The Amazing Return on Investment (ROI) from Walnuts
Many like to think of investing as a game. You carefully hedge your bets and cross fingers hoping that the best comes out of it. That may be true for certain kinds of investments. However, seasoned successful investing can be likened to a form of art. It is something that requires precision, skill and being definitive.
As such, the investment choices one makes are to a large extent a factor in the success of their business. Products that show a track record of consistent returns, and not necessarily promise of quick ridiculous returns, are the way to go. Hence the focus of this article being one such product: The walnut crop.
First, let’s learn a little about the crop itself. The walnut crop is a tree grown for its tasty nuts which are highly sought after. The nuts form part of traditional cuisines in some parts of the world but have really caught on with the increasing popularity of organic foods in recent decades. In fact, it is one of the healthiest foods around.
In addition to nut, walnut timber is prime hardwood. Its price per board foot is about $ 11 in the USA. This is better than some great hardwoods like the Maple tree. Black walnut timber in particular is the go-to grain for high end furniture designers. Indeed, investing in Walnuts is killing two birds with one stone!
Just to be clear, walnuts are not a fairytale get-rich product. It takes upwards of 10 years for trees to produce nuts of commercial viability and about 15 for the logs to be mature for timber harvesting. This calls for effective planning and patience. That said, the returns in the end are well worth it.
How much does it cost to establish and maintain an orchard?
To come up with our average ROI, let’s look at some of the cost that is incurred in the development process. These are variable depending on location but should not be far on either side. This model is made with the assumption that an investor has already acquired land. If the converse is true, it does not make much of a difference long term. They are;
- Cost of acquiring quality seedlings for propagation.
- The labor cost incurred during planting, thinning, mowing and pruning along the way.
Based on a study on farm in San Joaquin Valley in California, the establishing cost for an acre of walnut orchard is about $ 7,000. Over the next seven years when the seedlings continue transition to young trees, the net operating cost averages out at around $ 1,200 annually.
These are figures gathered by expert extension officers with decades of field experience. As it can be noted, the cost after the first year of planting is relatively small especially in a large scale project.
By the end of the seventh year, the accumulated cost per acre should be about $ 13,000. However, these are figures are all inclusive and on the higher end. In developing countries such as Turkey with abundant cheap labor and lower property rates, the cost can be much lower.
The walnut tree takes some years to come in production but once it begins yielding nuts, an acre can produce up to 6,000 pounds of nuts a year.
The prices of nut range from country to country but demand is constant. The trees alone are bonafide cash cows. An acre of black walnut orchard alone at full maturity is worth north of $ 100,000 USD per acre for its timber value alone.
This alone is proof of how underrated a product walnuts are. Using the timber value alone, the return of investment say on 20th year would be about 150%. When the profits from nuts are factored in, this figure rises exponentially.
For a large parcel of land, the return is even better. An investment of about $ 50, 000 USD on a tract over ten acres will leave you a millionaire in 20 years. This is guaranteed long term return and a strategic investor should capitalize on its promise.
It goes without saying that the walnut tree is a remarkable investment. The promise of long term consistent high return coupled with low maintenance cost and reliability of market is a match truly made in heaven. At invest for land we guarantee a return of 24.7% net-income for the first 10 years. This is why walnuts have been billed as a high promise retirement plan. It should be a natural choice for a prudent investor.