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Between 2008 and 2022, land prices nearly doubled throughout the world and tripled in Central-Eastern Europe. In the UK, an influx of investment from pension funds and private wealth contributed to a doubling of farmland prices from 2010-2015. Land prices in the US agricultural heartlands of Iowa quadrupled between 2002 and 2020.

Agricultural investment funds rose ten-fold between 2005 and 2018 and now regularly include farmland as a stand-alone asset class, with US investors having doubled their stakes in farmland since 2020.

Meanwhile, agricultural commodity traders are speculating on farmland through their own private equity subsidiaries, while new financial derivatives are allowing speculators to accrue land parcels and lease them back to struggling farmers, driving steep and sustained land price inflation.

Top-down ‘green grabs’ now account for 20% of large-scale land deals. Government pledges for land-based carbon removals alone add up to almost 1.2 billion hectares, equivalent to total global cropland. Carbon offset markets are expected to quadruple in the next seven years.

These are some of the findings published in the new report ‘Land Squeeze’ by the International Panel of Experts on Sustainable Food Systems (IPES), a non-profit thinktank headquartered in Brussels.

The report says that agricultural land is increasingly being turned into a financial asset at the expense of small- and medium-scale farming. The COVID-19 event and the conflict in Ukraine helped promote the ‘feed the world’ panic narrative, prompting agribusiness and investors to secure land for export commodity production and urging governments to deregulate land markets and adopt pro-investor policies.

However, despite sky-rocketing food prices, there was, according to the IPES in 2022, sufficient food and no risk of global food supply shortages. Despite the self-serving narrative pushed by big agribusiness and land investors, there has been no food shortage…

…click on the above link to read the rest of the article…

The Biden administration will pay farmers more money not to farm

April 5, 2022

The Biden administration will pay farmers more money not to farm

Large black land farm in Eastern Arkansas with plowed field laying fallow. Seed and grain silos in background with sheds and farm equipment.

iStock/Warren_Price

The goal is to add 4 million acres of farmland to the Conservation Reserve Program, which takes land out of production to blunt agriculture’s environmental impact.

The Biden administration announced on Wednesday that it would expand a program that pays farmers to leave land fallow, part of a broader, government-wide effort to cut greenhouse gas emissions in half by 2030. The new initiative will incentivize farmers to take land out of production by raising rental rates and incentive payments.

The Conservation Reserve Program (CRP) was created in 1985 to incentivize landowners to leave some of their marginal land unplanted, a plan meant to protect the environment by reducing agricultural runoff into streams and rivers, preserving wildlife habitats, and preventing erosion. Today, the Department of Agriculture (USDA) “rents” about 21 million acres of farmland from landowners, typically for 10 years at a time—a tiny fraction of the total land farmed nationwide. In recent years, the number of acres enrolled in CRP has fallen, possibly because USDA’s rental payments have not been competitive with the open market, Chuck Abbott reported for FERN News.

The new announcement is a bid to incentivize farmers to enroll 4 million more acres of land in the program to total 25 million acres, the current program limit. “Sometimes the best solutions are right in front of you,” said Agriculture Secretary Tom Vilsack in a press release.

“A huge amount of money was essentially paid and then lost when those acres go back into farming.”

All told, the increased rental rates and expanded incentive payments—which pay farmers extra for growing buffer strips and promoting wildlife habitats—will increase CRP spending by about 18 percent, totaling $300 million or more in annual spending.

…click on the above link to read the rest of the article…

Want To Invest In Farmland? Here’s How

March 29, 2021

Want To Invest In Farmland? Here’s How

There are now more options than ever (without having farm the land yourself!)

Farmland is a “holy grail” asset class for many investors.

It’s tangible, produces income, and has inherent underlying value — making it a great inflation hedge.

It’s supply constrained. Mother Nature isn’t making any more of it –and in total, farm acreage around the world is being lost to development, drought, etc.

Historically it’s an asset class that produces double-digit annual returns while remaining largely uncorrelated with the stock market, making it a valuable component for portfolio diversification.

And even better, it offers the chance to do well by doing good. There are increasing opportunities to convert poorly-managed conventional farmland to organic status through sustainable practices AND command much higher profits in the process. Smart farmers are now able to create superior business while healing the soil at the same time.

So, how can you get access to this attractive asset class?

Farmland investor Craig Wichner, Managing Director of Farmland LP, explains how in this week’s Market Update. He also details out the growing number of ways regular investors like you can purchase farmland and benefit from its many attributes without having to actually become a farmer yourself.

