The Land Investment Monthly is a round-up of articles and headlines published by the farm press, business media and financial publications with insights into buying, selling or investing in farmland, recreational ground or development ground. Follow Steve Bruere @SBruere on Twitter and find Peoples Company on Facebook for the latest land listings, auction results, upcoming events and real estate news. Subscribe to my monthly updates or request access to a hard copy of my Land Investor newsletter by sending an email to Steve@PeoplesCompany.com and including “Land Investment Monthly” in the subject line.
The Iowa Chapter of REALTORS® Land Institute has announced the results of the 2014 Land Trends and Values Survey, in which farmland specialists and others are asked to share opinions regarding the current status Iowa farmland market. Cropland values decreased by a statewide average of 3.4 percent for the March 2014 to September 2014 period, and according to the surveys the statewide average is down 8.8 percent on a year-over-year basis from September 2013. Estimates are for bare, unimproved land with a sale price on a cash basis.
The www.LandInvestmentExpo.com website has been updated with a new theme and fresh content that is reflective of the upcoming Eighth Annual event to be presented by Peoples Company in West Des Moines. The Expo, scheduled for January 23, will feature keynote speaker Dennis Gartman of The Gartmann Letter, as well as the return of both Simon Atkins, a climate Economist and Commodity Yield Expert, and reappearance of Susan Payne, an executive with Emvest Agricultural Corp. in Africa. Eric O’Keefe, editor of The Land Report, will also share a keynote presentation in 2015. Registration is open. Save the date and explore the new website today.
There is a ton of money out there, land is an inflation hedge, balance sheets are strong, and things are different than the 1980s. These are some of the points that are made when the topic of land values are discussed today. With the prospect of selling corn for less than $3/bushel out of the field this fall, the coffee shop conversations have turned from record high land sales or staggering cash rents to the discussion of no sales at farm auctions and what will the reduction in land rents be. The big question is how far will the liquidity in agriculture go, and what will the appetite of investors be moving forward?
A new program established by the Community Foundation of Greater Des Moines, allowing land donors to continue to receive rent income or crop proceeds during their lifetimes, also ensures that the land continues to be farmed and at the same time gives donors an opportunity to maintain a voice in how the land is managed – and by whom –both while they’re alive and after they’re gone. The Des Moines Register reports that farmers participating in the Keep Iowa Growing program can receive tax breaks and state tax credits of up to 25 percent of the value of the gift.
Veteran ag reporter Ken Root is teaming up with analyst Maurice Clark to tour farming operations in South Africa, Zambia and Mozambique. The fall trip is being underwritten by Peoples Company, and is intended to explore farming practices and potential for investment opportunities in these arable African regions. Root and Clark, who are knowledgeable in farming techniques, mechanization, and assessment of investment risk, will visit farms owned by Susan Payne, Executive Chairman and CEO of EmVest Asset Management. Root plans to deliver a report of the trip on Agribusiness Radio Network and Agribusiness Report on WHO-TV, during and immediately following his trip. Initial observations will be posted on the Land Investment Expo website, as well as Peoples Company’s blog and social media properties (Facebook, Twitter, YouTube, LinkedIn). Payne, who will return in January to Iowa to speak for a third time at the Land Investment Expo, will share an illustrated overview of the trip with presentation slides that include photos or video of what is captured October 6-13.
With a focus on supply and demand in the face of exploding worldwide populations to feed, The Sovereign Investment Daily reports on the importance of not over-complicating one’s approach or failing to set up “substantial future gains” by not considering how dwindling acres of earth’s crop-producing land relates to a portfolio. Since the 1940s, the U.S. has seen nearly 20 percent of its farmland go by the wayside. In lieu of getting too caught up on the latest SEC fillings or price-to-earnings, the editors suggest doing the simple math as the price-per-acre on farmland is set to eventually “go a whole lot higher.”
Julie Koeninger in her “Farmland Investment Primer” white paper published in July by GMO LLC, covers the characteristics of and potential risks associated with farmland investing. Uncorrelated with financial asset returns, Koeninger writes, farmland offers “genuine portfolio diversification for institutional investors” and is an asset class that has not only strong investment fundamentals, but also boasts potential for “attractive cash yields. Land management, investment vehicles, and the fundamentals of supply and demand are each covered in this comprehensive summary with notes on a cross-regional approach and “targeted farmland investment in certain regions.”