fm6e-chapter20

fm6e-chapter20 - Farm Management Chapter 20 Land Control...

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Farm Management Chapter 20 Land - Control and Use
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farm management chapter 20 2 Chapter Outline The Economics of Land Use and Management Controlling Land - Own or Lease? Buying Land Leasing Land Conservation and Environmental Concerns
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farm management chapter 20 3 Chapter Objectives 1. Explore the unique characteristics of land and its use in agriculture 2. Compare the advantages and disadvantages of owning and renting land 3. Explain important factors in land purchase decisions, methods of land valuation, and the legal aspects of a land purchase 4. Compare the characteristics of different leasing arrangements 5. Demonstrate how an equitable share leasing arrangement can be developed 6. Discuss profitable land management systems that conserve resources and sustain the environment
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farm management chapter 20 4 Figure 20-1 Farmland values in the United States (excludes Alaska and Hawaii) Put figure 20-1 here, no title.
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farm management chapter 20 5 The Economics of Land Use and Management Land is a permanent resource that doesn’t depreciate or wear out. Land is immobile and cannot be moved. Because the supply of land is essentially fixed, land prices are very sensitive to changes in demand for its products.
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farm management chapter 20 6 Figure 20-2 Average value of farmland per acre, by region Put figure 20-2 here, no title
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farm management chapter 20 7 Controlling Land - Own or Lease? How much land to control and how to acquire it are two of the most important decisions to be made by any farmer or rancher. Land acquisition should be thought of in terms of control. Control can be achieved by ownership or by leasing. Nearly half of U.S. farmland is leased.
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farm management chapter 20 8 Advantages of Ownership 1. Security of tenure 2. Loan collateral 3. Management independence and freedom 4. Hedge against inflation 5. Pride of ownership
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farm management chapter 20 9 Disadvantages of Ownership 1. Cash flow 2. Lower return on capital 3. Less working capital 4. Size limits
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farm management chapter 20 10 Advantages of Leasing 1. More working capital 2. Additional management 3. More flexible size 4. More flexible financial obligations
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farm management chapter 20 11 Disadvantages of Leasing 1. Uncertainty 2. Poor facilities 3. Slow equity accumulation
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farm management chapter 20 12 Buying Land 1. Soil, topography, and climate 2. Buildings and improvements 3. Size 4. Markets 5. Community 6. Location 7. Competing uses 8. Agricultural program characteristics Value is determined by:
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farm management chapter 20 13 Land Appraisal Income capitalization Market data
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fm6e-chapter20 - Farm Management Chapter 20 Land Control...

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