Which is why Craig agrees that now, more than ever, is the time to partner with a financial advisor who understands the nature of the market risks in play as well as the opportunities that farmland offers in a diversified portfolio to defend against them, can craft an appropriate portfolio strategy for you given your needs, and apply sound risk management protection where appropriate:

farmland, peak prosperity, investment, adam taggart, risk

Saving Farmland, Supporting Young Farmers

January 5, 2021

Saving Farmland, Supporting Young Farmers

It’s a bit odd that land reform is barely mentioned in most progressive agendas. Maybe that’s because it is seen as challenging the presumed virtues of private property and capitalist markets. Yet secure access and tenure to land is essential for achieving so many progressive goals, from building new sorts of regional food systems to providing affordable housing and enabling local self-determination and personal well-being.

Severine von Tscharner Fleming put it well in the latest episode (#10) of my podcast Frontiers of Commoning: “At the root of peace is sufficiency and wholeness, and that means people having their needs met, people being fed. And that sufficiency and wholeness can be achieved only through a certain level of sovereignty over land and self-determination that is rooted in land.”

Severine is a young organic farmer, activist and organizer based in Maine who has had a remarkably productive career as an advocate for young farmers and land reform. She helped start Agrarian Trust, an organization dedicated to supporting land access for the next generation of farmers. In recent years, Agrarian Trust has started ten Agrarian Commons in the US, in an attempt to make community-supported, collectively stewarded farmland available to younger farmers. As the project notes: “With 400 million acres of land in the U.S. expected to change hands over the next two decades, the time for transformation in land ownership is now.”

Agrarian Trust is just one of many new ventures that Severine has helped set in motion. She also played a key role in starting Greenhorns, a grassroots cultural organization that produces a literary journal, radio show, blog, and other media for young farmers. She helped launch Farm Hack, a project that designs and builds farm equipment using open source principles.

…click on the above link to read the rest of the article…

Farms for the Future: 20 Organizations Protecting Farmland

August 2, 2020

Farms for the Future: 20 Organizations Protecting Farmland

In the United States, over 2,000 acres of agricultural land are sold every day for housing or commercial development, according to the American Farmland Trust. This has especially affected Black farmers who, since 1920, have seen nearly a 90 percent decline in land ownership, according to the U.S. Census.

Over the past decade, as many as 200 million hectares of land have undergone large-scale transactions internationally, according to a study by Oregon State University. These transactions, taking the form of land grabs or corporate consolidation of agriculture, often deteriorate the economic livelihood and food security of small farmers and communities reliant on these lands for sustenance, as reported by the Oakland Institute. When communities control their own farmland, residents can invest in sustainable and affordable agriculture, which helps to alleviate hunger and malnutrition, according to the World Bank.

Many organizations around the world are fighting to help communities regain control of their land and livelihoods. Food Tank is highlighting 19 organizations combating land grabs and protecting land for farmers.

1. Alaska Farmland Trust (United States)

One in five Alaskans is considered food insecure, and over 95 percent of the food consumed by Alaskans is imported from the contiguous U.S., according to the Alaska Farmland Trust Corporation (AFTC). AFTC was created in 2005 to support the existing farms in Alaska’s Mat-Su valley and safeguard farmland against development. AFTC aims to protect 5,700 acres of farmland in the next 50 years to ensure productive farms, ranches, and forests for generations of Alaskan farmers to come.

2. American Farmland Trust (United States)

…click on the above link to read the rest of the article…

The Future Of Better FarmingSustainable practices + smart technology = thriving soils

August 6, 2019

The Future Of Better FarmingSustainable practices + smart technology = thriving soils

While it’s *soooo* tempting to write about the stomach-churning drop/spike/dive thrill ride the financial markets have embarked on after this week’s Federal Reserve rate cut, I will resist and instead direct your attention to a topic much more important to our future.

Here at PeakProsperity.com, we’ve long warned about the dangers of inflation and of devaluation of the purchasing power of fiat currency over time. And the past decade has done nothing but validate our concerns, as the world’s central banks nearly quadrupled the money supply by printing roughly $14 Trillion out of thin air since 2008.

We’ve long encouraged investors both big and small to invest in tangible wealth (aka “hard assets”). These are assets that have intrinsic value that can’t be inflated away to nothing by a runaway printing press.

One of most desirable forms of tangible wealth is productive farmland. No matter what happens to the dollar, the Euro, the yen, or the yuan, people will always need to eat; and will trade cash, goods, services or labor for the farmer’s output.

But farmland, especially quality farmland, isn’t easy to own.

