Alternative Investments

[Cheesehead]

Hi all. I’ve always been interested in alternative investments. Two different buddies of mine are looking into buying / planting walnut groves with the idea being to sell the walnuts for a number of years and then harvest the timber around retirement (we are all mid-30s). I am curious if anyone on HT has experience with this or similar initiatives, and has any advice to offer. Obviously we / they are looking at this with a risk-adjusted view (assuming spoilage, input costs, disease loss, etc).
Ideas around other off-the radar investments are also welcomed (crypto bros, there’s a thread for that already). Thanks

 

[SAJ-99]

Hi all. I’ve always been interested in alternative investments. Two different buddies of mine are looking into buying / planting walnut groves with the idea being to sell the walnuts for a number of years and then harvest the timber around retirement (we are all mid-30s). I am curious if anyone on HT has experience with this or similar initiatives, and has any advice to offer. Obviously we / they are looking at this with a risk-adjusted view (assuming spoilage, input costs, disease loss, etc).
Ideas around other off-the radar investments are also welcomed (crypto bros, there’s a thread for that already). Thanks

That has to be a tough investment. Probably takes 5+ years for new tress to even produce the first crop? I see retail price on nuts is about $6/lb. My general view is to make a decent return, you probably have borrow most of the cost and hope nothing goes wrong to make the investment work. You might be able to sell carbon credits for that ground that is put into trees. Carbon is probably the most interesting asset I think has upside as the market continues to grow with more participants.

 

[belshawelk]

Depends where you live. Christmas trees are good in NW.

 

[Cheesehead]

Thanks guys for the input. I’ll let it simmer for a minute and then respond with a bit more detail

 

[Pucky Freak]

I helped plant a walnut grove for a farmer in exchange for hunting access. He was about 60 y/o and the grove was for his grandchildren. Half the grove was planted in another tree type, to help the walnut trees thrive. The land selected was hilly and badly eroded d/t more disruptive tilling practices of row crop farmers in generations past. The soil in the bottom of the draw was rich loam with poor drainage whereas the soil on the hilltop and sides were hard clay. The trees could not tolerate the poorly drained soil and they struggled to establish roots and get adequate moisture in the hard clayey soil. Farmer was persistent and he will have his walnut grove after some trial and error, losses, replanting, etc.

Lessons: do your own research on soils, climate, suitability of the land for your crop. Have a forestry or soil expert or two review your plan and visit your property.

I have another acquaintance who makes walnut gunstocks. He is a mechanical genius and makes his own machines and tools. There is a high value in walnut wood products, but the cost of converting a standing tree to a finished product is high. He makes a tidy profit because he owns the entire supply chain: land to grow the trees, sawmill, and shop to make the gunstocks, and outsources and contracts nothing. He supplements his timber supply from others, but can buy a standing tree for very low cost since he is the one cutting it down.

Lesson: If you can do some of the work yourself (planting, felling, milling, drying, transportation, etc.), you increase your likelihood of pulling a profit.

I have another friend who is about 75 and lives alone on a modest fixed income. She supplements her income by harvesting walnuts from her yard and friends’ and families’ yards, and public land. She extracts the meat, and sells it by the gallon. Once the nuts start falling the meat quality is good but after enough time passes the meat dries out and is a lower-grade, and doesn’t fetch as much money. Her operation does not make a lot of $ but she has unlimited time to pour into it + she also sells her sewing and quilting products at the local farmers market.

I don’t know what the market price is for unshelled nuts, but scale and supply chain principles apply here too. If you can gather and transport your nuts there might be a profit margin somewhere. Likewise, if you can do your own shelling, packaging, and selling of the meat you might be able to find a profit margin.

 

[Addicting]

Sounds like a horrible investment. We had a property here for sale that was in a horrible location for a home. They had planted walnuts on it years prior. The trees were big enough for timber but not straight enough too get any logger to take them. So the property was put up for sale advertised heavily as a walnut tree investment and priced very high. It sat for years on the market until the sellers finally lowered the price to match the vacant land market. It sold and the new owners bulldozer cleaned up the trees and they put a little cabin on it. My guess it has a fire place to use up that walnut that is piled up.

Investments dependent in Mother Nature is a bad decision. She can be a wild crazy bitch sometimes. That property was a money pit.

 

[BigHornRam]

Not something that I am interested to invest in, but if you were looking at agriculture/real estate investments, in a foreign country, this would be something worth researching.

Argentina Vineyard, Farms, Land & Real Estate for Sale in Mendoza

Argentina Vineyards, Farms, Land & Real Estate for Sale

www.byronlutz.com

 

[Steiny]

If you're going to tie up ground, buy a farm, cash rent it for crops and get an nice annual payment.
People give walnuts away around here to anybody that is willing to pick them up. Will probably take at least 50-75 years for trees to get to marketable timber size.

I'm not a fan of walnuts, have cut down a bunch of them. They are crummy firewood, the nuts make a big mess, and squirrels are the only critter that uses them.

 

[TOGIE]

sounds like a good plan to hunt less now with no guarantee of hunting more later

 

[VikingsGuy]

Alternative investments outside of one's expertise rarely return at better rates than a balanced market portfolio.

 

[BigHornRam]

Alternative investments outside of one's expertise rarely return at better rates than a balanced market portfolio.

Thread killer!

 

[Gellar]

Trees are planted for the next generation. Meaning they grow very slow and your grandkids will enjoy them more than you.
A buyer is going to look for veneer trees, meaning they are straight with at least 10-14 feet of large diameter trunk. If you plant 100 walnuts you might have 10 that fit that criteria 50 years from now. And that is if walnut is marketable at that time. Also disease, 1000 cankers disease is a pretty serious issue with walnut and is spreading.
Anytime someone is thinking of planting trees it’s wise to plant a variety of native species.
If it were me, I would do improvements on a property like building a pond or stream restoration that you can get cost share on and build value, work with a forester to determine a plan and harvest select trees from the ones that are already there every 5 or 10 years based on the market at the time. Cash rent or put into crp crop ground and sell the land as it gains value to use the profit as down payment to buy larger tracts of land.