Saturday, January 19, 2013

I'm buying a new farm

I've been writing about looking at farmland or buying farmland for the past couple of years and that I thought that dairy properties, or former dairy properties, represented a good value right now.   I do believe that, and I'm in the process of purchasing one of those properties.  

I wrote a blog entry a couple of weeks ago where I said that I thought that small dairy properties were undervalued; that they were available at what I considered to be bargain prices, often way less than replacement values.   It represents a huge discount because of the state of the dairy market.   

My offer for this former dairy farm, located about 20 minutes north of my main farm property, was accepted today.  

 It's 69.xx acres of great crop land - level, fertile land - which was mostly planted in corn last year.  It has 54,000 square feet of barn space and a full grade-a milking parlor, as well as a 4 bedroom house, farm office and equipment shed. Plenty of covered parking for everything.  It's located at the end of a dead-end road, and has approximately 1/2 mile river frontage on a great salmon and steelhead river.  Bonus that the state fish hatchery is 1 mile upriver.  
Click on the picture and look for the biggest barn .  lots of space, lots of pasture
 This property was listed for $695k, and was more than I wanted to pay.  After a couple of months on the market, the price was dropped $200,000...  now we're talking.
The farm office is located to the right of the bins.  milking parlor far right
 I made an offer substantially below $495k, in line with what I suggested in that other blog post, and after a bit of back-and-forth, my low offer was accepted.   I was the first person to even look at this property in person, and my offer was the only offer.   I think that this property is a bargain.
Pole barn,  15,000 sf, currently used for hay storage
This property only being 20 minutes from my current operation means that we can move our production here and use the other property for retail sales.  Helps with bio security concerns, and means its easier to manage from sales point of view -- only animals for sale are at the current farm; the breeding animals and animals I don't want to sell would be here.
back yard with orchard and fruit trees

circular driveway big enough for semi trucks

"small" steel framed barn, 12,000 sf
Hobby barn, set up for horses with stalls and paddocks and stuff.  1800sf
I'd be all set if I wanted to own some horses.  
4br 2.5 bath house.
The house is one of the best parts of this property, for me.  I've been commuting to my farm for the last 6 years.  Actually living at the operation will make all of the chores easier.  I am really looking forward to that.
Big steel-framed barn, 25,000 sf.   Sean posing for perspective
One of the nice things about this gigantic barn is that it makes all sorts of things possible.  this barn alone is more than a half-acre under roof.  That is a lot of space.   There's also a 3 million gallon manure lagoon, which in this regulatory environment would be very difficult to permit new.    This single barn had a construction cost in 2007 of $325,000.00.  There's more than a thousand yards of concrete in this barn.

My offer having been accepted, I'm having the property surveyed, house inspected,  the water well tested and doing other due-diligence.   I'm hoping that we can close this deal by sometime in march, but that depends on some  things out of my control - appraisals and lenders criteria, as well as looking at the survey for encroachments and the inspection and the report on the well.   At this point I'm not anticipating any issues, but there's always a chance.


Mountain Walker said...

Oh. My. Goodness! What a great find! I am soooo jealous!!!!!

N2WAVE said...

congrats! Nice place...

Hostetter said...

All I can say is good luck. You deserve it and I'm sure you will make a good and profitable use of it. I look forward to learning from your experience. I have looked and looked but here in the south there just isn't anything like that available. Forget the property just the infrastructure makes it all worth it. My dry humor aside, 3 million gallons of manure. That gets me the most excited, people see a problem, issues, but I see a resource and would enjoy making use of it.

all the best on the inspections..

Bruce King said...

Thank you folks. I've been looking at properties in a low-key way for a couple of years, and more intensively in the last 6 months. This particular property with more than an acre under roof was pretty much my favorite. The biggest barn is only 5 years old. And you will NEVER hear a farmer complain that their barn is too big!

In the midwest, 70 acres would basically be your backyard... big farms are measured in thousands of acres, but around here, 70 acres is a pretty decent size, and for what I'm doing, more than big enough.

Prior to the foreclosure this property was milking 300 cows, with another 100 or so dry cows and replacement heifers, so the manure handling is way bigger than what I'll need, but I like the idea of a permitted-and-approved cold-season manure solution.

I'm just lucky that people didn't figure out that the big barn would make an awesome indoor riding arena... 250'x100', with a 35' ceiling. I fully expected to find it sold to some horse person as an equestrian estate or something.

Throwback at Trapper Creek said...

Nice! Congrats from here as well.

SmithGang said...

O Congrats:)

BigGAdawg said...

Congratulations on such a good deal. Lots of potential with that property.

Joanne said...

That's awesome! Congrats! Keeping my fingers crossed for you. It'll be especially nice for you to live on the farm. Commuting sucks.

Throwback at Trapper Creek said...

I saw these cows in the Capital is the CL ad. I think they are pretty close to you.

Anonymous said...

Congrats Bruce! Very exciting! I look forward to reading more about your transition.

Unknown said...

That definitely is a great find! If the sale does push through (and I’m hoping that it would), not only is it a bargain, but it’s also very advantageous for your existing operation. There are a lot of features on the property that can help expand your operation and generate more income as well. Best of luck with the deal, and I hope to read on your transition when the time comes.

Gertrude Poulsen