Not many folks can realistically purchase a farm. Few have the (substantial) capital to buy one, and way fewer have the expertise, energy and temperament to manage and operate one.

There aren’t many other options for investors besides purchasing shares of the publicly traded mega-producers.

But for those deeply troubled by the extractive and rapacious nature of most modern conventional farming practices — which are ruining our priceless topsoils, depleting aquifers, killing off the insects, creating toxic algal blooms and dead zones in our rivers and oceans, and producing unhealthy foods, to boot — how can you avoid supporting the evils of Big Ag?

…click on the above link to read the rest of the article…

California Turns To Farming Photons As Water Woes Result In Central Valley Solar Fields

August 3, 2019

California Turns To Farming Photons As Water Woes Result In Central Valley Solar Fields

California’s Central Valley is going green(er). Thanks to constrained water supplies and the Sustainable Groundwater Management Act (SGMA) which requires over 500,000 acres be taken out of production, some of the Golden State’s more than 77,000 farms are embarking on ambitious solar projects, according to the LA Times.

*The Maricopa West solar project. (Al Seib / Los Angeles Times)*

Converting farmland to solar farms also could be critical to meeting California’s climate change targets. That’s according to a new report from the Nature Conservancy, an environmental nonprofit.

Working with the consulting firm Energy and Environmental Economics, the conservancy tried to figure out how California could satisfy its appetite for clean energy without destroying ecologically sensitive lands across the American West. The report lays out possible answers to one of the big questions facing renewable energy: Which areas should be dedicated to solar panels and wind turbines, and which areas should be protected for the sake of wildlife, outdoor recreation, farming and grazing?

One takeaway from the report, released this week: California will need hundreds or maybe thousands of square miles of solar power production in the coming decades — and it would make sense to build one-third to one-half of that solar capacity on agricultural lands, mostly within the state. –LA Times

*The 160-acre Maricopa West project, pictured, would be dwarfed by Westlands Solar Park, planned for the Central Valley, which could extend across 20,000 acres. (Al Seib / Los Angeles Times)*

By utilizing land which has already been ‘ecologically degraded’ (saving the state’s desert critters from solar annihilation), California can convert a ton of land to solar panels without harming the state’s $50 billion annual agriculture industry. According to a prior study by UC Berkeley, the state has at least 470,000 acres of “least-conflict” lands in the San Juaqin Valley (the lower portion of the Central Valley) where “salty soil, poor drainage or otherwise less-than-ideal farming conditions could make solar an attractive alternative for landowners,” according to the Times.

…click on the above link to read the rest of the article…

Vanishing open spaces: population growth and sprawl in America

May 28, 2019

Vanishing open spaces: population growth and sprawl in America

Before the fossil fuel age began, about 80 to 90% of people farmed to make a living. Since the end of the oil age will send us back to the past, farmland and farmers will once again comprise the greatest numbers of people. So it’s alarming that on the cusp of peak global production of oil, we’re losing farmland at such a fast clip to development. We need all the land we can get – in the Great Depression people were hungry, back when there was just a quarter of the population we have now, with 25% of people still farmers, unlike the 2% today.

Cities were originally built where the best farmland and water existed. As cities and towns grow, they sprawl outwards over this prime farmland – in fact, that’s where 85% of developmental sprawl happens. The United Nations calls this soil sealing – the permanent covering of soil with impermeable materials such as asphalt or structures. This leads to a total soil loss of food and fiber production, for water to infiltrate and be held and purified, and often increases flooding , the ability of the soil to hold water, loss of purification capacities, loss of carbon sequestration, increased urban heat from the loss of vegetation, and less biodiversity (FAO 2015).

Between 1945 and 1975, enough farms disappeared beneath concrete to pave Nebraska (Montgomery 2007), about 49.5 million acres (77,350 square miles).

Between 1982 and 2010 the U.S. lost 41.4 million acres, 14% of its crop land. That’s equal to 65,000 square miles, an area as large as Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, Delaware, New York, and Pennsylvania

Over a third of all land that has ever been developed occurred in the last 25 years. If we keep paving over cropland at this rate, it will all be gone in 200 years.

…click on the above link to read the rest of the article…

The Company Store

May 4, 2019

The Company Store

Leaves almost nothing to live on

In the song Sixteen Tons by Merle Travis (and made famous by Tennessee Ernie Ford), the idea of the ‘company store’ referred to a system of debt bondage that effectively trapped workers within an unfair system designed to harvest all of their labor at very low cost.

You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store
Sixteen Tons – Merle Travis

How exactly did the company store system operate?

