Tag Archives: falls
Farmland For Sale Falls By A Massive 67% – As Prices Rise
By Exeter Express and Echo | Posted: October 25, 2013 The value of farmland in the South West continues to rise, as the amount coming onto the market goes on falling. In the first nine months of this year the price of prime land in the region rose by 2% to £7,600 an acre – according to data collected for the farmland value survey run by estate agents Savills. Penny Dart, of Savills’ Exeter office, explained: “Across the South West during the first three-quarters of 2013 the volume of farmland publicly marketed decreased by 4% when compared to the same period in 2012. “The South West accounted for 18% of all farmland marketed in England. In the region 15,081 acres of farmland was publicly marketed, compared with 15,745 acres to the end of September in 2012, a decrease of 4%.” Mrs Dart said Somerset recorded the steepest fall in the amount of farmland coming onto the market, a massive 67% down on the year to just 1,492 acres. Devon also recorded a significant drop of 30%, while in Cornwall the drop was just 4%. It was a different picture elsewhere in the South West region, with Gloucestershire almost doubling the amount of land marketed, with an enormous increase of 84% in Dorset and 37% in Wiltshire. But Devon still accounted for nearly a fifth of all the farmland marketed in the region. Wiltshire, with its extensive grain-growing acreage, accounted for nearly a third. Mrs Dart explained that an analysis of the farm transactions carried out by Savills throughout Great Britain in the first half of this year showed that farmer buyers made up half of all purchasers. This was similar to the situation in 2012. “Farm expansion continued to be the prime motive for buying, and was cited by the majority of farmer buyers,” she said. But the proportion of lifestyle buyers rose very considerably, to 40%, the highest level since 2004. She said their primary motive was not income generation from farming. “Of these buyers there was an almost equal split between those who already owned farmland and those who were purchasing for the first time. “Buying for residential or sporting reasons was also a significant motive.” While the average value of prime land was now £7,600, third-grade arable land now averaged £6,150 an acre. The average value of prime dairy land had risen by nearly 2% to £6,690, while third-grade dairy land was £5,760. Poor livestock grazing was £4,600 an acre. Read more: http://www.exeterexpressandecho.co.uk/Farmland-sale-falls-massive-67-8211-prices-rise/story-19984687-detail/story.html#ixzz2ikAHWF7F Continue reading
If A Tree Falls In The Forest, Can You Make A Little Money?
By John Wasik CHICAGO | Mon Jun 3, 2013 4:42pm EDT (Reuters) – If a tree falls in the forest, can you make a little money? As the U.S. housing rebound continues, you can watch the value of your real estate rise. In addition you can reap gains from resource companies that own and process timber. Since most U.S. homes are still framed with wood, timber becomes a more valuable commodity as new construction booms. Home prices gained the most in seven years in March, according to a recent S&P Case-Shiller housing index report. Housing starts in April rose 16 percent over the previous month with new building permits up 14 percent, according to the U.S. Census Bureau. North American sawmills are running at the fastest pace in six years, up nearly 7 percent over last year, according to CIBC World Markets , a Canada-based investment bank. Growth in China is also contributing to the rebound. More than 60 percent of log exports from the Pacific Northwest head to the People’s Republic. Timber is also becoming more scarce as forests shrink. As a commodity, it provides an inflation hedge, too; the S&P Global Timber & Forestry index has produced an annualized return of nearly 7 percent over the past three years through April 30. The current Consumer Price Index is running at an average 1 percent. Why invest in timber and related resource companies instead of the obvious play in homebuilder stocks ? Those companies have been rallying for more than a year and are pricey. The SPDR S&P Homebuilders ETF, for example, a fund that holds most of the major home-construction companies, is up more than 50 percent over the past year through Friday, almost double the price of a consumer cyclical index. That portfolio’s price- earnings ratio – what investors are willing to pay for a dollar of expected earnings – is 20, compared to 14.4, for the SP 500. The underlying S&P index for the timber sector has climbed more than 31 percent over the past year through May 31 compared to a nearly 50-percent gain for the S&P Homebuilders Index. The iShares Global Timber and Forestry Index ETF (WOOD), has p/e of 18; that’s not a bargain price either, but timber stocks are a better value now relative to homebuilding stocks and may have more upside. REGIONAL VIEW Most timber companies specialize in specific regions where they own or lease properties. But to obtain global diversification, it’s best to consider one of two exchange-traded funds on the market that hold timber, packaging and real estate investment trusts (REITs) that own lumber resources. The Guggenheim Timber ETF, holds major producers like Weyerhaeuser Co and International Paper Co. It tracks the Beacon Global Timber Index, which holds companies that own or lease forested land or produce wood-based products. More than 40 percent of the companies are based in greater Europe or Asia. It’s up 8 percent year to date through May 31 and gained 25 percent last year. As an alternative, the iShares timber ETF mentioned above has more than 60 percent of its holdings in the Americas, including Plum Creek Timber Company Inc and Potlatch Corp . The iShares fund is a better deal on expenses than the Guggenheim product, charging 0.48 percent annually for management, compared to 0.70 percent for the Guggenheim fund. It’s gained 4 percent year to date and 23 percent last year. Of the two ETFs, the iShares fund offers more total international exposure, including 13 percent stakes in Brazilian companies and 11 percent in Japan , says Eric Dutram, ETF analyst at Zacks Investment Research in Chicago. Either way, the two funds are reasonably priced, he said. Many timber companies give you a bonus if they’re vertically integrated. They could mean they are producing value-added products like rayon, packaging or paper, which also would benefit from a broad economic recovery. These companies may also own or lease land that may result in other mineral plays such as petroleum or natural gas . Keep in mind that timber trends can cut the other way. As funds specializing in a handful of commodities that rise and fall directly with economic demand, these ETFs are not for nervous investors. Guggenenheim Timber lost nearly half its value in 2008 and has a 32-percent five-year standard deviation, a volatility gauge. That compares to 20 percent for a world natural resources stock index. If the housing market goes south again, then these ETFs will suffer. Consider them only as small parts of a larger portfolio and not large holdings. (The author is a Reuters columnist and the opinions expressed are his own. For more from John Wasik see link.reuters.com/syk97s ) (Follow us @ReutersMoney or here Editing by Linda Stern and Andrew Hay) Continue reading
Farmland Boom Carries Threat Of Collapse
New York Times If the price of corn falls — and many forecasters predict it will, particularly if the ethanol boom wanes — the price of U.S. farmland will fall with it. Across the American heartland, farmland prices are soaring. In places like Waco, Neb., and Chickasaw County, Iowa, where the boom-and-bust cycle of farming reaches deep into the psyche, some families are selling the land that they have worked for generations, to cash in while they can. Behind the rush is the age-old driver of farm booms: high crop prices. Corn, in particular, has been soaring, reflecting demand overseas and, domestically, for ethanol. High prices mean good profits for farmers, and many are using their growing incomes to bid for land. Sensing opportunity, investment firms are buying, too. But if the price of corn falls — and many forecasters predict it will, particularly if the ethanol boom wanes — the price of farmland will fall with it. While many farmers have borrowed little money or used cash to finance their purchases, those who have overexpanded could run into trouble, leaving banks and other creditors with their bad debts. Continue reading
