Pastoral Grazing Enterprise Valuation & Management Articles

 

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Beast Area Valuation (BAV): Misunderstood and Misapplied

This paper is on beast area valuation (BAV) of a pastoral grazing valuation approach and methodology, and as the title implies, will attempt to unravel the mysteries of this industry heuristic (i.e. quick method), or ‘rule-of-thumb’ valuation method, usually and appropriately applied to pastoral zone grazing enterprises, as a walk-in walk-out (WIWO), going-concern business (with ‘all-things-necessary’), to value them for the purpose of investment and divestment.

The attached paper was presented at the Australian Property Institute (API) Property Conference held at the Central Queensland University (CQU) in Rockhampton Q’ld on the 21 August 2015.

 

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Pastoral Property: A Tale of two values – Part 2

 

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Pastoral Property: A Tale of two values – Part 1

 

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Opinion: Why pastoral valuations have been an ‘irrational nonsense’ for 30 years

 

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What is the ‘True’, Going Concern Value of a Pastoral Zone, Grazing Enterprise

by: Michael J. VAIL (CQU – Masters Paper in Property Valuation, 2014)

 

What is the ‘True’, Going Concern Value of a Pastoral Zone, Grazing Enterprise Investment in Australia: and, Why Beast Area Valuation (BAV) is Wrong?

For an Investment in Anything, look to the Risk Factors, and first ask, “What would a Prudent Person do, to Price the Risks?”

 

The paper discusses the following question:

“What Discounted Risk, Leverage, and Inflation Adjusted Value, is a Fair Investment Price, to Pay for a Grazing Enterprise, situated in Pastoral Lands on the Australian Continent; as a Going Concern, Walk-In-Walk-Out, and with All Things Necessary; and why BAV, as currently applied, is wrong?”

 

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Property value lies in the eye of the beholder

 

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What value is a fair market price to pay for rural land?

 

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Rural Land: Rent or Buy; or Both?

In the 1st article, released to “Beef Central” website, www.beefcentral.com.au on 11th January, 2012, your correspondent wrote, asking the question, “Are we valuing rural land correctly?”, and examined from a commentary view-point the income and capital disconnect of an investment in rural land.

In the 2nd article, released to “Beef Central” on the 3rd February, I addressed the topic of “What is a ‘Living Area’, and does the Concept have Currency Today”.  This is viewed from a sustainable business model concept, and the further idea of a rural business making an economic profit, was addressed.

In this 3rd and final piece of the triptych, I will discuss how the current and future generations of land-holders may be able to buy into the farming game, eventually having a seat at the table; and in a sustainable way.

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Rural Land - How big is big enough? What is a living area these days?

Accountant and rural financial advisor Michael Vail looks at the issue of what is a living area these days, and how big is big enough?

In my previous article last month, I asked “Are we valuing rural land correctly?” and examined from a commentary viewpoint the income and capital disconnect of an investment in rural land.
The positive public and industry response to that article, from important stakeholders, was very pleasing.  A big ‘thank you’ to all who engaged in the debate. I hope it changes practise to a more robust model, so investors are protected, and I am still open to any further comment.

In this article I wish to address the topic of “What is a ‘Living Area’, and does the concept have currency today?”
Whether it is as relevant today as when the concept was coined, back when larger runs were being broken-up for Soldier Settlement Scheme blocks, and in more recent times, the ‘Brigalow Scheme’ in Queensland, is a point of conjecture.

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Are we valuing Rural Land correctly?

A commentary on rural land and the income & capital disconnect.

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