Under a scrip system, workers were not paid cash; rather they were paid with non-transferable credit vouchers that could be exchanged only for goods sold at the company store. This made it impossible for workers to store up cash savings.
Workers also usually lived in company-owned dormitories or houses, the rent for which was automatically deducted from their pay.
(Source – Wiki)

This model was simple enough to understand. “Pay” your workers with scrip vouchers, then sell them your marked up goods at the company store, pocketing a nice profit. On top of that, force your employees to live in company housing, too, also at terms very favorable to the company.

Add it all up and the workers found themselves in perpetual service to their employer. No matter how hard and long they toiled, there was nothing left for their own private benefit after all was said and done. The company succeeded in skimming off any and all ‘excess’ for itself.

This vast unfairness eventually led to the formation of unions as well as to regulations providing protection to the workers.

…click on the above link to read the rest of the article…

Saving Farmland for Future Generations

November 8, 2017

Saving Farmland for Future Generations

Image courtesy of Beccy Strong

Imagine a farm where you are welcome to walk in its fields. You hear birds singing and see wildflowers blooming. The cows in the meadows are grazing and the children in farm school are learning-by-doing, collecting eggs from free-ranging chickens and picking fruit from orchard trees.

Welcome to community-owned Huxhams Cross Farm set on the rolling hills of south Devon on the edge of the Dartington Hall estate. Secured by the Biodynamic Land Trust (of which more later), its 34-acres exemplifies human-scale farming in a world increasingly dominated by industrial farming.

Huxhams Cross Farm needs your investment and here’s why. In the UK and Europe, small farms are increasingly swallowed up by neighbouring industrial farms – 3% of farms own 52% of EU land.

The UK currently imports over half the food it consumes with about a quarter coming from the EU. As for fresh produce, the UK imports 80% of its fresh vegetables and 40% of fresh fruit. The need for the UK to produce its own food is ever-more pressing post-Brexit. Coupled with a falling pound and potential tariffs, there could be significant price rises according to a joint food report from Universities of City, Cardiff and Sussex.

Food growing is made harder in the UK due to land prices. It takes a farmer up to 20 years to pay back one hectare of land in the UK (compared for instance with nine years in the Netherlands and six in France). Because UK land is used as a financial safe haven, its prices have become inflated, putting farmland beyond the reach of farmers growing food. The Biodynamic Land Trust is working to de-commodify the land and return it to community ownership. Since being founded in 2011, the Biodynamic Land Trust has secured over 300 acres of land for five farms including Huxhams Cross Farm in Devon.

…click on the above link to read the rest of the article…

California Farmland To Plunge “20% Or More” As Returns Sink To Lowest Level Since 1992

April 26, 2017

California Farmland To Plunge “20% Or More” As Returns Sink To Lowest Level Since 1992

Last August we questioned whether California farmland was overvalued by $70 billion (see our aptly named post: “Is California Farmland Overvalued By $70 Billion?“). Our reasoning was fairly simple, as we argued such a draconian outcome was the inevitable result of large institutional buyers scooping up 1,000s of acres of Cali farmland and massively overplanting almonds because, at least at the time, it was the hottest crop earning the highest returns…and that’s what NYC hot money likes.

Unfortunately, chasing short-term returns by massively overplanting a permanent crop with a 25 year useful life and creating a huge supply bubble in the process rarely works out all that well. Here’s what we said 9 months ago:

But the Midwest is not the only place where farmland has bubbled over. California farmland has been bubbling up for years now with unplanted farm ground with “decent” access to water currently selling for $20,000 – $30,000 per acre. Land with mature almonds, California’s cash crop, is more likely to trade at $30,000 – $40,000 per acre. This bubble, like so many others, has been caused in large part by institutional capital “reaching for yield” in a low interest rate environment…yet another Fed bubble lurking under the surface.

The plan was relatively simple, in the absence of attractive fixed income yields, large asset managers (like TIAAmentioned above with $850BN of AUM) decided to purchase hard assets like farmland instead. Farmland could then be planted with the highest value crop, which just happens to be almonds in California, to drive attractive ROICs on invested capital. A few simple charts illustrate perfectly how the story played out.

And, right on cue, almond prices crashed leaving land owners with a ~4% ROIC, down from 16%, on land they likely purchased for north of $35,000 per acre.

…click on the above link to read the rest of the article…

Farmland prices up 10% last year as property boom spreads to agriculture

April 11, 2016

Farmland prices up 10% last year as property boom spreads to agriculture

All provinces saw increases, but not as much as in previous years

The price of farmland increased by more than 10 per cent, on average, last year.

