOldCountryBoy]

I have a question for y'all about buying land with trees.

I found some property in central Missouri. The property has a house of approx 1600 sqft on about 150 acres of land. The land is mostly covered in trees, maybe 130 acres.

I'm thinking I could buy the land for $400K, sell my house for $180K (100% equity), sell the trees for $260K then lease out the resulting cleared land for $20K/yr ($180 per acre per year). I net $40K plus $20K/yr and my cost of living is lower.

I am assuming (perhaps incorrectly) that trees would be worth $2000 per acre and that tree buyers would clear everything including the stumps. I'm also assuming that I don't have to "do anything" to make the cleared land suitable to lease for growing crops.

I know nothing about trees or farming. I'm a tech guy.

Does all of this seem plausible or is this one of those hare-brained ideas that only makes sense while sitting in an Aeron chair on the internet in an air-conditioned room while surfing the net with too many tabs open?

After you stop laughing, please tell me where my assumptions are incorrect.
Thank you.

Sorry to rain on your parade, but it will cost you $2000-3000/acre to clear heavily forested land. If the lumber is nice you may get it for free but then you'll likely be giving it away.

If you do go through with this you may want to do 5-10 acres at a time and see how your contractors are treating you. There are a lot of sharks out there and you're the chum in the water. Likely there is a good spot that is worth a forester's time and they'll give you a good deal. They won't want to clear the yucky areas for free.

Bottom line, you need a bulldozer for those stumps. A big one.

 

[Redbugdave]

Bottom line, you need a bulldozer for those stumps. A big one.

Track hoe and dozer.

 

[FinancialDave]

Some words for the wise when it concerns investing:

Never invest more than you can stand to lose in any single investment!

Never invest in things you don't understand!

I think both of the above will give you the correct clue as to what you need to do.