Day 63 – How to make money from farming

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This is going to be a short post, as once again a South American quantity of overnight rain meant that we could not get out into the field. Okara is a company which specialises in using data, both Big and small, to inform land buying decisions for its investors. The idea is to find farmland that is under-valued, or under-utilised, and snap it up for a cheap price.

White is poorly drained, unproductive land. It will only be used for cattle grazing. Blue is marginal crop land, orange is average, and red is good

White is poorly drained, unproductive land. It will only be used for cattle grazing. Blue is marginal crop land, orange is average, and red is good

The first step is to use aerial photos, satellite data, weather recording etc etc to zone the potential land into discrete areas which they think should be similar soil types. This then allows them to go and take soil samples out of these representative zones. This should give a good idea as to the land’s potential, without having to sample everywhere, which would be prohibitively expensive.

In the example picture above, the entire farm (6,000ha or so) was being used for extensive cattle grazing, and was valued accordingly: $4,000/ha. Having performed an analysis, and come up with this map, they found that over half of that ground was actually good or very good for cropping, so their investor bought it.

And the value of cropping land in that area…$7,000/ha

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