The price of farmland increased by more than 10 per cent, on average, last year. (Parwiz/Reuters)

A report released Monday by Farm Credit Canada says last year’s gains are part of a continuous upward trend that started in 1993.

The gains, however, are lower than in recent years, and pale in comparison to the 22 per cent increase seen in 2013, and the 14 per cent seen in 2014.

Regional variation

The agricultural finance group says prices aren’t going up evenly across the country. Despite the higher average nationally and in every province, many more regions across the country saw price declines in 2015 than saw them in 2014.

“There appears to be greater volatility with a higher number of locales where values decreased,” FCC said in a release, advising farmers to prepare for a potential softening of the market as lower crop prices have an impact.

Across the country last year, farmland increased on average by:

12.4 per cent in Manitoba.
11.6 per cent in Alberta.
9.6 per cent in Quebec.
9.4 per cent in Saskatchewan.
8.5 per cent in Prince Edward Island.
7.7 per cent in Newfoundland and Labrador.
6.6 per cent in Ontario.
6.5 per cent in British Columbia.
6.3 per cent in Nova Scotia.
2.6 per cent in New Brunswick.

J.P. Gervais, the group’s chief agricultural economist, says farmers didn’t feel the full effects of lower commodity prices last year because of the significant drop in the Canadian dollar.

But looking ahead, Gervais says 2016 could see more modest farmland value gains of two to four per cent as farmer incomes — known as crop receipts — start to be affected.

“The best-case scenario would be for the average value of farmland to reach a point of long-term stability, where any future increases or decreases are modest and incremental,” Gervais said.

Saudi Arabia is Buying Up American Farmland to Export Agricultural Products Back Home

January 17, 2016

Saudi Arabia is Buying Up American Farmland to Export Agricultural Products Back Home

Just what we need, cornfield crucifixions.

Seriously though, this is very troubling. The Saudis are explicitly conserving their own resources at home, while exploiting land and water supplies here in America.

CNBC reports:

Saudi Arabia and other Persian Gulf countries are scooping up farmland in drought-afflicted regions of the U.S. Southwest, and that has some people in California and Arizona seeing red.

Saudi Arabia grows alfalfa hay in both states for shipment back to its domestic dairy herds. In another real-life example of the world’s interconnected economy, the Saudis increasingly look to produce animal feed overseas in order to save water in their own territory, most of which is desert.

Privately held Fondomonte California on Sunday announced that it bought 1,790 acres of farmland in Blythe, California — an agricultural town along the Colorado River — for nearly $32 million. Two years ago, Fondomont’s parent company, Saudi food giant Almarai, purchased another 10,000 acres of farmland about 50 miles away in Vicksburg, Arizona, for around $48 million.

But not everyone likes the trend. The alfalfa exports are tantamount to “exporting water,” because in Saudi Arabia, “they have decided that it’s better to bring feed in rather than to empty their water reserves,”said Keith Murfield, CEO of United Dairymen of Arizona, a Tempe-based dairy cooperative whose members also buy alfalfa. “This will continue unless there’s regulations put on it.”

Recall, this is precisely the type of investment Michael Burry of “Big Short” fame recently said he was involved in.

In a statement announcing the California farmland purchase, the Saudi company said the deal “forms part of Almarai’s continuous efforts to improve and secure its supply of the highest quality alfalfa hay from outside the (Kingdom of Saudi Arabia) to support its dairy business. It is also in line with the Saudi government direction toward conserving local resources.”

Sure, conserve local, exploit American. Just brilliant.

…click on the above link to read the rest of the article…

Warnings Australia in rural financial crisis as farmers look to take on ANZ – ABC News (Australian Broadcasting Corporation)

December 29, 2014

Warnings Australia in rural financial crisis as farmers look to take on ANZ – ABC News (Australian Broadcasting Corporation).

There is growing concern Australia is in the grip of a rural financial crisis as banks foreclose on hundreds of properties and force farmers off the land but some are vowing to fight back.

Rural lender Landmark – once owned by the Australian Wheat Board – held the long-term mortgages of hundreds of Australian farmers but at the height of the global financial crisis sold its loan book to big four bank ANZ.

Up until a recent decision to halt foreclosures for 12 months, ANZ was foreclosing on drought-stricken farmers that missed repayments.

With slumped property prices, some rural families also faced a situation where their debt was higher than the value of their farms.

Like hundreds of other farmers, Rodney Culleton did not choose to be an ANZ customer but faced the bank’s new loan agreements and demands for fresh guarantees after Landmark offloaded his loan.

…click on the above link to read the rest of the article…

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